About Us  |  About Cheetah®  |  Contact Us

Define Prohibited Activities in Nonsolicitation Agreement to Avoid Social Media Snafu

March 7th, 2013  |  Sheryl Allenson

Think your former employee has violated a nonsolicitation agreement by posting post-employment information on Facebook? Think again, and look carefully to the terms of your agreement, because that conduct may well be permissible. One federal court in Oklahoma recently adopted the recommendation and report of a magistrate and refused to grant the employer’s motion for a temporary restraining order, finding that a former employee’s Facebook post touting his professional satisfaction with his new employer’s product did not violate a nonsolicitation agreement (Pre-Paid Legal Services, Inc, v Cahill, February 12, 2013, Payne, J). General invites for former coworkers to join Twitter also fell outside the scope of the nonsolicitation agreement.

The employee started as a sales associate for the legal services company, which operates under a network marketing sales model. Sales associates are independent contractors who sell memberships and recruit new sales associates, known as the associates “downline.” In this instance, the employee quickly moved up the ranks, establishing a downline of more than 25,000. He was promoted twice, first to a regional manager and later to the regional vice president of Illinois.

Agreements signed. Sales associates are required to sign an associate agreement, which states, among other things, that downline information is confidential, proprietary information. Under the agreement, associates cannot solicit or recruit others into another organization. In addition to the associate agreement, the employee signed a regional manager agreement. That agreement identified certain information as trade secrets and confidential information, and included a nonsolicitation clause.

Employee leaves. At one point, the employee decided to move to another network marketing company. After he resigned, the employee took to social media,  posting general information about his new employer on certain private pages he created for the employer. Though he ceased that activity, he has been actively posting information relating to his new employer on his personal Facebook page. Moreover, his Twitter account generated invitations to associates to join the social networking site.

Facebook posts. The employee’s ongoing posts to his personal Facebook page related to his new employer did not constitute solicitation under the terms of the nonsolicitation agreement. Noting that this was a “rather novel issue,” the magistrate turned to several other cases for support. Analogizing to a case regarding LinkedIn, the court found the employee’s conduct in this instance was “less explicitly inviting professional interest in [his new employer]” than in posting a job opportunity, which could have been but was not found violative of a nonsolicitation clause. In further support of its position, the magistrate turned to a case from a Massachusetts state court, denying an employer’s motion for a preliminary injunction in a case regarding solicitation through Facebook. In that case, the employee’s new employer posted an announcement about the employee’s new position and the employee had become Facebook friends with several of the plaintiff’s clients.

In deciding to deny the employer’s motion with respect to the Facebook posts, the magistrate reasoned that there was no evidence that the employee intended to or had solicited anyone other than the single colleague to leave. Therefore, the employer could not show that it was likely to succeed on the merits of its breach of contract claim regarding the Facebook posts or that it would suffer irreparable harm if the employee was not enjoined from posting to his Facebook page. Specifically, there was no evidence that the Facebook posts resulted in any flight from the employer to the employee’s new establishment, or that he was private-messaging associates or posting on their personal pages. If the employer wanted to avoid the possibility of similar conduct, its nonsolicitation agreement should provide a clearly defined definition of the activity they wish to prohibit.

Twitter invites. Though the employer’s motion did not hinge on it, the court addressed its argument that the employee engaged in solicitation in violation of the nonsolicitation agreement by sending out Twitter invitations to the employer’s sales associates. This argument fell short on several levels. First, there was no evidence that the individuals were targeted to “follow” the employee on Twitter, or that his Twitter feed contained any information about either his former or new employer. Moreover, contrary to the employer’s assertion that the employee may have sent out an email blast, there was evidence that the invitations were self-generated by the social media site on behalf of the employee. Finally, the invitations were sent to, among others, the CEO and general counsel of the company. The magistrate noted that if the employee targeted the invites himself, this was “implausible.”

Consider the conduct. Companies considering the ramifications of social media on their nonsolicitation agreements should carefully consider what conduct they expect may violate that agreement and clearly specify the activity they wish to prohibit. In the absence of a clearly defined agreement, general postings on an employee’s own Facebook page may not be actionable under a nonsolicitation agreement.