April 30, 2018

Restrictive Covenants and Social Media

Restrictive covenants — the general term for non-solicitation and non-competition agreements — are supposed to protect a business when an employee leaves. But how do these work with platforms like LinkedIn, Facebook, and Instagram that have lengthened the reach of networking, blurred the line between business and personal communications, and made it possible for individuals to update their entire social circle on life events in an instant? In this landscape, what activities are a violation of an employee’s restrictive covenant? Does a former employee “friending” a former client on Facebook count as solicitation or competition? What about that employee “friending” a current employee at your company? What should you tell new hires to avoid a lawsuit or a nasty letter from their former employers?

In the past few years, there have been a handful of cases dealing with the implication of social media in this area but, as usual, technology is developing more quickly than the law. The bottom line from these cases is this: direct messages can cause legal issues, but status updates, profile posts and even blog posts are unlikely to cause legal problems. In other words, a new employee’s announcement that he or she has made a career change should not pose a problem. However, if that person directly targets specific people, the risk is much greater.

This makes sense. If an employee called former clients to let them know he or she had started a new company, this would likely be a violation of a restrictive covenant. Likewise, it would be a violation for an employee to direct message a former coworker a job posting at their new company. But an employee posting a job on his or her LinkedIn profile, where a former coworker may — or may not — see it is unlikely to cause problems.

Though targeted to a specific person, friend or connection requests follow the same principle. As long as the accompanying message doesn’t specifically solicit that person to take action beyond accepting the request to connect, it should not create problems. The recipient can choose whether to accept and develop the relationship further. In short, connections to former clients and coworkers through generally available information like the kind found in a LinkedIn profile are hard to limit.

So, how can you protect your business? If you have employees sign restrictive covenants, it’s a good practice to remind them of their obligations in an exit interview and to remind them that these agreements extend to what they do and say on social media. When hiring new employees, be sure to review their agreements with former employers and instruct them that social media updates should be limited to a general announcement of their new position and avoid any commentary about their former employer.  

Obviously, because the law is developing and situations can vary a lot, it is a good idea to also speak to a lawyer.