Today, marketing and sales are yoked through digital channels. Leads and customer relations are created and maintained on LinkedIn, Facebook, Twitter, Blogs, email, video calls, and chat rooms. Your salespeople use these tools to sell your products. Yet, change happens. Valuable salespeople with critical customer relationships and employee friendships will leave your company. Hopefully, when those employees leave your employ, you have non-competes and non-solicitation clauses in place which prohibit them from directly or indirectly soliciting employees or customers for a period of years after termination of employment.
You hear through the grapevine that your former super salesperson who just quit has an updated job status on LinkedIn. Now some of your employees and customers know where the former super salesperson is now employed. To add insult to injury, your former super salesperson has asked several of your employees to connect via LinkedIn. You are afraid of the Pied Piper effect and that more of your employees will leave you. Plus you paid good money for your lawyer to draft the darn non-solicitation agreement and you want your money’s worth!
How can you as an employer determine if your former salesperson is legally violating the non-solicitation agreement?
- Passive solicitation. Is the activity passive and what is the content and substance of the message conveyed? Most courts that have considered this issue have found that an update to an individual’s LinkedIn account is passive. But what about a new request to connect?In Bankers Life and Casualty Company v. American Senior Benefits, Bankers Life sued a former sales manager for updating his LinkedIn account and asking three former co-workers – current employees of his former employer – to connect. Bankers Life argued that asking existing employees to connect was targeted and it would uncover job listings of current employer. The sales manager argued that the connection request was a LinkedIn generic email simply asking to form a professional networking connection on social media. The court noted that the generic emails did not contain any discussion of Bankers Life, no mention of the new employer, and no suggestion that a job description be reviewed. Further, current Bankers Life employees had a choice whether or not to respond and connect, click on the former co-worker’s profile, or review job postings for the salesperson’s new employer. Accordingly, the mere act of asking someone to connect on a social network via a generic email generated by the network itself did not violate the non-solicitation agreement. In Pre-Paid Legal Services v. Cahill, the court held that posting on Facebook that an employee has moved and touting the new employer’s product did not constitute evidence of unlawful solicitation.Courts have also ruled that posting a job opportunity on a LinkedIn is not a solicitation and becoming “friends” with former clients on Facebook does not in and of itself violate a non-compete clause (Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp and Invidia and LLC v. DiFonzo).
- Active solicitation. An active solicitation would include not just posting on Facebook or LinkedIn of new employment status but taking other steps to coordinate direct contact. For example, letting everyone know when a non-compete was going to end and encouraging them to do business with you in future or engaging in tandem with email and phone call solicitations. This would be a violation of the non-solicitation agreement (see Coface Collections North America Inc. v. Newton (3d Cir. 2011)).
What do you do going forward, given the world is living off mobile devices and the web and that the sales process has changed so much?
- Revise Existing Non-Compete Agreements for New Employees and Newly Promoted Employees. Requiring existing employees to sign a new non-compete is fraught with danger. However, going forward, you could revise your existing non-compete agreements for new employees or promoted employees. For that class, you could rewrite your non-compete agreements to specifically prohibit your employees from soliciting your employees/customers on social media or on social networking platforms post-termination. The clause would have to be reasonable and take into consideration the industry and normal solicitation practices. Remind the employee when they leave of their promise. Given that restrictive covenants like these are disfavored, you could specifically state that the social media post-employment prohibition does not apply to contacts with customers and employees made prior to the inception of employment.
- Amending a Confidentiality Agreement or Requiring a Confidentiality Agreement. To stop employees from continuing to designate you as an employer on social media and protect your confidential information, you could make all employees promise in a separate confidentiality agreement that post-termination to erase/eliminate all company confidential information, including the fact that an employment relationship existed on all employee social media accounts (i.e., Facebook, Instagram and LinkedIn), cell phones, computers, or any electronic media developed now or to be developed in the future. There are costs and benefits to each of these considerations.
- Additional Language or Policy Changes. When revising your agreements, you could also prohibit employees from contacting customers for business purposes other than through the employer’s server or through the smart phone supplied by the employer. You could also think about prohibiting employees from doing business with customers on the employee’s personal social networking sites.
Non-solicitation law varies from state to state and frequently changes. If you decide to embark on the cost of revising your agreement, make sure it complies with current law and includes the Defend Trade Secrets Act Notice to more fully protect your confidential information.