It is well established that an employer’s customer list may constitute a protectable trade secret, but if the customer information is maintained in employees’ social media platforms, does this preclude trade secret status? A lawsuit currently pending in the Central District of California, Cellular Accessories for Less, Inc. v. Trinitas, LLC, No. CV 12-06736 DDP, 2014 U.S. Dist. LEXIS 130518 (C.D. Cal. Sept. 16, 2014), addresses the novel issue of whether a terminated employee may be liable for misappropriation of trade secrets for retaining LinkedIn contacts that were created during the duration of employment. The district court judge determined that there were sufficient triable issues of material fact on this issue to deny defendants’ motion for summary judgment.
Plaintiff Cellular Accessories for Less (“Cellular”) sold mobile phone accessories to businesses. Cellular fired the defendant, David Oakes, who then started his own competing business, co-defendant Trinitas, LLC. Cellular sued Oakes for multiple tort claims, including a claim that he misappropriated Cellular’s trade secrets when he: 1) Emailed himself a customer information file with 900+ personal and business contacts; 2) Emailed himself contact information for the company’s purchasing agents, detailed billing preferences, pricing and at least one client strategy document; and 3) Maintained his LinkedIn contacts after termination.
Defendants argued that Oakes’ LinkedIn contacts could not possibly be considered trade secrets, because all of his contacts would have been viewable to any of his other LinkedIn connections. Defendants further argued that anyone could have identified these customers by simply searching LinkedIn or another online business directory; in fact, Oakes had located many of his contacts in response to suggestions made by LinkedIn. Defendants also asserted that Cellular had encouraged salespeople to use LinkedIn for business development and had failed to inform employees that LinkedIn contacts were proprietary or confidential.
Cellular responded by pointing out that LinkedIn information is only available to the degree that the user chooses to share it, and therefore it is not automatically the case that contact information is viewable to any other LinkedIn connection. The judge declined to take judicial notice on the functionality of LinkedIn’s service and determined that the factual dispute as to whether and to what extent Oakes’ contacts were made public was sufficiently material to preclude a finding of summary judgment for defendants.
Given the increasing importance of LinkedIn and other social media sites in expanding business opportunities and professional networks, it is important that employers educate their employees about the proprietary and confidential nature of customer information located in a social media platform.