When does social media activity cross the line and pose a non-compete violation? In Bankers Life and Casualty Co. v. American Senior Benefits, LLC, 2017 IL App (1st) 160687, Bankers Life sued several former employees who had left the company and joined a competitor, allegedly in violation of their non-compete agreements. The appeal resulted from a summary judgment award in favor of one particular employee, who was a sales manager in a Rhode Island office of the company, and focuses primarily on that employee’s situation
A non-compete agreement must be reasonable in its time and territory restrictions to be enforceable at law. In this case, the non-compete agreement provided that the employee would not compete with the company for two years after termination, within the sales territory of the Rhode Island office.
The company argued that one way the employee had violated his non-compete was by inviting other company employees to connect on LinkedIn and, once they were connected, the other employees would click on his profile page, and see job postings for the competitor company. The former employee argued that he had not breached his non-compete because he did not solicit anyone on LinkedIn, but merely sent them generic professional networking connection requests, and they in turn of their own accord viewed his page and the job postings. The trial court agreed and awarded him summary judgment, and the appellate court affirmed.
The case opinion also provides a useful reference of other cases on the issue, a summary of the facts at issue in these cases, and how the courts ruled–some finding a non-compete violation and some not. Cases referenced as finding NO VIOLATION include:
- A Connecticut case of a web designer who posted on LinkedIn inviting viewers generally to check out a website he made for his new company, without any evidence of the former company employees having actually done so, nor any evidence of a company policy on LinkedIn use.
- An Indiana case finding that a job opportunity posting on LinkedIn was not a solicitation.
- A Massachusetts case finding that sending a former client a Facebook “friend request” did not inherently violate a non-compete.
- An Oklahoma case finding that a former employee’s Facebook post touting his new company’s product, and viewed by other employees of the former company, did not violate his agreement not to solicit company employees.
Cases referenced in which the court found a non-compete VIOLATION are:
- A U.S. 3rd Circuit Appellate Court ruling upholding a preliminary injunction, in which the non-compete was part of a business (asset) sale agreement, not just employment. In this case, shortly before the non-compete was up, the seller set up a new business and posted online publicly that his non-compete was about to expire and encouraging professionals to apply to his new company.
- A Michigan case in which the former employee made website / blog posts encouraging other company employees to leave, stating “if you knew what I knew, you would do what I do.”
The Bankers Life case itself and the court’s recitation of other case law on the topic provide a very useful insight for employers and employees into non-compete enforceability in the age of social media. Again, because non-compete agreements must be reasonable to be enforceable, each case is potentially a little bit unique and requires a specific review and analysis of the document. If you have questions about your agreement as an employee, or about the form of the agreement you as an employer use with your employees, it is well worth it to consult an attorney in your jurisdiction who practices in this area of the law.
Nate Hinch is an Illinois attorney at the law firm of Mueller, Reece & Hinch, LLC who advises clients in the areas of business law and estate planning, and represents them in both transactions and in litigation and arbitration. He also blogs about legal issues at www.hinchlaw.blogspot.com and can be reached at www.mrh-law.com and firstname.lastname@example.org