Employers use a variety of restrictive covenants to protect their client and employee relationships, competitive interests and confidential information. These include non-compete agreements, non-solicit agreements and confidentiality/non-disclosure agreements. The proliferation of social media use in recent years has changed how people interact with each other and, more importantly, how employees do their jobs. Many employers make extensive use of social media as part of their business and encourage their employees to use social media for marketing, advertising, networking and other employment related activities. Many of these same employers, however, have not considered how social media may affect the restrictive covenants that they utilize – particularly non-solicitation agreements and confidentiality/non-disclosure agreements.
Agreements that prohibit an employee from soliciting clients or other employees for a specified time period after the termination of his or her employment, for example, need to be reevaluated in light of the type of communication that is made possible by social media sites. While employed, an employee may have clients or coworkers as Facebook “friends”, LinkedIn “contacts”, or Twitter “followers.” When this employee’s employment ends, his or her social media connections with these clients or employees likely will continue. A former employee also may initiate connections on these social media outlets with clients or employees of his or her former employer post-employment. If this former employee then updates his employment status, or posts information about his new employer and job, on his or her Facebook page or LinkedIn profile, or tweets this information, these clients and employees of the former employer likely will receive it without the former employee ever having to contact them directly. This raises the question of whether simply posting information on a Facebook page or LinkedIn profile, or initiating a connection on a social media site, can violate a non-solicitation provision. The answer to that question likely depends on the nature of the communication and the language of the non-solicitation provision at issue.
Employers can increase the odds of successfully protecting their client and employee relationships, however, by drafting non-solicitation provisions that specifically address the use of social media. For example, “solicitation” can be defined to include social media postings that the former employee knows will reach clients or current employees. An employer also can consider including language in an agreement that would require a former employee to terminate any current connections he or she may have with clients or other employees on social media sites for the duration of the period of the non-solicitation provision. Likewise, an employer can consider including language in an agreement that would prohibit a former employee from initiating any new connections with clients or other employees on social media sites for the duration of the period of the non-solicitation provision. Any such provisions, of course, would need to protect an employer’s legitimate business interests and otherwise be reasonable in order to be enforceable.
Confidentiality/non-disclosure agreements are another area that employers should reevaluate in light of social media. These agreements (as well as any general confidentiality policies maintained by an employer) should specifically address the sharing of information on social media sites, prohibit employees from posting any confidential information on social media sites, and make clear that the confidentiality/non-disclosure provisions apply equally to the use of social media. In addition, employers need to be aware that employees’ use of social media sites for business purposes, often with the encouragement of the employer, has the potential to undermine the confidentiality of information. For instance, if an employer encourages its employees to connect with clients on LinkedIn, the fact that the employees’ client contacts potentially are viewable by the public on LinkedIn will undermine any later effort to claim that the clients’ identities are confidential. Employers must consider these consequences when encouraging, or allowing, employees to use social media.
Social media has changed the world we live in and the way people do business. While the restrictive covenants that employers traditionally have used to protect their client and employee relationships, competitive interests and confidential information can be just as effective in this new world, employers should reevaluate their agreements and adapt them to meet the challenges presented by the prolific use of social media in this new era. If you would like more information on this issue and how it could affect your business, please contact Eric J. Schreiner at (215) 496-7217 or eschreiner@kleinbard.com.