Using LinkedIn could get you sued for breach of your restraint of trade agreement

A case, TEKsystems, Inc. v Hammernick et al, filed in the United States District Court for the District of Minnesota could signify a new trend in unlawful competition litigation in South Africa. The case involves a former TEKsystems, Inc. employee who was bound by non-solicitation provisions in her employment agreement with TEKsystems and who then contacted a number of people she was prohibited from contacting after her employment with TEKsystems came to an end. The interesting aspect of this case is that she contacted these individuals through LinkedIn, a very popular business networking and, increasingly, recruitment tool.

According to an article about the case by Renee M. Jackson at Nixon Peabody:

Brelyn Hammernick worked as a recruiter for TEKsystems, and signed a non-competition, non-solicitation, and non-disclosure agreement with TEKsystems. Hammernick’s employment agreement provided that, for a period of eighteen months following termination of her employment, she was prohibited from directly or indirectly approaching, contacting, soliciting, or inducing any person who had been a “Contract Employee” during the two-year period prior to the date of her termination and about whom she knew of by reason of her employment with TEKsystems, to: cease working for TEKsystems at clients or customers of TEKsystems, refrain from beginning work for TEKsystems at clients or customers of TEKsystems, or provide services to any individual, corporation, or entity whose business is competitive with TEKsystems. Importantly, these restrictive covenants in Hammernick’s employment agreement did not reference competition, solicitation, or disclosure via social media specifically.

The definition of “Contract Employee” in the employment agreement covers those IT professionals that Hammernick recruited and then placed on a contract basis with TEKsystems’ clients and customers, but who remain employed by TEKsystems.

When Hammernick’s employment with TEKsystems ended, she went to work for Horizontal Integration, Inc., also an IT staffing firm. The complaint alleges that, after her employment with TEKsystems ended, Hammernick unlawfully communicated, on behalf of Horizontal Integration, with at least twenty “Contract Employees” via LinkedIn, the premiere social networking website used for business and professional purposes.

The cause of action in this case is not new to South African law. South African employees are frequently bound by non-solicitation provisions contained in their employment agreements. Typically former employees fall foul of these provisions when they leave employment and attempt to solicit current employees to leave their employment and join those former employees at a competitor.

What is novel about the TEKsystems case and future, similar cases in South Africa is that the former employee, in this case Hammernick, allegedly solicited TEKsystems employees using LinkedIn. While the act of soliciting employees by sending a message over LinkedIn isn’t, in itself, novel (it could just as well as been direct email, sms or instant messaging), the fact that it was over LinkedIn adds a dimension to the case. LinkedIn’s purpose is to connect people for business purposes. Regardless of the content of the message Hammernick allegedly sent to TEKsystem’s Contract Employees, using LinkedIn to send the messages seems to be a pretty compelling indication of her intent to enter into a business relationship with them while at her new employer and TEKsystems competitor.

Sending a message to employees may be a pretty clear breach of non-solicitation provisions but the case also raises an even more interesting and, potentially, troubling question: does the mere fact that you are connected to a person on a site like LinkedIn imply solicitation? Put another way: given LinkedIn’s purpose as a business connector, would a former employee immediately be in breach of his or her non-solicitation undertakings if he/she remained connected to employees at the former employer on LinkedIn? This seems to me to be going too far but it remains to be seen how a court would interpret a connection on LinkedIn in this context? Finding that these connections create a presumption of a breach could mean that former employees would be required to terminate their connections to their former colleagues when they leave their employer. Such a finding would also have some disturbing privacy implications because a court would be interfering in personal relationships which may also be professional without any real evidence of improper conduct.

What is clear from this case is that local employers should consider the implications of connections across social networks when they frame their employees’ contracts and their restraint and non-solicitation provisions in particular. These provisions should cater for these sorts of connections as well as privacy and similar sensitivities.

Comments are closed.

Powered by WordPress.com.

Up ↑

%d bloggers like this: