Probably not.  The case law of many states is littered with what are sometimes referred to as “rolodex” cases.  These cases typically involve a departing employee who takes a rolodex (or other collection of customer or vendor information) that was created while on the former employer’s payroll.  The former employer claims the rolodex is company property.  Customer lists or compilations of customer information (such as rolodexes) have long been recognized as potential trade secrets.  But what happens to those same contacts if they are listed on an individual employee’s LinkedIn or similar website?  Can a recruited employee (who would not be permitted to take their rolodex) rightly consider contacts listed on their LinkedIn page to be theirs rather than their employer’s?  This scenario has been the source of litigation.  (See, for example, TEK Systems, Inc. v. Hammernick, CV00819, filed March 2010, which has since settled.) 

The argument is fairly simple.  Is anything listed on a LinkedIn or similar social media website secret or is it now part of the public domain?  Many companies have responded to this possibility by seeking to prevent employee’s use of LinkedIn or restricting the identification of company customers on the website.  Many commentators fear that such restrictive policies may result in babies going out with the bath water.  Effective sales professionals need to network and barring them from use of evolving social media may hamstring those professionals in doing what they were hired to do – making and establishing a network of contacts that are willing to do business with them.

In Sausko Group, Inc. v. Courtney (WL *3613855), a federal judge in New York found a defendant could not be sued for taking client lists because the information could be collected in just a few minutes on Facebook or LinkedIn.  Information that is readily obtainable through an internet search is, by definition, not secret.  Given the existence of the large volume of customer identity and contact information that is now available on the internet, the idea that lists of customer identity and contact information are trade secret may be obsolete.  Of course, a particular determination that specific customer information constitutes a trade secret will depend on the circumstances.  Where social media messaging systems have been used as part of company policy or where information is linked to more than customer identity and contact information, the claim that the information constitutes a trade secret may be stronger.

By:       Lizbeth V. West, Esq.

Most employers are aware of the federal law known as the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) which is designed to protect those who serve in the armed forces from discrimination and retaliation. However, many California employers are unaware that section 394 of the California Military and Veterans Code also prohibits employers from discriminating against members of the armed forces (“Section 394”). Therefore, an employee who believes he/she has been discriminated against based on his/her military status has the right to pursue a claim under one or both laws.

Continue Reading When Can a Supervisor be Held Individually Liable for Discriminating Against an Employee Based on His or Her Military Status? It Depends on Whether Federal or California Law Applies

On October 21 2011, Groupon, Inc. sued two former sales managers who left their employment with Groupon to join a competing venture, Google Offers, which was allegedly started by Google after its unsuccessful attempt to buy Groupon. The lawsuit, which was filed in Chicago, Illinois, accuses the two former employees of breaching their employment agreements and alleges that the former employees took and will be called on to divulge Groupon’s trade secrets and confidential business information in the course of their new employment with Google. The lawsuit also alleges that the two former employees breached a non-compete provision in their employment agreements by going to work for a direct competitor within 24 months of the termination of their employment with Groupon. 

One of the former employees is alleged to have emailed Groupon customer and business information to a personal email account on the day he resigned. The lawsuit requests the Court to enjoin the defendants from, among other things, using this information in their new employment.  Further details about this lawsuit can be found at here.

One thing to remember is that the applicable state law is key in a lawsuit such as this one.  Under Illinois law, a court can enforce a restrictive non-compete agreement if its terms are reasonable to protect a legitimate business interest of the employer.  This is not the case in California.  Under California law, a non-compete provision is almost always unenforceable in an employment agreement. Had this lawsuit been filed in California, it is almost certain that the court would dismiss the breach of contract claims arising out of the employment agreement’s non-compete provisions.   (See “Often But Not Always Void” in this blog.)

Also, neither Google nor Google Offers are named as defendants in this lawsuit (yet).  There may be several strategic reasons for this.  First, any injunction issued by a court against the two former Groupon employees will likely contain language enjoining not only them, but “any person acting in concert with them.”  This could bind Google (or at least restrict its ability to employ the two former Groupon employees) without Groupon having to litigate directly against Google.  Second, Groupon could be using the case against its two former employees to conduct discovery to determine whether Google has any potential liability before suing Google.

This lawsuit highlights the pitfalls that can arise when hiring employees from a direct competitor.

By:       Chuck Post

Because employers and employees have the right to reach agreement as to the terms, conditions and nature of the work, many employers believe that anything they can get an employee to agree to is legal and permissible. This notion can lead an employer into a violation of law. Some obligations, however, such as the obligation to pay overtime to non-exempt workers, the provision of worker’s compensation, and the obligation to provide a safe work environment (to name just a few) cannot be bargained away. An employee’s agreement to surrender these statutory protections is void, and can also constitute a violation of criminal law.

Continue Reading Wage and Hour Refresher: Are You Committing a Misdemeanor?

By:     Charles L. Post

        Lawyer Answer: It depends.

        Here, that answer is not simply a dodge but is instead a reflection of what can be some complicated legal terrain. The question of advanced training costs arises in a number of situations: (1) where an employer advances costs for training to obtain a license or certification that is required by an ordinance or statute; (2) where such certification or licensure is not required by statute or ordinance but the employer requires it as a condition of employment; and (3) where the training is neither a requirement of statute, ordinance or by the employer, but reimbursement or supplement of such training costs or tuition is provided as a benefit. 

Continue Reading When Can an Employer Seek Reimbursement for Training Costs Advanced to an Employee?