Social Media and Noncompete, Nonsolicitation Agreements

April 16, 2018 | By NACE Staff

Legal Issues
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The significantly increased use of social media has changed the way employers (and courts) have handled restrictive covenant issues, specifically noncompete and nonsolicitation agreements.

Most states have rules that provide that noncompete agreements must be reasonable in geographic scope. As such, most courts have viewed restrictive covenants that lacked any geographic restrictions as overly broad and unreasonable, and, therefore, unenforceable. With the use of social media and web-based companies, courts have expanded their view on the “limitless boundary” noncompete agreements. In this regard, some courts have allowed such broad geographic restrictions, provided the employer can show that there is a reasonable business interest in such language. For example, an employee uses social media to solicit customers on behalf of her employer and therefore does not have a geographic boundary.

In addition to expanded scopes of noncompete agreements, social media has increased the potential for violations of nonsolicitation agreements. Is it a violation of a nonsolicitation agreement to be “friends” with someone on social media, or to connect with him or her on LinkedIn? It all depends on the agreement and the actions of the former employee. Many employers are now specifically including limitations on post-employment social media activity in their agreements to address any potential issues. Even if such language is not specifically included, courts have indicated that an individual’s actions on social media can rise to a violation of a restrictive covenant.

By way of example, if a former employee “targets” former or prospective customers using social media, it has been construed as a violation of a nonsolicitation agreement. Conversely, if a former employee merely announces a new position and is not actively “soliciting” former customers or prospects, it may not be a violation of the restrictive covenant.

For more information about noncompete and nonsolicitation agreements, see “Restrictive Covenants: Noncompete, Nonsolicitation, Nondisclosure Agreements” from the February 2018 issue of the NACE Journal.