Employers use noncompetes to prohibit employees from engaging in a range of post-employment competition, including working for competitors, misusing trade secrets and other confidential information, and soliciting customers and co-workers to establish new relationships with competitors. Generally, if the employer can show that these kinds of restrictive covenants protect legitimate business interests and are not mere restraints on trade, they are enforceable. But that’s not the only “test.” Noncompetes are disfavored contracts under the common law in most jurisdictions, which means they often have to pass rigorous multi-part legal tests based on judge made law or statutory law. Typically they must:
- Be supported by valid consideration
- Not be unduly harsh or oppressive in curtailing efforts to earn a livelihood
- Be reasonably limited in duration and geographic scope
- Protect legitimate business interests, and
- Not violate public policy
A recent case from Illinois found that a LinkedIn “connection” request to three former co-workers did not violate an employee’s non solicitation clause, because it was a mere request without any content recruiting them to join his new employer. Bankers Life v. American Senior Benefits, 2017 Ill App. 160687. In reaching its conclusion, the Illinois Court of Appeals surveyed opinions involving alleged solicitations using social media that had reached varying conclusions because of the varying content of those alleged solicitations.
Bankers Life, the former employer enforcing the noncompete, argued that the LinkedIn connection request was merely the first step in a coordinated attempt to violate the non solicitation clause in part because any who accepted the request and visited the LinkedIn profile page of the defendant would see a job posting for the new employer, American Senior Benefits.
The Illinois Court of Appeals responded to that argument as follows:
Here, just as in BTS, the undisputed facts established that the invitations to connect via LinkedIn were sent from Gelineau’s LinkedIn account through generic e-mails that invited recipients to form a professional connection. … The generic e-mails did not contain any discussion of Bankers Life, no mention of ASB, no suggestion that the recipient view a job description on Gelineau’s profile page, and no solicitation to leave their place of employment and join ASB. Instead, the e-mails contained the request to form a professional networking connection. Upon receiving the e-mails, the Bankers Life employees had the option of responding to the LinkedIn requests to connect. If they did connect with Gelineau, the next steps, whether to click on Gelineau’s profile or to access a job posting on Gelineau’s LinkedIn page, were all actions for which Gelineau could not be held responsible.
The court thus held that the mere connection request was not a violation of the noncompete. I think this is the right result. The court shows us what more would have violated the non solicitation agreement: explicit offers of an opportunity to leave Bankers Life and join American Senior Benefits, discussions of Bankers Life—in less than favorable terms, mention of American Senior Benefits and the opportunities available there, and a specific suggestion that the recipients view the job description on the employee’s LinkedIn profile page.
Okay. Now that we’ve looked at a recent case, let’s talk about practicalities with non solicitation agreements. Particularly something I’ve said to clients many times over many years. Remember this phrase because I coined it: Solicitation is in the Eye of the Beholder. What do I mean by that? Well, what may seem innocent and permitted under a noncompete could seem nefarious to another. I think what the employee did, probably with the blessing of and coordination with American Senior Benefits is on the risky side. The other facts in the case are that several other employees left Bankers Life to go work for American Senior Benefits. The employee was only prevented from soliciting employees in a certain geographic scope, and there was some evidence that he was involved in soliciting other Bankers Life employees outside the prohibited geography.
When considering an exit strategy to accept an offer of employment within the confines of a noncompete containing non solicitation provisions, what is legal can be different than what is going to get you sued. That may matter if resources are scarce and attention is better focused elsewhere. A nervous employer who rightfully fears that a mass exodus was the result of generally unfair tactics is going to file suit and sort out the details in discovery. Alternatively, an employer who senses loss of market share, low morale among successful producers, or who is just plain nasty might sue to slow down otherwise fair competition. Either way, a sloppy exit strategy is no help in court and isn’t going to calm an upset employer or satisfy opposing counsel.
Ask yourself this question: for what purpose did the employee send the LinkedIn requests? Because you know it wasn’t merely to establish “professional connections.” Could the employee have waited out the non solicitation period, and if no, why not? These kinds of questions would get at what the real purpose was and would be asked in a deposition if the matter goes that far.
With the body of law that is developing, it looks as though departing employees who don’t already have social media connections with co-workers have some room here. But caution is always advised. Change just a few facts and you’ll get a different outcome. Although noncompetes are disfavored, courts will uphold them when they should and on the right set of facts. It’s the law, y’all.