The Law and Business of Social Media
March 19, 2013 - Litigation

Can Touting Your New Job on Social Media Sites Violate a Non-Solicitation Agreement?

According to a federal judge in Oklahoma in Pre-Paid Legal Services, Inc. v. Cahill, simply sharing information about a new job over social media does not mean that you are inviting former co-workers to come join you in violation of a non-solicitation agreement.

On February 12, 2013, U.S. District Court Judge James Payne of the Eastern District of Oklahoma adopted Magistrate Judge Steven Shreder’s report and recommendation on plaintiff Pre-Paid Legal Services, Inc.’s motion for preliminary injunction. Judge Shreder, among other things, rejected issuing an injunction against former employee Todd Cahill’s online activities. In doing so, the court held that general posts on a personal Facebook page about a new employer and invitations to former coworkers to join him on Twitter did not violate Cahill’s non-solicitation agreement.

Cahill was originally hired as a sales associate for Pre-Paid Legal Services, now known as LegalShield. Like Amway, LegalShield generates sales through its multi-level marketing program. Sales associates are rewarded not only for selling the product, but also for building their own team of junior sales associates. A percentage of every sale made by a recruit accrues to the associate who recruited them.

LegalShield tracks the contact information and performance statistics of each associate’s “downline,” the network of recruits, using a password-protected site. Cahill supplemented these resources with private Facebook pages of his own creation, to better communicate with the top sellers in his downline.

Cahill thrived at LegalShield, rising from sales associate to regional manager and eventually becoming a regional vice president. Upon promotion to regional manager, Cahill signed an agreement that included a non-solicitation provision.

In 2012, Cahill decided to leave LegalShield to work with a skin-care company called Nerium, also a multi-level sales firm. Notwithstanding his non-solicitation agreement, he met with other top-performing sales associates at LegalShield and urged them to join him when he left for Nerium. On August 10, 2012, Cahill called a meeting of high-ranking associates, told them of his imminent departure, and invited the curious to email him about his new plans.

The following day, Cahill emailed his resignation letter, and LegalShield cut off access to his downline through its site. With the exception of a final posting to the private Facebook pages that he had set up, Cahill’s relevant social media activity extended only to general updates on Facebook about his new job, and invitations to former coworkers to join Twitter.

In response to LegalShield’s request for a preliminary injunction, the court barred Cahill from direct contact with current LegalShield employees, as his in-person soliciting was undisputed. LegalShield, however, also requested that the court find that Cahill’s social media activity constituted impermissible solicitation.

The court examined Cahill’s activities in light of the defendants’ behavior in two other non-solicitation cases involving social media. In Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp., the court found that a job posting on a LinkedIn page did not constitute “solicitation” because the initial contact came through “a publicly available portal of LinkedIn.” The fact that the defendant, Hypersonic, had publicly posted a job listing that an Enhanced Network employee found did not rise to the level of solicitation.

Similarly, in Invidia, LLC v. DiFonzo, the court held that “friending” a former employer’s customers on Facebook did not constitute impermissible solicitation. There the court stated, “one can be Facebook friends with others without soliciting those friends to change [business].”

In the instant case, the court compared the facts of Invidia and Enhanced Network to Cahill’s behavior and found his actions were even more general. Cahill discussed his new employer in personal Facebook updates, which were directed to his friends at large, and invited former coworkers to sign up for Twitter. The court found that neither act was sufficiently direct to constitute solicitation, and LegalShield offered no evidence that Cahill’s posting would cause irreparable harm or had caused a LegalShield employee to change jobs.

The court did not say that the use of social media—as opposed to traditional means of communication—can never be a means of solicitation. The court left open the possibility that social media behavior that had the effect of targeting or soliciting employees, even absent direct messaging, could be prohibited. It remains possible that impermissible solicitation may be only a tweet away.