Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

LinkedIn, Facebook and non-competes: Where's the line?

By | June 16, 2010, 4:58am PDT

If you ping former co-workers on LinkedIn and they wind up working at your new company are you violating terms of a non-compete clause? A lawsuit in Minnesota may shed some light on that question.

TEKsystems, an IT staffing outfit, is suing a former employee for soliciting its contractors and employees to go to a new firm Horizon Integrations.

Computerworld flagged the lawsuit and noted that it’s the first where LinkedIn is the center of a non-compete lawsuit. However, the actual complaint (download PDF) goes beyond LinkedIn connections, which do play a central role in the lawsuit. TEKSystems’ complaint against Brelyn Hammernik—and a bevy of others—looks like standard fare except for the LinkedIn connections. The complaint notes:

  • Hammernik left TEKsystems in November 2009 and then started communicating with people she knew.
  • However, TEKsystems said that Hammernik was taking her knowledge and contacting its workers, contractors and clients with the aim of bringing them on to her new company.

And then the complaint, which spells Hammernik’s name wrong in multiple places, continues:

Hammernik is soliciting TEKsystems’ Contract Employees and clients in the geographic area encompassed by the non-competition and non-solicitation provisions of the Hammernik Agreement. For example, Hammernik has communicated with at least 20 of TEKsystems’ Contract Employees using such electronic networking systems as “Linkedin.” Hammernik has, at a minimum, “connected” with the following TEKsystems’ employees through “Linkedin: Harold Osmundson, Steve Wicks, Kazim Merchant, Shawn Faber, Srujana Pasunuri, Shailaja Garishakurti, Kevin Jordahl, Mitha KC, Carl Boudreau, Tom Peterson, Seann Van Cleve, Bob Hasselman, Marcia Diterich, Bill Severson, Claude Wallander, and Brett Snaza. In her contacts with Tom Peterson, Hammernik asked Peterson if he was “still looking for opportunities.” She then stated that she “would love to have [you] come visit my new office and hear about some of the stuff we are working on.”

Beyond LinkedIn, Hammernik allegedly emailed co-workers before she left, told them she was going to Horizon and downloaded information from her work PC. It’s notable that the other folks named in the TEKsystems complaint don’t have the LinkedIn connections noted. The implication was that Hammernik was a LinkedIn ringleader. The big question is whether you need to be aware of social networking interactions when it comes to non-compete clauses. If you leave a company do you have to defriend people? Will non-compete contracts in the future contain social networking conditions?

Nixon Peabody lawyer Renee Jackson says in a blog post that this lawsuit could have wide ramifications.

Needless to say, Hammernik in a joint response to the complaint denies the allegation (download PDF). She admits that she has LinkedIn connections to the people named, but that they have never been TEKsystems employees. Meanwhile, connections are being questioned. Hammernik said in the response to the complaint:

Defendants further affirmatively state that Claude Wallander, Seann Van Cleve and Tom Peterson initiated contact with Hammernik by inviting her to “Link In” with them and when Hammernik learned of this she provided the information to a TEKsystems recruiter, Elicaseth You. Defendants admit to Hammernik’s communications with Tom Peterson but state that the communications did not relate to staffing or soliciting IT business for Defendant Horizontal Integration.

In addition:

Defendants affirmatively state that TEKsystems’ and its employees’ use of LinkedIn and Facebook for recruiting, promotional or other purposes voids any claim that any information posted therein is trade secret or confidential.

Add all of this up and you have a social networking slippery slope where every connection will be questioned. This spat appears to be headed to a trial. The discovery process is supposed to be completed by Feb. 1, 2011.

Kick off your day with ZDNet's daily e-mail newsletter. It's the freshest tech news and opinion, served hot. Get it.

Topics

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

Talkback Most Recent of 15 Talkback(s)

  • Wow, this really is scary.
    Realistically one of the benefits of working in different places is developing professional networks (non-technical based originally). You met people, developed a professional report with them, and if you left the original organization you took your contacts with you. Some people are valuable because they know key players in different markets and services.

    Some companies try to crush this because basically you are taking some of their business away but in reality stopping it is very hard.

    If this starts to translate into the Internet and social networking, it will be a real nightmare. Especially if you private contacts overlap your professional ones. Theoretically you could lose access to your personal contacts as well or those personal contacts could become the property of the original company.

    I really think that creating artificial boundaries between personal and professional lives is going to have to be done. Otherwise you will end up with a society that basically can't function at any level.
    ZDNet Gravatar
    mr1972
    16th Jun 2010
  • personal and professional boundaries
    @mr1972 There are huge differences between "professional" and "employee". Mostly, what we have are employees against whom employers are attempting to extend control "beyond the grave", that is, after the employee has left. True professionals independently charge fees, rather than earn salaries. This point is often overlooked.
    ZDNet Gravatar
    Mahegan
    16th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    Minnesota law is rather strict regarding non-competes. The first big test is Consideration. What did the employer offer in consideration for the employee agreeing to the non-compete? Even if the employee agrees to the non-compete, the court can find it invalid if insufficient (or no) consideration if included in the agreement. Continued employment doesn't count.

    Ref: http://www.mansfieldtanick.com/CM/Articles/Will-Your-NonCompete.asp
    ZDNet Gravatar
    steve_bult
    16th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    The whole idea that a company can hold on to it's employees by shielding them behind a non-compete clause has always struck me as being idiotic.

    Are your employees valuable to you? Prove it! Treat them with respect. Engage them. Pay them appropriately.

    Then fire the lawyers and throw all those non-compete clauses out the window. You no longer need them.
    ZDNet Gravatar
    JPSeabury
    16th Jun 2010
  • Classic Aerotek/Allegis/TEKsystems.
    http://www.connonwood.com/Class-Action-Johannes-v-Aerotek.asp

    Johannes v. Aerotek

    Nature of Case

    Nicholas P. Connon served as lead class counsel for the certified plaintiffs' class. This class action lawsuit was prosecuted on behalf of a class of approximately 3,000 current and former employees who worked for Aerotek Inc. (now known as Allegis Group Inc.) and various related entities throughout the United States as recruiters. The case sought payment of overtime pay, waiting time penalties and interest due and owing to the class. The case was filed and litigated for approximately five years in the United States District Court for the Central District of California, and it was one of the largest nationwide wage and hour cases ever prosecuted.

    Settlement/Implementation Completed. This case was settled in 2002 for $17 million. Implementation of the settlement has been completed and this case has been fully resolved and dismissed.
    ZDNet Gravatar
    Ponosby Britt OBE
    16th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    In Europe, non-compete clauses are practically illegal; the only time I believe they've ever held up in court is where one bank took on another's employee who had personal relationships with their richest customers specifically to steal the business.
    As @steve_bult said, a similar thing applies in the UK in that if you want someone not to work for competitor then in theory for X months you have pay them "gardening leave" specifically so that they are still under contract; i.e. some form of compensation to tie them down
    ZDNet Gravatar
    speculatrix
    16th Jun 2010
  • Employees vs. contractors
    I'm not a lawyer and I don't play one on TV.

    Legally, contractors are independent businesses that are vendors to the client business. There is nothing preventing you from soliciting a former employer's janitorial service or plumber. If they do argue that luring away independent contractors is taking employees away, then they might find that the IRS is now interested in whether those "contractors" should have been W-2 employees.

    Now, most non-competes prevent soliciting the former employer's customers, but these are the former employer's vendors.
    ZDNet Gravatar
    wizard_of_oz
    16th Jun 2010
  • Ha! GOOD!
    Maybe this is another step to do away with the feudal system we've been increasingly engaged in. Hopefully businesses will be less able in the future to have employees sign these draconian employment contracts (and at the same time stop offering "bennies" in the form of health programs).

    I once was applying for a job as a tech support. I noticed at the bottom of like the second page of my employment contract that they claimed the right to any and all creative works I make while employed with them. I do 3D graphics at home, and the work I would be doing was in no way related to "creative work" (tech support!). I pointed it out to them and asked if we could cross that section out before I signed, and the reaction was basically, "don't let the door hit you on the way out".

    So, anybody who signs a contract that says you can't compete when you no longer work for them, or that the fruits of your labor outside your job description belongs to them, should be told to get stuffed, and then have the term violently demonstrated.
    (and my good relations with former employees, vendors or customers belongs to me, not the company).
    ZDNet Gravatar
    hiraghm@...
    16th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    Non-disclosure - Yes! - No Problem!
    Non-compete - No Way! - that's a deal killer!
    ZDNet Gravatar
    Original Eggman
    16th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    Typical BS harassment lawsuit. The founder of a company I once worked for was immediately sued by his former employer over a "non-compete" clause when he and two other colleagues left Company X to form their own company. Even though they didn't go after Company X's clients. The judge threw out the suit, ruling that such non-competes were basically slavery, and not enforceable. Still, all it cost Company X was a bit of time to and money to have their lawyers draw up papers and file the suit. This seems to be a common tactic among body shops to intimidate their workers. Glad to hear about Allegis getting slapped for this - hope Hammernik files a countersuit, but she probably doesn't have the time or money.
    ZDNet Gravatar
    pyroman99
    17th Jun 2010
  • Rather daft, when you think about interviews per se!
    Fact: If you go to an interview with X many years experience in Y industry and with Z similar job experience it's valued over another candidate.

    So, if you were to follow a career you've invested time, money, training and studying for qualifications it would mean that all this has to be thrown away if you decide to compete, or better put, follow on in a career path you've invested in.

    It's a pity the defence isn't countered by future TOTAL loss of earnings for life of contract & the previous loss of career path vs natural churn of employee + retraining of other. I think this would hammer the point home. Either that or create a firm of consultants and have a silent mgmt board or partner running the other company. Same result but different route. Madness!
    ZDNet Gravatar
    helruna
    17th Jun 2010
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    Death to non-competes clauses!!!

    20th century dinosaurs are dying in the face of their own disloyalty to their workforces and now they complain about former employees earning money for housing and food.

    Good luck with that you old Dinos.

    happy

    R
    ZDNet Gravatar
    roger_tee
    17th Jun 2010
  • good idea about facebook
    A good post. Do you know tattoo? It is quite amazing. We supply kinds of tattoo kits, tattoo machines, tattoo needles, tattoo ink and so on. Please buy iron tattoo machineat wholesale price from us.DpvVi
    ZDNet Gravatar
    gavin.chan
    30th Sep
  • good idea about facebook
    A good post. Do you know tattoo? It is quite amazing. We supply kinds of tattoo kits, tattoo machines, tattoo needles, tattoo ink and so on. Please buy tattoo kits sale at wholesale price from us.aypDv
    ZDNet Gravatar
    gavin.chan
    2nd Oct
  • RE: LinkedIn, Facebook and non-competes: Where's the line?
    I find out about a issue new on unique weblogs every single day. It may be generally refreshing to study mulberry bag sale by means of posts of other bloggers and find a point from them. Many thanks for sharing.
    ZDNet Gravatar
    jackson1984-24316069205748857739440257893812
    11th Oct

Talkback - Tell Us What You Think

Formatting +
BB Codes - Note: HTML is not supported in forums
  • [b] Bold [/b]
  • [i] Italic [/i]
  • [u] Underline [/u]
  • [s] Strikethrough [/s]
  • [q] "Quote" [/q]
  • [ol][*] 1. Ordered List [/ol]
  • [ul][*] · Unordered List [/ul]
  • [pre] Preformat [/pre]
  • [quote] "Blockquote" [/quote]

The best of ZDNet, delivered

ZDNet Newsletters

Get the best of ZDNet delivered straight to your inbox

Facebook Activity

White Papers, Webcasts, & Resources