The New Jersey Employment Law Firm Blog
The social media network LinkedIn played a prominent role in a recent dispute over a non-compete agreement, demonstrating that employees’ use of social media can affect not only their current employment and their future prospects for employment, but also their relationships with past employers. A federal court rejected an employer’s motion for a temporary restraining order (TRO) and preliminary injunction (PI) against a former employee, which was based in part on a claim that the description of her new job on her LinkedIn profile indicated that she was in breach of her employment agreement. Nicklas Associates, Inc. v. Zimet, mem. op. (D. Md., Dec. 9, 2014). The employer did not establish one of the four elements required to obtain a TRO or PI, the court held, meaning that it was not rejecting the merits of the underlying breach of contract claim. The parties dismissed the lawsuit by stipulation, however, before the court reached the merits.
The plaintiff/employer operates a staffing company specializing in “interactive, creative, and marketing personnel.” Id. at 1. The defendant/employee began working for the employer as a branch manager in Iselin, New Jersey in November 2011 and moved into an account manager position in December 2013. Her employment agreement included a non-compete clause with a duration of 12 months and a range of 50 miles, which applied to the business of “placing temporary workers and permanent hires in the fields of creative, marketing, communications, marketing and web.” Id. at 3.
The employee resigned from her position in July 2014. The employer claimed that it learned about one month later that she was working for a direct competitor about 25 miles from the employer’s location. It came to believe that this position violated the non-compete agreement because the employee updated her LinkedIn profile to describe her occupation as a “creative recruiter.” Id. at 4. Two emails sent to the employee’s old account also allegedly supported this view. The employer sent a cease and desist letter and then filed suit in December 2014. It alleged breach of contract against the employee and tortious interference with a contract against her new employer.
The lawsuit requested a TRO and a PI restraining the employee from engaging in the business described in the non-compete agreement. Courts have set a very high bar for obtaining a TRO or a PI. A movant must be able to prove four elements: (1) likelihood that the lawsuit will succeed on its merits, (2) likelihood of “irreparable harm” without this relief, (3) the “balance of equities” favors the movant, and (4) the requested relief is in the public’s interest. Winter v. Natural Resources Defense Council, 555 U.S. 7, 20 (2008).
The court held that the employer had not established the “irreparable harm” element. It did not address the other three elements. The employer had to present evidence that, without a TRO or PI, it risked “permanent loss of customers or loss of goodwill.” Nicklas, mem. op. at 7. The court noted that, at the time of its order in December 2014, four months had passed since it first learned of the employee’s new job, but that it had not shown as single example of a lost customer, lost sale, or lost goodwill. It therefore denied the motion. The parties dismissed the case by agreement two months later in February 2015.
If you are dealing with an employment dispute in New Jersey or New York, contact the Resnick Law Group at 973-781-1204 or (646) 867-7997 to speak to a knowledgeable and experienced employment law attorney.
More Blog Posts:
Sandwich Chain Reportedly Requiring Employees to Sign Non-Competition Agreements, The New Jersey Employment Law Firm Blog, November 12, 2014
NLRB Allows McDonald’s Employees to File Complaints Against McDonald’s and Individual Franchisees as “Joint Employers”, The New Jersey Employment Law Firm Blog, November 3, 2014
New York City Teacher’s Petition for Reinstatement Claims Retaliation, Wrongful Termination, The New Jersey Employment Law Firm Blog, July 9, 2014