Protection of confidential information
Contract provision: “Except as the Company may otherwise authorize in writing, I will not use or disclose to others, reproduce or copy at any time, except as my Company duties may require, either during or subsequent to my employment, any private information of the Company or of others as to whom the Company has an obligation of confidentiality which may come to my attention or be developed by me during the course of my employment other than information which is or becomes public knowledge in a lawful manner.”
Scenario 1: Sasqua Group is an executive search consulting firm specializing in recruitment and placement of professionals in the financial services industry. Sasqua maintains a central database of client information formed by its employees, which includes client contact information, individual profiles, contact hiring preferences, and resumes. Sasqua recruiter Lori Courtney leaves company to start her own executive search firm. Her database access is removed upon her departure. In the following weeks, several Sasqua customers inform company they will be switching to Courtney’s new firm. Sasqua seeks to enjoin Courtney from using company contacts, claiming they are “confidential and proprietary” trade secrets that are not available from a public source. Courtney argues the customer list is not entitled to trade secret protection, as information on the capital markets businesses is readily accessible on the Internet. In addition, she can obtain a professional's name, job title, resume, and references from Bloomberg, LinkedIn, Facebook or general Google searches.
Covenant not to compete during and after employment term
Contract provision: “Employee agrees that at no time during the term of this agreement, or for a period of [number of years] years immediately following the termination of [his/her] employment under this agreement, will employee, for [himself/herself] or in behalf of any person or corporation other than employer, engage in the [name of enterprise] business within [name of city], [name of state]. Employee will not, directly or indirectly, solicit or attempt to solicit business or patronage of any person or corporation within that territory for the purpose of selling [type of product] and such other business and service now offered by employer.”
Scenario 2: Former employee leaves current employer to work for a competitor. Employee sends notice throughout his LinkedIn network announcing he is newly employed. Notice explains job duties, responsibilities and details of the new position. Some LinkedIn contacts are customers that he served while employed by the former company. Some LinkedIn contacts are customers he sold products to prior to working for former employer.
Scenario 3: Former employee starts a discussion on LinkedIn about a hot topic in her former employer's industry. The message goes to all of her LinkedIn contacts, including customers of the former employer.
Scenario 4: Former employee has a Twitter page, that she started while working for former employer. She uses the page to tweet about recent updates in the industry. Many of her former employer's clients “follow” the employee. She continues to use her Twitter account to make industry updates while working for a competitor, and her former employer’s clients continue to receive them.
Instructions:
Discuss whether there is a breach of contract in scenarios 1-4 above. Cite specific facts to support your answers.