Must a Plaintiff Mitigate Emotional Distress Damages in Title VII Cases?

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Recently, Judge Haggerty of the District of Oregon, upon a motion filed by the EEOC for the Judge to reconsider his earlier decision, concluded that there is no duty to mitigate emotional distress damages under Title VII.  See EEOC v. Fred Meyer Stores, Inc., No. 3:11-cv-00832-HA, 2013 U.S. Dist. LEXIS 134089 (D. Or. Sept. 19, 2013).  The court’s earlier holding, which Judge Haggerty reversed on reconsideration, is found at EEOC v. Fred Meyer Stores, Inc., No. 3:11-cv-00832-HA, 2013 U.S. Dist. LEXIS 85649 (D. Or. June 17, 2013).  The employer’s position was that a plaintiff claiming emotional distress damages fails to mitigate those damages when s/he fails to seek psychological counseling, and that in such circumstances, damages for emotional distress should be reduced. Id. at *13.  In originally agreeing with the employer’s argument, Judge Haggerty noted the following:

In addition to Petroci v. Transworld, No. 12-00729, 2012 U.S. Dist. LEXIS 161312, 2012 WL 5464597 (W.D.N.Y. Oct. 19, 2012), upon which defendant relies, there are several cases indicating that the imposition of a duty to mitigate emotional damages is appropriate. See Neal v. Director, Dist. of Colombia Dept. of Corrections, No. 93-2420, 1995 U.S. Dist. LEXIS 11461, 1995 WL 517249, at *15 (D.D.C. Aug. 9, 1995) [Lamberth, J.] (holding that plaintiff failed to mitigate front pay damages by refusing to take anti-depressants); In re Air Crash Disaster at Charlotte, N.C. on July 2, 1994, 982 F. Supp. 1101, 1111 (D.S.C. 1997) (in holding that even though plaintiff refused to take antidepressants, he did not fail to mitigate damages, the court explained that a plaintiff has the duty to mitigate damages and the “court can consider whether that person has failed to follow the advice of their physician or other treating professional”) (citation omitted); Salas v. United States, 974 F. Supp. 202, 211 (W.D. N.Y. 1997) (concluding that plaintiff cannot be charged with a failure to mitigate damages because she made reasonable efforts to treat and cure her condition); Baker v. Dorfman, No. 97-7512-DLC, 1999 U.S. Dist. LEXIS 4451, 1999 WL 191531, at *6 (S.D.N.Y. Apr. 6, 1999) (holding that a jury could have reasonably concluded, after receiving an instruction on mitigation of damages related to pain and suffering, that plaintiff took reasonable steps to alleviate his distress);Rogan v. Lewis, 975 F. Supp. 956, 966 n.14 (S.D. Tex 1997) (explaining that plaintiff’s failure to exhaust administrative remedies may be relevant to plaintiff’s failure to mitigate emotional damages); Chuy v. Philadelphia Eagles Football Club, 431 F. Supp. 254, 263-64 (D.C. Pa. 1977) (upholding a jury instruction on mitigation of emotional damages).

The Ninth Circuit’s decision in Gomez v. Am. Empress Ltd. P’ship, 189 F.3d 473 (9th Cir. 1999) is also persuasive. In Gomez, the plaintiff hurt his back while working and could no longer perform his job duties. He sued his employer for economic injuries, pain and suffering, and emotional injuries. The trial court reduced the plaintiff’s award by twenty-five percent, reasoning that if plaintiff had tried to find other employment or otherwise mitigated his damages, both economic and non-economic damages would have been reduced. Id. at 2. This holding indicates that the Ninth Circuit supports the imposition of a duty to mitigate emotional damages.

Plaintiff has failed to direct this court to a case that indicates that the duty to mitigate is inappropriate to limit emotional damages. In consideration of the arguments from both parties and the relevant case law, this court holds that the failure to mitigate emotional damages is a valid affirmative defense.

Id. at *13-16.

The EEOC moved for the judge to reconsider his decision, on the grounds that “Title VII contains no requirement that claimants mitigate their compensatory damages, and through this court’s Opinion and Order, it created a burden on plaintiffs that Congress did not intend.”  The EEOC argued that when amending Title VII in 1972, “Congress explicitly chose to include a duty of claimants to mitigate back pay losses.”  “Congress’ deliberate decision to carve out this duty to mitigate damages,” the EEOC continued, “clearly signifies that Congress did not intend to create a duty to mitigate all compensatory damages.”  (As a brief aside, for litigants wishing to make such an argument in subsequent litigation, the fact that the EEOC took this position in this litigation would arguably be entitled to at least some level of deference by courts.)

Also of note, the cases cited in Judge Haggerty’s original ruling primarily involved principles of general tort law, and not in the context of Title VII disputes.

In reversing his original holding on reconsideration, Judge Haggerty’s reasoning tracked the EEOC’s arguments:

Congress’ statutory purpose is most readily demonstrated by Congress’ 1972 Amendments to Title VII. In the 1972 Amendments, Congress explicitly chose to include a duty of claimants to mitigate back pay losses. Pub. L. No. 92-261, 86 Stat. 103, 107 (1972). Congress’ deliberate decision to carve out this duty to mitigate damages clearly signifies that Congress did not intend to create a duty to mitigate all compensatory damages. If Congress intended there to be a duty to mitigate all compensatory damages, it is illogical that it chose to single out the duty to mitigate back pay alone.

2013 U.S. Dist. LEXIS 134089 at *5.  The employer argued, and Judge Haggerty recognized, that the employee had raised the above argument for the first time on reconsideration. Id. at *3.  However, the court also noted that “[a] court abuses its discretion in denying a motion for reconsideration if the underlying decision involved clear error of law,” and went on to hold that the Court had committed clear error of law in its initial decision Id. at *3-4 (internal quotations and citations omitted).

For an interesting discussion of the issues raised by mitigation requirements for emotional distress damages in tort cases in general, see Eugene Kontrovich, The Mitigation of Emotional Distress Damages, 68 U. Chi. L. Rev. 491 (Spring 2001), available here.

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The Gift that Keeps on Giving: Vazquez v. Caesar’s Paradise Stream Resort

Vazquez v. Caesar’s Paradise Stream Resort, 524 Fed. Appx. 831 (3d Cir. 2013), on remand, No. 09-cv-0625, 2013 U.S. Dist. LEXIS 170178 (M.D. Pa. Dec. 3, 2013), is a virtual plaintiffs’ Christmas tree with many a bright bauble for 2014 and beyond. The case is not only a victory for the plaintiff, but contains several important elements of which plaintiff’s attorneys should take note.

Facts

Ms. Carmelita Vazquez, a woman of African-American and Hispanic descent, worked for seven years as a housekeeper at the Caesar’s Paradise Stream Resort in Mount Pocono, Pennsylvania. On May 28, 2007, Ms. Vazquez arrived at work with her hair styled in cornrows. Her manager told her to remove the cornrows, and when she refused, Ms. Vasquez was fired. Attorneys for Starwood Resorts, Caesar’s parent company, later asserted that the facility terminated Ms. Vasquez because her hairstyle in cornrows was not “conservative in style” as required by the personal appearance policy (though no specific hairstyles are listed as acceptable or prohibited). As supervisors had interpreted this policy, employees were permitted to wear braids as long as the braids did not make the employee’s scalp visible.

Following her termination, Ms. Vazquez filed a complaint with the EEOC alleging race and national origin discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et. seq. (2011). She stated that she suffered disparate treatment, as she was fired for her braided hairstyle while white employees wearing their hair in braids, and showing scalp, did not suffer adverse actions. On December 23, 2008, the EEOC issued and mailed Ms. Vazquez a right to sue notice, which required that she file a lawsuit within 90 days of receipt.

“Minimal” Showing Needed to Rebut the 3-Day Mailing Rule

Ms. Vazquez filed her lawsuit pro se on April 6, 2009, 104 days after the date of the notice. In the subsequent court proceedings before the U.S. District Court for the Middle District of Pennsylvania, timely filing became an issue. Starwood argued that courts generally apply a rebuttable presumption in EEOC cases that a notice was mailed on the day it was issued, and that the recipient received the notice within 3 days of mailing. See Seitzinger v. Reading Hosp. & Med. Ctr., 165 F.3d 236, 239 (3d Cir. 1999) (“In the absence of other evidence, courts will presume that a plaintiff received her right-to-sue letter three days after the EEOC mailed it.”); see also DeTata v. Rollprint Packaging Prods., 632 F.3d 962, 968 (7th Cir. 2011); Payan v. Aramark Mgmt. Servs. L.P., 495 F.3d 1119, 1123 (9th Cir. 2007); Coleman v. Potomac Elec. Power Co., 310 F. Supp. 2d 154, 158 (D.D.C. 2004). Pursuant to this presumption, Starwood asserted that Ms. Vazquez received the notice on December 26, 2008, 3 days after the December 23, 2008 date listed on the notice. Her April 6, 2009 lawsuit was therefore filed after 101 days, not within 90 days as required by law, Starwood argued.

In rebutting the 3-day presumption, Ms. Vazquez testified that she repeatedly checked her P.O. Box up until January 1, 2009, when she went to visit family out of state. Only on January 6, 2009, when she returned from her trip, did she find the notice waiting in her box. She said that family members checking her P.O. Box while she was away also did not see a notice, although she could not specify when or how often they checked, leaving it unclear when exactly the notice arrived in the P.O. Box. Her lawsuit was timely, Ms. Vazquez argued, because she filed it within 90 days of her receipt of the notice on January 6, 2009.

The trial court, in an unpublished opinion by Judge Richard Caputo, placed the burden on Ms. Vazquez to demonstrate that letter had not arrived by January 5, the last day before Ms. Vazquez’s April 6 complaint would have been timely. The court found that Ms. Vazquez failed to rebut the 3-day presumption, and dismissed her case. Ms. Vazquez then appealed the decision to the Third Circuit.

On appeal, Judge Kent Jordan of the Third Circuit, writing for the panel, held that the burden the trial court placed on Ms. Vazquez was too onerous. Vazquez v. Caesar's Paradise Stream Resort, 524 Fed. Appx. 831, 834 (3d Cir. 2013). To overcome the presumption, proof need only be “minimal,” he wrote. Once minimal evidence of a greater than 3-day mailing period is presented, the presumption then shifts to the defendant to show the precise date of arrival, and that the plaintiff’s filing was untimely. The Third Circuit noted in footnote 2 that, because the letter was not delivered via certified mail (an EEOC practice for which courts have been critical, see Turner v. Dep't of Educ., 2011 U.S. Dist. LEXIS 46421, 17 (D. Haw. Apr. 28, 2011)), the only way of knowing when the letter arrived was when Ms. Vazquez claimed to have first seen the letter. Vazquez, 524 Fed. Appx. at 834. Ultimately, having found that Ms. Vazquez presented sufficient evidence to rebut the 3-day mailing presumption, the Third Circuit vacated the lower court’s dismissal and remanded the decision.

Disparate Treatment in Adverse Actions Against Those with Braided Hairstyles

On remand, the trial court evaluated the merits of the discrimination claim and issued its decision on December 3, 2013. Vazquez v. Caesar's Paradise Stream Resort, No. 09-cv-0625, 2013 U.S. Dist. LEXIS 170178, 30 (M.D. Pa. Dec. 3, 2013). Judge Caputo found that Ms. Vazquez had established a prima facie case of disparate treatment, as she demonstrated that she was a member of a protected class, suffered an adverse employment action, and that white employees with braids had not suffered such adverse actions. Judge Caputo also found that the employer’s proffered reason for the termination (wearing braids) was pretext, as white employees with braids showing scalp had not been fired, and the termination letter did not mention a violation of the visible scalp policy.

                Employer personal appearance policies, and employers’ enforcement of them, have been subject to litigation and have drawn scrutiny from a variety of commentators. See, e.g., Hollins v. Atlantic Co., Inc., 188 F.3d 652 (6th Cir. 1999) (denying summary judgment where a genuine issue of material fact existed as to whether the employer applied its personal appearance policy equally to black and white women); Graham v. CVS, Inc., No. 09-ca-6426-B (D.C. Super. Ct. 2010); Frank J. Cavico, et al., Appearance Discrimination, “Lookism” and “Lookphobia” in the Workplace, 28 J. App. Bus. Res. 791 (Sept./Oct. 2012); Beth Perry, National Poll Shows Public Opinion Sharply Divided on Regulating Appearance – From Weight to Tattos, Parker Poe Adams & Bernstein LLP, Mar. 22, 2005, http://www.parkerpoe.com/news/national-poll-shows-public-opinion-sharply-divided-on-regulating-appearance-from-weight-to-tattoos/; M. Lee Smith, From Beards to Body Piercing: Employers’ Appearance Standards Under Scrutiny, HR.com, October 26, 2001, http://www.hr.com/en/communities/labor_relations/from-beards-to-body-piercing-employers-appearance-_eacxh6oh.html; Spencer Silverglate & Heui Young Choi, Appearance Discrimination, Clarke Silverglate & Campbell, P.A., http://csclawfirm.com/index.php/csc/law/publications/appearance_discrimination (last visited Dec. 13, 2013). Univ. of Hawaii L. Sch., Appearance-based Discrimination, available at https://www.law.hawaii.edu/files/downloads/LAW/20589/Appearance/Discrimination_0.doc (last visited Dec. 13, 2013).  

In Ms. Vazquez’s case, the employer claimed that its personal appearance policy was race-neutral: it was not the cornrows themselves that were problematic, but Ms. Vazquez’s visible scalp beneath them. In some ways, however, it was this very claim of neutrality that cost the employer the case. Upon hearing it, the trial court evaluated evidence of Ms. Vazquez’s hairstyle the day of her termination, as well as evidence that white employees wore braids revealing their scalp, and did so without repercussions. This deeper inquiry led the court to conclude that the alleged reason for termination – violation of the no-visible-scalp policy – was pretext. The proffered legitimate reason for termination only sank the employer’s case further.  

Generous Damages Formulation

Once the trial court found Starwood liable for Title VII discrimination, the court went on to examine the damages to which Ms. Vazquez was entitled. The court initially stated that Ms. Vazquez was not entitled to front or back pay because she failed to present evidence to support these damage requests at the trial stage. The court went on to state, however, that 42 U.S.C. § 1981a (section 402 of Title VII) allows for compensatory damages for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.” 42 U.S.C. § 1981a(b)(3); see also Williams v. Pharmacia, Inc., 137 F.3d 944, 952 (7th Cir. 1998) (distinguishing front pay – the pay an employee would have received at an employer but-for her termination – from future pecuniary losses – the compensation to make up for “a lifetime of diminished earnings resulting from the reputational harms she suffered as a result of [the employer’s] discrimination”). The court found that Ms. Vazquez had established by a preponderance of the evidence that she suffered lost future earnings and inconvenience, as Starwood’s termination damaged her reputation by leaving her unemployed. Based on this formulation, the court awarded Ms. Vazquez $25,000 in compensatory damages.

The Vazquez case offers several gifts for plaintiffs’ employment attorneys. First, it provides a fact set that overcomes the 3-day mailing presumption scrupulously adhered to in EEO cases. See, e.g., DeTata, 632 F.3d at 968; Payan, 495 F.3d at 1123; Seitzinger, 165 F.3d at 239; Coleman, 310 F. Supp. 2d at 158. Second, it offers a framework for demonstrating that an employer’s proffered reason for termination – violation of a written personal appearance policy – was pretext, as the employer did not apply the policy equally to white employees. Third, the district court’s case, on remand, illustrates the variety of damages a court can award to a prevailing plaintiff even where that plaintiff fails to show evidence of back pay and front pay damages. A bright bauble of a case indeed. 


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No Nexus Required Between an Employee’s Requested Accommodation and the Ability of the Employee to Perform the Essential Functions of the Position

 

On September 16, 2013, the U.S. Court of Appeals for the Fifth Circuit reversed a lower court’s grant of summary judgment for the employer on the question of whether a nexus must exist between an employee’s request for accommodation and that employee’s ability to perform her essential job functions. The case, Feist v. Louisiana Department of Justice, 740 F.3d 450 (5th Cir. 2013), is a reminder to employers and disabled employees alike that reasonable accommodations can exist outside of those that permit the employee to perform her essential job functions. 

Pauline Feist was an assistant attorney general with the Louisiana Department of Justice. She suffered from osteoarthritis in her knee, which limited her ability to walk long distances. She requested, as an accommodation for her disability under the Americans with Disabilities Act (ADA), a free, reserved parking spot in front of her office building. Id. at 450. When her employer denied her request, she filed an ADA charge with the EEOC. She was later terminated for poor performance, and amended her charge to include retaliation for exercising her rights under the ADA. Id.

The district court granted summary judgment for the employer on both the discrimination and retaliation charges. See Feist v. Louisiana, No. 12-cv-31065 (E.D. La. 2012). The district court held that Ms. Feist could not demonstrate that the accommodation she requested was reasonable because she could not show that the parking situation at her office was limiting her ability to perform the essential functions of the job – namely, the sedentary office work attorneys normally perform. Ms. Feist appealed.

The Fifth Circuit, in an opinion by now-retired Judge Fortunato Benavides, looked to the ADA’s implementing regulations to determine the scope of a possible reasonable accommodation. The regulations allowed for three categories of reasonable accommodations, two of which did not reference performance of essential functions at all. Id. at 452; see 29 C.F.R. § 1630.2(o)(1) (defining a reasonable accommodation as “(i) Modifications or adjustments to a job application process that enable a qualified applicant with a disability to be considered for the position such qualified applicant desires; or … (iii) Modifications or adjustments that enable a covered entity’s employee with a disability to enjoy equal benefits and privileges of employment that are enjoyed by its other similarly situated employees without disabilities”). The Fifth Circuit also noted that EEOC guidance expressly allowed employers to provide reserved parking spaces as reasonable accommodations in certain circumstances. See Feist, 730 F.3d at 452.

The Fifth Circuit held that the district court erred in requiring a link between the reasonable accommodation and the employee’s performance of the essential functions of her job, as the ADA and its accompanying regulations did not require such a link. Id. On the discrimination claim, the court vacated and remanded the claim to the district court. The court then affirmed the grant of summary judgment on the retaliation claim, as Ms. Feist could not show that the employer’s non-retaliatory reasons for her termination were pretextual. Id. at 453.

The Fifth Circuit’s decision on the discrimination claim in Feist demonstrates both the variety of possible reasonable accommodations for employees and the tendency of some employers to narrow those possible accommodations further than what is allowed under the ADA. Advocates of employees should not waver in referencing the broad ADA regulations allowing for reasonable accommodations. 


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With Friends Like These...: Non-Solicitation Agreements and Social Media

By Robert Fitzpatrick & Justin Sacks

As social media further permeates our work culture, courts are in the difficult position of drawing lines between what constitutes an impermissible behavior online and what does not. In the context of non-solicitation agreements, two recent cases demonstrate the lines beginning to emerge, oftentimes with little clarity or justification, around online behavior related to the workplace.

I.                 Failure to Consider Social Media During Drafting Can Unintentionally Limit the Reach of Restrictive Covenants

In KNF&T Staffing v. Muller, No. 13-3676 (Mass. Super. Oct. 24, 2013) (available at: http://pdfserver.amlaw.com/nlj/MassSuperiorKNF&TvMullerPIOrder.pdf), the Massachusetts Superior Court ruled that a former employee’s update of her LinkedIn page was not a solicitation intended to compete with her former employer, with whom she had signed a non-competition agreement. Ms. Charlotte Muller worked for eight years at KNF&T Staffing in Boston, Massachusetts. She signed a non-compete agreement with KNF&T when she first started which prohibited her from “solicit[ing], recruit[ing], or hir[ing] away employees of the Company” or “enga[ging] in any activity involving personnel placement in the Company’s Fields of Placement” within one year of her departure from the company. Id. at *2. The agreement defined “Fields of Placement” as the specific staffing areas in which Muller worked, which were mainly administrative and secretarial staffing. Id. at *3.

Within a few months after leaving KNF&T on April 12, 2013, Muller joined a new staffing firm in Boston, working exclusively in IT-focused staffing. She also updated her LinkedIn profile, including in her “Skills & Expertise” section “Internet Recruiting” as well as other general areas such as “Staffing Services” and “Recruiting”. Id. Upon learning of this social media update and other activities, KNF&T filed a complaint as well as a motion for a temporary restraining order requiring defendant to abide by the terms of her non-compete agreement.  In its motion for a temporary restraining order, which the court treated as a request for a preliminary injunction, KNF&T argued that the LinkedIn update constituted solicitation in violation of the non-compete, contending that Muller was reaching out to potential clients of KNF&T through her LinkedIn profile. Superior Court Judge Thomas Billings strongly disagreed, stating that “Muller was not and is not prohibited from soliciting or accepting any potential client for recruitment of IT professionals, or anyone else in a field in which KNF&T does not recruit.” Id. at *7. Central to Judge Billings’s reasoning was that Muller’s LinkedIn profile listed staffing specialties that were either so general (“Staffing Services” and “Recruiting”) or so different (“Internet Recruiting”) that they did not fall under non-compete agreement’s “Fields of Placement.” Judge Billings denied KNF&T’s motion for a preliminary injunction, holding that there was “no evidence of a past or present violation of the non-compete agreement.” Id.

Similarly, in Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp., 951 N.E.2d 265 (Ct. App. Ind. 2011) (“ENS”), the plaintiff-contractor sued defendant-subcontractor to enforce a clause of the SubContractor Agreement which prohibited the parties from soliciting each other’s employees.  Plaintiff alleged that defendant had violated this agreement by posting an open sales representative position on its LinkedIn web portal, which led to one of plaintiff’s employees to apply for, and ultimately accept, the open position.  The Indiana Court of Appeals affirmed the trial court’s determination that defendant had not “solicited” plaintiff’s employee.  In so holding, the Court relied on several facts: 1) the terms “solicit” and “induce” were undefined and their ordinary dictionary definitions did not support plaintiff’s claim that the posting constituted a “solicitation” or “inducement”; 2) the employee made the initial contact with defendant; and 3) the employee initiated all conversations regarding the position. 

II.               Courts Look to Substance Over Form – Properly Drafted Non-Solicitation Agreements Can Reach “Passive” Solicitations

By contrast, in Amway Global v. Woodward, 744 F. Supp. 2d 657 (E.D. Mich 2010), the Eastern District of Michigan affirmed an arbitrator’s decision that untargeted blog and website postings had violated the non-solicitation agreement executed by defendant.  In Amway, plaintiff alleged that  defendant ‘s postings on various websites, including a blog entry in which defendant announced his decision to join a competing company because “[i]f you knew what I knew, you would do what I do” , constituted solicitation in violation of defendant’s contractual obligations.  Id. at 673.  In response, defendant argued that “passive, untargeted communications” could not, as a matter of law, constitute actionable solicitation.  In affirming the arbitration decision to the contrary, the Court opined that “common sense dictates that it is the substance of the message conveyed, and not the medium through which it is transmitted, that determines whether a communication qualifies as solicitation.”  Id. at 674.  In so holding, the Court noted that other courts to confront this issue had reached similar conclusions, most notably the Ninth Circuit in United States v. Pirello, 355 F.3d 728 (9th Cir. 2001), which rejected the dissent’s argument that “passive placement” of information on the internet could not qualify as solicitation because it did not entail “one-on-one importuning” and was not “directed at specific individuals.”  Pirello, 355 F.3d at 733 (Berzon, J., dissenting); See also Domino’s Pizza PMC v. Caribbean Rhino, Inc., 453 F. Supp. 2d 998 (E.D. Mich. 2006) (finding that activities including posts on internet websites to constitute prohibited solicitation); United States v. Zein, No. 09-20237, 2009 U.S. Dist. LEXIS 115814 at *2 (E.D. Mich. Dec. 11, 2009) (holding in a criminal matter that a Craigslist advertisement “certainly qualifies as a plan to solicit by the internet.”). 

The First Circuit had occasion to address solicitation in the context of electronic communications in the case of Corp. Technologies v. Harnett, No. 12-12385, 2013 U.S. Dist. LEXIS 63598, 35 I.E.R. Cas. (BNA) 863 (1st Cir. May 3, 2013).  In that case, Harnett had signed a non-compete and non-solicitation agreement with Corporate Technologies, and a decade later left the company and joined a competitor. Shortly after he joined the competitor, Harnett sent a blast email with an update on his new position to dozens of potential clients, of which approximately 40 percent were clients of Corporate Technologies. Id. at *4. Numerous Corporate Technologies clients replied to the email, and some completed sales with Harnett. Soon after, Corporate Technologies filed a motion for preliminary injunction against Harnett, arguing that Harnett violated the non-solicitation agreement through his email.

In the subsequent court filings, Harnett argued that it was the Corporate Technologies clients that had contacted and completed sales with him, and thus he had not solicited their business in violation of the agreement. The First Circuit disagreed, calling this attempt to shift the initial contact from Harnett to the clients a “linguistic trick.” Id. at *7. The court declined to create an initial contact test, stating instead that the party making the initial contact is “just one factor in drawing the line between solicitation and acceptance.” Id. at 10. Reasoning that Harnett’s blast email was a” targeted mailing” to customers of Corporate Technologies, the court held that Harnett violated the non-solicitation agreement and granted the Corporate Technologies’ motion for a preliminary injunction. Id. at 10. 

III.              Unexplored Boundaries

It is clear from the above that courts are still struggling to find a path through the ever-evolving thicket of means available to employees and businesses to promote themselves.  The underlying question in many of these cases appears to center around whether the court, under the particular facts of the case, inferred that defendant intended to solicit the recipients of his or her communications.  This can be well illustrated by comparing the facts of ENS with those in Harnett, both discussed above.  In ENS, a job opening was posted on a LinkedIn website, and as a result was transmitted to one (or more) of plaintiff’s employees in violation of defendant’s non-solicitation agreement, while in Harnett defendant transmitted an “e-mail blast” to potential clients, approximately 40 percent of whom defendant was prohibited from soliciting. 

Indeed, “intent” seems to have been the basis for the decision of the Eastern District of Oklahoma in Pre-Paid Legal Servs., Inc. v. Cahill, 924 F. Supp. 2d 1281 (E.D. Okla. 2013).  In Cahill plaintiff alleged that defendant’s practice of posting information to his Facebook account, which was viewable by plaintiff’s “friends”, including his former employees, constituted actionable solicitation.  The Court disagreed, explaining that “[t]here was no evidence that Defendant’s Facebook posts have resulted in the departure of a single [employee of plaintiff, nor was there any evidence that Defendant is targeting [plaintiff’s employees] by posting directly on their walls or through private messaging.   Id.; See also Jon Hyman, “Does Social Media Change the Meaning of ‘Solicitation?’”, Ohio Employer’s Law Blog (Feb. 25, 2013) (available at: http://www.ohioemployerlawblog.com/2013/02/does-social-media-change-definition.html). 

Of course, the question remains as to what level of contact, intentional or not, is needed to make out an actionable claim of solicitation.  Unfortunately, several cases which may have provided an answer to this question have settled without reaching the merits.  Nevertheless, these cases serve to illustrate the threat perceived by some employers in the growing use of social media.

In Graziano v. NESCO Serv. Co., No. 1:09-cv-2661, 2011 U.S. Dist. LEXIS 33497 (N.D. Ohio March 4, 2011), after being terminated by defendant, an employment staffing agency, plaintiff created an account on LinkedIn, and used that account to contact several former co-workers.  While the opinion is unclear, it appears that plaintiff did little more than request a “link” with his former colleagues.  In response, defendant notified plaintiff that he should “cease all use of the LinkedIn website”, as such conduct allegedly violated the terms of the non-solicit clause contained in plaintiff’s severance agreement.  When plaintiff refused to comply, defendant ceased the severance payments provided for in the severance agreement.  The case settled before a determination could be made as to whether Graziano’s conduct constituted a violation of his non-solicitation obligations.  See also Erik B. von Zeipel, “When Does LinkedIn Activity Violate Non-Solicitation Agreements?”, Trading Secrets (Nov. 4, 2013) (available at: http://www.tradesecretslaw.com/2013/11/articles/trade-secrets/when-does-linkedin-activity-violate-non-solicitation-agreements/).

Similarly, in TEKsystems, Inc. v. Hammernick, No. 0:10-cv-00819 (D. Minn. March 16, 2010) (Complaint) (available at: http://op.bna.com/pen.nsf/id/jmer-86fq5g/$File/linkedin-hammernick.pdf) (accessed Dec. 13, 2013).  In TEKsystems, the plaintiff alleged that defendant had violated his non-solicitation  obligations by “connecting” with contacts through social media websites.  In the non-solicitation agreement defendant had agreed not to, whether directly or indirectly, “[a]pproach, contact, solicit, or induce any individual” to perform certain prohibited acts.  Id. at par. 27(B).  While other contacts were alleged by plaintiff, the focus of its complaint is on the fact that defendant had “connected” with at least sixteen of its employees through LinkedIn.   This case also settled before a determination could be made as to whether defendant’s conduct constituted a violation of his non-solicitation obligations.  See Zeipel at http://www.tradesecretslaw.com/2013/11/articles/trade-secrets/when-does-linkedin-activity-violate-non-solicitation-agreements/. 

IV.              Going Forward

In response to these court decisions, there are several steps practitioners for both employers and employees might take in advising their clients.

1.      Employers should advise his or her client to address social media within the terms of the restrictive covenant to be certain that even “passive” solicitation falls within the terms of the covenant.  As with any other restrictive covenant, the terms should be narrowly drawn to protect the employer’s legitimate business interests.  

2.      Employees should be advised of the potential dangers inherent in their use of social media websites.  Where possible, Employees should negotiate specific carve outs to allow reasonable use of social media to obtain non-competitive employment even if that use entails incidental contact with employees or customers of the former Employer.

 


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