If salespeople connect with their business contacts on LinkedIn or another social media site, can they take that information with them when they leave the company? Maybe not, according to a federal court in California.
Employees who wish to start their own businesses are often faced with difficult questions. Can I take my customer list with me? Can I contact customers of my former employer? We have received many inquiries on these questions through our websites, pcghlawyers.com and hammers-law.com, both from employers and employees.
David Oakes worked for six years as a salesman for a cell phone accessories company. He had signed an agreement saying that he wouldn’t disclose any proprietary information, including the company’s customer base. When the company terminated him, he started a competing business. His old company then sued, claiming, among other things, that he had maintained his LinkedIn contact list after he was terminated.
Oakes asked the court to throw the suit out, arguing that contacts on LinkedIn are not a “trade secret.”
But the court said a jury should decide the question. Among other things, the jury will have to consider (1) whether the contact list was built up as a result of the company’s business efforts, as opposed to simply being generated by LinkedIn’s “People You May Know” algorithm, and (2) whether Oakes “disclosed” the information by making his contact list accessible to others.
If you have questions about your right to limit employees from taking customer lists, or if you are an employee wishing to start a business, contact a lawyer.
Stephen Hammers, Price, Crooke, Gary & Hammers, Incorporated, 10 Corporate Park, Suite 300, Irvine, California 92606,(949) 573-4910; (800) 511-6058; www.hammers-law.com
Need legal assistance? Call: (949) 573-4910
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