Smooth Transitions : Rob Radcliff : Texas Non-Compete Lawyer & Attorney : Langley Weinstein LLP Law Firm : Dallas Employment & Employee Departures : Smooth Transitions Law Blog

 

It's a little disturbing to think that your smart phone is secretly tracking your whereabouts and hiding the information in some discrete place only a computer scientist can find.  That appears to be what the iPhone is doing.  According to the Wall Street Journal, even turning off the tracking features of an iPhone does not work:

The Journal disabled location services (which are on by default) and immediately recorded the data that had initially been gathered by the phone. The Journal then carried the phone to new locations and observed the data. Over the span of several hours as the phone was moved, it continued to collect location data from new places.

These data included coordinates and time stamps; however, the coordinates were not from the exact locations that the phone traveled, and some of them were several miles away. The phone also didn't indicate how much time was spent in a given location. Other technology watchers on blogs and message boards online have recorded similar findings.

What are the repercussions of this type of data?  Lawyers are historians of sort, in that they are constantly trying to determine the facts leading up to certain key events.  Inevitably, there are facts that are disputed and there is contradicting testimony.  So, we then look to objective evidence of what actually occurred - calendars, emails, etc.  What better evidence then a phone that has documented where a person has been? 

Though it may not be entirely accurate (as described above) it could certainly provide some evidence and help to reconstruct the time line of events.  It will be interesting to see how Apple handles this issue and I wouldn't be surprised if other devices were doing the same thing.   Nevertheless, get ready for discovery requests that seek that secret file buried in the iPhone that locks down your movements.  Is Big Brother watching you?

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A few social media signs that an employee is leaving:

1. The Obvious -  A Linked-In or Facebook profile update that includes the name of a person's new employer;
2. The Obvious - An actual description of the new employer or business in a social media profile;
3. The Obvious - A status update where the employee announces their departure;
4. The Obvious - A posted link to the new business or venture;
5. The Obvious - Outright solicitations from the former employee to the employer's customers;
6. The Obvious - General solicitations for business or leads;
7. Subtle - A request for a reference for a website designer or IT help;
8. Subtle - A request for a reference for someone to put together business cards, stationary, etc. - basically anything someone would need to start up a business;
9. Subtle - A request for legal advice regarding business entities (the new business will need a corporate form; and
10. Though not a necessarily social media related, a request from the employee for their employment contract. 

The interesting byproduct of social media sites is that many employees now maintain their business contacts on line.  A departing employee will alert their contacts that they are leaving.  The question then becomes what can or will the employer do to keep their clients/customers?

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Daniel Schwartz's latest entry on social media discovery illustrates how easy it is for parties in a lawsuit to obtain someone's Facebook records:

No longer are companies required to spent countless hours subpoenaing Facebook for the records of the terminated employee who is suing you. Just ask for the Plaintiff to download all of his or her information and then move to compel if he or she doesn't.

Facebook now includes a feature that allows a user to obtain and print out all of their historical Facebook activity.  The reason this is important is because discovery in many instances is limited by cost and a court's hesitancy to allow parties in a lawsuit to conduct fishing expeditions.  Now both the cost and burden of obtaining this information is minimal.  Of course, whether the requesting party is on a fishing expedition will remain an issue.

Other social networking sites allow for some historical information.  For instance, Twitter allows individuals in most instances to see a person's previous entries.  The point of this is most of these sites may follow the lead of Facebook and make this type of information easily obtainable.

In the context of non-compete and trade secret cases, Plaintiffs are always trying to reconstruct the departure of the employee.  Did the employee print out customer information or trade secrets at midnight the night before they resigned?  Or did they simply dump the information onto a zip drive for future use?  Any circumstantial evidence that an employer can develop is helpful in reconstructing the time line - social media may have that information or evidence.

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Another strategy employers use to prevent employees from walking away with customers, proprietary information, and trade secrets, is the use of a “garden leave” provision in the  employment agreement. Basically, the provision works like this: the employee agrees that they have to provide three weeks notice of their intent to go and work for a new employer. Most clauses then allow for the employee to essentially quit working, but remain on the payroll of the employer during this “transition period.”

The effect of this provision is to prevent the overnight departure of business and proprietary information.  If followed by the employee, the employer can contact clients and address the situation.  Breach of such a provision could in some instances serve as an additional basis for a temporary restraining order.

Garden Leave provisions coupled with non-solicitation agreements, non-compete agreements and anti-raid provisions can be effective. These types of  provisions are appearing more often in the broker/securities business and trace their origins to Europe where they are commonly used. Employers should confirm that any provision is enforceable under applicable state law. Similarly, employees should be very careful before they sign any type of agreement along these lines.
 

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This is the second edition  of the world of non-competes. As usual, a number of new industries appear to be using non-competes:

Roofers

Lauren Ellerman has an interesting discussion on her blog about roofers and whether non-competes in the roofing industry are enforceable. Her point that lawsuits aren’t easily squashed is well taken.

The Massachusetts Hairdresser

A Superior Court judge in Massachusetts ruled that a hair salon was entitled to a preliminary injunction that prevents a former employee/hairdresser from competing in the same area for one year and using client name and contact information. 

Business Supply Salesperson

You know the individual that comes around the office to stock up with all the necessary office supplies? In this case in Harris County, Texas (Houston) a company similar to that sued its former employee over a non-compete. 

The Detroit Radiator Salesman

This salesman was employed for 10 months and was fired because things were not working out.  He signed a two year non-compete.  Below is the employee's take on the situation:

That's what they're telling me, that I have like trade secrets in my head or something.  I don't understand how though.

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