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

There have been numerous discussions here regarding individuals chronicling their daily lives through the use of Facebook, Twitter, blogs and other social media. We can provide location information through foursquare or talk about our job through a Facebook status update or Twitter tweet. The possibilities are endless and lawyers are beginning to focus on social media outlets in the discovery process.  

In a recent post by 3 Geeks and a Law Blog, the authors examine a defense attorney’s request for social media information related to a personal injury plaintiff.  Specifically, the Court addressed whether the defendant was entitled to the current and historical Facebook and MySpace pages of the plaintiff.  The defendant claimed it has reason to believe the plaintiff had posted pictures and information clearly demonstrating he was not suffering injuries or a loss of enjoyment of life – a claim in the lawsuit.

The Court agreed and ordered that the plaintiff provide a properly executed consent that would allow for obtaining Facebook and MySpace information. The discovery requests were narrowly tailored and sought information specifically related to the plaintiff’s alleged damages. It was not a fishing expedition.  What if the defense attorney wants more general information?  She could use Twitter or Facebook entries basically to recreate a time line of events for various plaintiffs and defendants in cases.  The same goes with other information offered in social media outlets, like blogs, foursquare, and LinkedIn.  It will be interesting to see how Courts handle these type of discovery issues.   A rule of thumb - assume everything posted or authored on these sites is discoverable.

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In a previous entry I addressed the Fifth Circuit Court of Appeals'  recent ruling making arbitration awards virtually impossible to appeal in Citigroup Global Markets Inc. v. Bacon. 

A few weeks later, the U.S. Supreme Court upheld an arbitration agreement that required employees who were parties to a collective bargaining agreement to arbitrate their age discrimination claims.  Michael Moore's discussion of the opinion in the Pennsylvania Labor and Employment Blog is worth a look on this decision.

So, it's a no brainer, arbitration is the way to go for all employment claims, right?  Not so fast.  Jon Hyman of the Ohio Employer's Law Blog offers a dissent.  Jon cites the escalating costs associated with arbitration as a reason to reconsider the process:

In my experience, however, arbitration can prove just as costly as court. More and more arbitrators are allowing plaintiffs to engage in discovery that is nearly as expansive (and expensive) as what is permitted by trial courts. Additionally, employers have to add into the equation the cost to file the claim, which the employer usually shares. With the American Arbitration Association, these fees can run anywhere from $950 to a cap of $65,000. These fees do not include the arbitrators’ time, which often exceeds $500 per hour, and includes all pre-hearing conferences, discovery and motion practice, the actual hearing time, and the drafting of the opinion. It is not hard to see how in many cases the defense costs associated with arbitration outweigh defense costs in a traditional court proceeding.

He goes on to suggest considering using  jury trial waivers in employment agreements.  Though waivers won't keep pre-trial and discovery costs down, they will make trial cheaper and avoid a runaway jury.  Having a judge as the finder-of-fact usually makes things more predictable.  Of course, make sure the jury trial waiver is enforceable in the jurisdiction where it is going to be used.

 I recently spoke with an employment arbitrator who told me he gives the parties wide latitude on the amount of discovery in arbitrations as long at there is agreement.  His ultimate concern is not so much the amount of discovery, but the length of the case.  He aims to resolve all cases within 6 - 9 months.  The less time lawyers have to work on the case, the less fees incurred.

As an aside, the Texas Legislature is considering legislation to limit arbitration in certain consumer transactions.

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I liked Jay Shepherds' remarks in Eight Ways to Lose a Non-Compete Case blog entry.    Here they are with my thoughts in italics:

• Putting too much faith in the belief that the court will enforce the language of the non-compete agreement as written.
• Trying to enforce a non-compete against employees who really don't possess any confidential information or customer relationships.   Does the employee really have trade secrets?
• Drafting the non-compete too broadly.
• Focusing only on geography, duration, and scope of the non-compete rather than on the existence of protectable interests. 
• Waiting too long to file.
• Asking for an injunction before you've developed enough evidence. Texas permits TROs and a party can secure limited discovery for the injunction hearing.
• Filing in the wrong jurisdiction. If you want to enforce a non-compete file in the jurisdiction where the former employee is based or working.
• Focusing on the law instead of on the story of the case.

I agree with most of the eight but here is what I would add:

1. Know the law from state to state, the enforceability of a non-compete in Texas is quite different from California;
2. Make sure the state law you want will control.  Along the same lines, if your non-compete specifies Texas law and the employee is in California, make sure the choice-of-law provision will stick;
3. Don't wait to file.  Sometimes you may have to file a lawsuit and seek an injunction before you have all the evidence - but filing early can protect your business and possibly make your former employee think twice about violating the non-compete.
4. Contact your clients.  Just because your company's contact person with the client has departed doesn't mean the business will go.  Call your clients and be up front with what has occurred and how valuable their business is to your company.
5. Marshall your evidence.  Odds are your departing employee began preparing to compete before they left your company.  See if they left a papertrail.  (email, phone calls, accessing company databases, and printing out company information)
6. Remember your targets.  Not only the employee who left, but the company they left for or formed.

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