Promoting a new business on Facebook could violate a non-competition agreement. Who knew?

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Actually, pretty much everyone.That includes, most importantly, the relevant portion of the three-judge Pennsylvania Superior Court panel in this recent opinion.

The case, Joseph v. O’Laughlin, doesn’t involve an employment relationship. Rather, the plaintiff and defendant entered into an asset purchase agreement, which included a covenant not to compete. Among other things, after the parties entered into the agreement, the seller-defendant “formed a limited liability company (O’Laughlin Veterinary Services), created a Facebook page of the same name, and purchased equipment. The Facebook page included a link that advised followers that the clinic was, ‘coming soon,’ and when activated, the link directed users to the business’s location on a map.”

The defendant argued that actions like setting up a Facebook page were merely “preparatory” and do not evince actual present competition, which would violate the restrictive covenant.

The court disagreed:

Upon review of that document, it is obvious that, collectively, the [Facebook] posts, “coming soon” announcement, and map directions, are tantamount to a solicitation of past or future clients in contravention of the non-compete clause. The resounding purpose of the Facebook page, and the attendant communications therein, was to inform the followers of the page, including former clients, that he intended to open a new clinic and to keep them apprised of his progress. There is but one reason for O’Laughlin to create the O’Laughlin Veterinary Services Facebook page and maintain contact with former clients: to solicit their business

Although the court may have conflated non-competition with non-solicitation, it can be difficult to draw the line between these concepts. That’s especially true where, as here, the seller has taken other steps to compete with the buyer.

So, when a former employee with a non-competition agreement takes to social media to announce that he or she is planning to form a competing business, that’s a pretty good sign that it’s time to engage an employment lawyer to enforce your restrictive covenant.

Hey, I’m an employment lawyer!

 

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