LITIGATION UPDATES – DECEMBER 2014
LinkedIn Statuses and Non-Solicitation Agreements
A Connecticut company brought suit against a former employee alleging violations of a non-compete agreement.¬† The non-compete agreement lacked a provision about sharing on social media, which allowed the former employee to use LinkedIn to announce to all of his connections, including the company‚Äôs clients, that he was joining a competitor. ¬†Even though the former employee could not directly solicit the company‚Äôs clients, the lack of a provision about social media led the judge to determine that the company did not have a good faith basis for the lawsuit, because the facts did not support its claims, and the LinkedIn announcement was allowed.
This case has implications in California.¬† All companies need to analyze the details when drafting non-compete agreements and protecting trade secrets. Here, the gaps in protection allowed a former employee to act in ways that the company did not intend to allow, but the company‚Äôs hands were tied in litigation.¬†
Red Bull Drops Famous Slogan
The once popular Red Bull slogan, ‚ÄúRed Bull gives you wings,‚ÄĚ is now no more. ¬†Red Bull was sued for false and deceptive advertising over its use of the slogan and its advertising campaign. ¬†The lawsuit, brought as a class action, alleged that Red Bull‚Äôs campaign promised consumers they would experience increased performance, concentration and reaction speed. ¬†The proponents of the lawsuit claimed, however, that Red Bull offers little more than a traditional soda. ¬†Red Bull decided to settle the lawsuit and offer refunds to Red Bull customers rather than proceed with litigation. ¬†It has agreed to pay out a maximum of $13 million in claims, at a maximum of $10 per claim.¬† The settlement says customers who purchased a Red Bull drink between 2002 and Oct. 3, 2014, are owed $10 cash or $15 in Red Bull products.
A recent ruling by a federal court in Washington in Genex Cooperative, Inc. v. Contreras reminds businesses to not be so over-reaching with their agreements. ¬†In Genex, three individuals who were employed to inseminate cows quit and went to a competitor. ¬†They had signed non-compete agreements that were struck down by the court as unenforceable. ¬†Inseminating cows, it seems, was not such a special skill so as to warrant a non-compete agreement.