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’s clients, that he was joining a competitor. Even though the former employee could not directly solicit the company’s 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’s hands were tied in litigation.
Red Bull Drops Famous Slogan
The once popular Red Bull slogan, “Red Bull gives you wings,” 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’s 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.