You have likely heard by now of the recent issue with Jimmy Johns sandwich shops, and their desire to have their minimum wage employees sign non-competes (as well as managers, etc.).

Normally, specialty food stores have employees sign confidentiality agreements, that may say (paraphrasing of course) “hey employee, don’t go share our secret sauce recipe when you leave. It’s important to us and you agree not to share it!” But this chain, has decided to take it one step further and prohibit said sandwich makers, from leaving and going to work at another sandwich shop.

Hmm..

Do you really think a part time minimum wage employee can cause financial harm to a huge national chain, by going to make sandwiches at another huge national chain? I don’t. So while I think these provisions are likely unenforceable under Virginia law and it is unlikely the company could ever prove damages, for once, people are standing up for the employee and saying the issue of enforceability is NOT THE POINT.

THE POINT IS, why even ask an employee, or require an employee to sign such a ridiculous contract?

And while I never mind getting back on my soap box, that has been my exact point for years.

While it is great our courts will evaluate these on a case by case basis, and eventually throw out the bad ones – that costs money and takes time. Shouldn’t our law makers be willing to create a few rules that prevents this kind of judicial waste and burden on employees?

Apparently – some folks in Washington Agree.

But really what my friends in DC do is of little matter on this issue. It’s a state law issue and as such I need my friends in Richmond to care enough about workers in the Commonwealth, business growth and development, and the future economic impact on our state to take notice.

So- Richmond, you are hereby on notice. You should start paying attention. Not all contracts are fair. Not all contracts are just. Not all contracts should be allowed under Virginia law.

And Jimmy Johns, I won’t be buying your sandwiches anytime soon… Secret sauce or not.

 

 

Dear Virginia employee:

Whether you signed an employment agreement or not, you owe various legal duties to your employer.

Nope, its true.

And two of these unspoken duties, are that you will not interfere with your employer’s contracts or business expectancies.

So what does that practically mean?

Under Virginia common law, if an employer can prove:  (a) it had a contract/business expectancy; (b) an employee had knowledge of that expectancy; (c) employee intentionally interfered with its business expectancy (d) through improper means or methods; and (e) your former employer was damaged as a result, then the employee might be facing a suit for tortious interference of contract or business expectancy. [1]

Examples of breach:

  1. Starting competing business and called old clients with the intent to get them to stop doing business with old company 
  2. Telling customers you are going to leave (while you are employed) and ask them to go with you and breach contract with old company.

 Why does this happen?

  • Employees assume the customers are theirs.
  • No non-compete so employees assume this is allowed.
  • Employee has given notice and thinks that changes things.
  • People tell customers before employers they are leaving.

 Burden of proof:

Employer must prove all of the above elements under Virginia law, including improper methods.

 Courts however have evolved on their understanding of the term: Methods considered “improper” include those that are illegal or independently tortious. Obviously, the requisite improper methods must have occurred prior to the termination of the contract in order to constitute the cause of the termination.[2]

Damages:       Again, must prove actual damages.

 NEW EMERGING TORT OF HIRING EMPLOYEE WITH A NON-COMPETE, ASKING THEM TO COMPETE IN BREACH — deemed tort. interference

However, if Company B hires one of Company A’s former employees and obtains and uses Company A’s “inside or confidential information,” or otherwise engages in “unfair competition,” such acts constitute “improper methods or means” and thus support a claim for tortious interference with Company A’s terminable at will…[3]

So, the more you know, hopefully, the less likely you are to breach your duty… or at the very least, get sued.



[1] Maximus, Inc. v. Lockheed Information Management System, Co., 254 Va. 408 (1997); Glass v. Glass, 228 Va. 39, 321 S.E. 2d 69, 77 (1984).

[2] See Hilb, Rogal and Hamilton Company v. DePew, 247 Va. 240, 246 n.4 (1994).

[3] Depuy Synthes Sales, Inc. v. Jones, 2014 U.S. Dist. LEXIS 37727, 13-14 (E.D. Va. Mar. 21, 2014) Note 2.

 

“Hey, congratulations on making partner,” someone says to me in the gym.

I wonder how on earth they know that and then I realize they probably got an email from LinkedIn notifying them of my promotion (albeit 6 months after the fact because I didn’t rush to change the title).

As most of us in the business world know, LinkedIn provides push notifications to your connections that may include your new contact information, job title, etc.

And for those of us who handle business litigation cases, we are seeing social medial (LinkedIn included) being used as evidence in cases where companies are alleging their ex-employees have breached their contracts, non-solicitations, violated fiduciary duties of loyalty, interfered with business expectancies etc.

The Courts are even being asked to determine if a LinkedIn push notification that says CONGRATULATE FRED ON HIS NEW JOB AS SALES MANAGER OF VIRGINIA WIDGETS LLC is a solicitation of past costumers in violation of a contract.

Thankfully, a client recently shared with me a little known (maybe not to the rest of the world but it was news to me) secret that you can stop LinkedIn from making these email announcements on your behalf.

HERE IS HOW:

  • 1.  Once signed in, click on your picture in the top right to go to “Account & Settings”, then select Review under “Privacy & Settings”.
  •  2.  Under Privacy Controls click on “Turn on/off your activity broadcasts”
  •  3.  In the resulting dialog box, *uncheck* the box.  This will mean that activity updates aren’t automatically sent out.  Of course, if folks navigate to your profile, they can see what has changed.

So, in light of this great development, my standard advice to employees leaving one job for another will change.

I advise folks to get the permission of company 1 (your old employer) to update your LinkedIn profile to include your new contact information once you leave. If they agree, great. If not, and you do it, it could be alleged such amendment is a solicitation and in violation of your contract. Further, it could be alleged your LinkedIn contacts are not your property, but the confidential and protected information of your old company. So permission is always better than forgiveness.

Now, I am going to advise clients to discuss LinkedIn when they leave, AND maybe turn off the push notifications. No, you won’t be hiding your new employment (because hiding things and being less than truthful leads to litigation) simply broadcasting it to a much smaller audience and not “soliciting” folks to follow your new job.

Of course, each situation is different and when you call our office, our legal advice is tailored to your situation, contract etc. This blog is not intended to be legal advice. Just a conversation. To continue the conversation or learn how you can try to avoid getting sued, call for more information at 540-985-0098.

Lauren