Court-ordered social media disclosure

  • United States
  • 10/16/2018
  • Northon Rose Fulbright

On August 30, 2018, a federal trial court in Texas ordered a defendant to include a disclaimer on certain social media posts as part of a preliminary injunction in a private litigation. (WorldVentures Marketing, LLC v. Rogers, 4:18-cv-00498 (E.D. Tex. Aug. 30, 2018) (2018 WL 4169049)).

The facts
The case involved WorldVentures Marketing, a multilevel marketing direct sales company that markets and sells “lifestyle membership products and services.” The defendant was a sales representative for WorldVentures from 2005 through July of 2018. He left to join a direct competitor and began recruiting both customers and employees for his new employer.

WorldVentures promptly sued in federal court, claiming violations of the Lanham Act, the Defend Trade Secrets Act, the Texas Uniform Trade Secrets Act, and breach of contract, tortious interference with contractual relationship with WorldVentures employees, and unfair competition.

The court granted a temporary restraining order (TRO), but the defendant continued recruiting via social media, including use of public posts encouraging people to join his new company, and referring to his recruiting effort as “Team #TRO .” WorldVentures moved for a preliminary injunction.

The contract and tortious interference claims
Social media figured in WorldVentures’ breach of contract and tortious interference claims. With respect to the breach of contract claim, WorldVentures showed that the defendant had signed and “clicked through” agreements that prohibited him from soliciting current employees. The court found that defendant’s “Team #TRO” comments to be a “flagrant violation of the TRO” that demonstrated not only his “disregard for the Court and its authority, but further, that an injunction is needed.”

The defendant’s social media recruiting efforts also supported WorldVentures’ tortious interference with contract claim. The court found that the recruiting posts “intentionally induced other Representatives to breach their contracts with WorldVentures . . . in violation of the non-competition agreement with WorldVentures.” The court found that the defendant had “vigorously promoted” his relationship with the competitor on social media “including to friends and social media followers who are WorldVentures Representatives.”

The preliminary injunction
The court granted WorldVentures’ motion for a preliminary injunction and issued a detailed restraining order. In Section 3 of the order, the court ordered the defendant to include the following disclaimer in any

communications via social media for any solicitation or recruitment for any multilevel marketing or network marketing business opportunity, such communication shall include as disclaimer with the following wording: “I am not permitted to solicit or recruit WorldVentures Representatives, or any person who has been a WorldVentures Representative during the last twelve (12) months, other than those I personally enrolled.” These disclaimers shall be conspicuous and obvious to the average consumer reading the communication.

Takeaways
Many companies have a social media policy, but is yours integrated with (or at least consistent with) other company policies, such as non-solicitation? Does it cover any post-employment activity, including use of confidential information? Keep in mind that some social media sites state that the user owns any of their own content, so be sure that your policy is not overbroad.