How Your Employees’ Social Media Contacts Could be Protectable Trade Secrets

The question of whether an employee’s LinkedIn contacts can be considered trade secrets belonging to a former employer is a question currently before a Central California district court.

In Cellular Accessories For Less, Inc. v. Trinitas, LLC, defendant David Oakes was a sales account manager for Cellular Accessories for Less, Inc., a company that sells mobile phone accessories to businesses. As a Cellular Accessories employee, Oakes signed an employment agreement stating that proprietary company information, including customer lists, remains the property of Cellular Accessories and forbade the disclosure or use of that information without prior consent.

Cellular Accessories terminated Oakes’ employment in 2010; Oakes then started a competing business, Trinitas, LLC. Cellular filed suit against Oakes and Trinitas alleging copyright, contract and tort claims, and that Oakes pilfered its trade secrets when he emailed himself a list of Cellular Accessories customers and contact information for Cellular Accessories’ purchasing agents.

While it has been established by many courts that a customer list may constitute a protectable trade secret, the question of whether a former employee’s maintenance of social media contacts constitutes misappropriation of trade secrets is a relatively new question before the court. This case merits attention since social media networking is used extensively by companies for business development.

To protect trade secret rights, employers should:

  • Institute clear rules and educate employees on the proprietary and confidential nature of customer information on social media networks.
  • Require employees who maintain a social media account for business purposes to keep that account totally separate from any personal social media accounts.
  • Ensure that an employee’s business social media accounts are inaccessible once employment is terminated.
  • Review and update employment, non-disclosure and non-compete agreements as well as company social media policies with terms and conditions regarding trade secrets.
  • Maintain customer lists on an internal database that is password-protected instead of relying on social media accounts for customer information.
  • Track time and money spent by the company to develop its customer lists.

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