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Third Circuit Rules in Favor of Employer Who Monitored Former Employees’ Social Media Accounts

On February 25, 2019, the Third Circuit held that a New Jersey engineering firm that monitored its former employees’ social media accounts was not barred from winning an injunction to prevent four former employees from soliciting firm clients and destroying company information.

In this case, several employees left the engineering firm to start two competing businesses. While still employed with the firm, the employees discussed over social media the possibility of starting a competing venture, and transmitted firm documents and other relevant information outside the firm’s network. After the mass resignation, and loss of a key firm client, the firm’s network administrator was instructed to examine the former employees’ work computers. During this time the administrator allegedly, inter alia, reviewed browser history (including deleted activity), accessed personal social media accounts via passwords saved on the computers and installed software allowing him to monitor social media activity without detection.

The third circuit, in a split three-judge panel opinion, upheld the district court’s July decision, holding that the firm’s monitoring activity did not constitute “inequitable conduct” under the “unclean hands doctrine” to bar the firm from winning its request for injunction. The unclean hands doctrine “applies when a party seeking relief has committed an unconscionable act immediately related to the equity the party seeks in respect to the litigation.” That said, the court emphasized that even if the firm’s monitoring activity did constitute an “unconscionable act”, the conduct was not related to the claim upon which equitable relief was sought. In other words, the court’s decision was not based on whether the firm’s monitoring activity was in fact “unconscionable”, but rather whether it related to their injunction request, leaving the door open for such conduct to be considered “unconscionable” under different circumstances.

Although not mentioned in the opinion, New Jersey has a social media access law that generally prohibits employers from requesting or requiring a current or prospective employee to provide or disclose any user name or password, or in any way provide the employer access to, a personal account. That said, the law includes an exception permitting employers to conduct investigations regarding: work-related employee misconduct based on information about activity on social media; or an employee’s actions based on information about the unauthorized transfer of an employer’s proprietary, confidential, or financial information to social media. Also not mentioned in the opinion, cases under similar circumstances often invoke federal Stored Communications Act (“SCA”) violations. For example, in Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, a New York district court ruled in a non-compete action that accessing former employees’ accounts violated the SCA.

There are many reasons companies monitor employees, including boosting productivity, dissuading cyber-slacking or social “not-working,” protecting trade secrets and confidential business information, preventing theft, avoiding data breaches, avoiding wrongful termination lawsuits, ensuring that employees are not improperly snooping themselves, complying with electronic discovery requirements, and generally dissuading improper behavior.

Excessive, clumsy, or improper employee monitoring, however, can cause significant morale problems and, worse, create potentially legal liability for invasion of privacy under statutory and common law.   Companies should review policies and applicable state and federal law, and tread carefully before embarking on a monitoring program and remember to monitor the monitors.

Jackson Lewis P.C. © 2019

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About this Author

Principal

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently helps to co-lead the firm's Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals.

In short, his practice focuses on the matrix of laws governing the privacy, security and management of data, as well as the impact and regulation of social media. He also...

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Jason C. Gavejian, Employment Attorney, Jackson Lewis, Principal, Restrictive Covenants Lawyer
Principal

Jason C. Gavejian is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. and a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

Mr. Gavejian represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination and wage and hour claims in both federal and state courts. Additionally, Mr. Gavejian regularly appears before administrative agencies, including the Equal Employment Opportunity Commission, the Office for Civil Rights (OCR), the New Jersey Division of Civil Rights, and the New Jersey Department of Labor. His practice also focuses on advice/counseling employers regarding daily workplace issues.

Mr. Gavejian represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. Mr. Gavejian negotiates vendor agreements and other data privacy and security agreements, including business associate agreements. His work in the area of privacy and data security includes counseling and coaching clients through the process of investigating and responding to breaches of the personally identifiable information (PII) or protected health information (PHI) they maintain about consumers, customers, employees, patients, and others, while also assisting clients in implementing policies, practices, and procedures to prevent future data incidents.

Mr. Gavejian’s litigation experience, coupled with his privacy practice, provides him with a unique view of many workplace issues and the impact privacy, data security, and social media may play in actual or threatened lawsuits.

Mr. Gavejian regularly provides training to both executives and employees and regularly speaks on current privacy, data security, monitoring, recording, BYOD/COPE, biometrics (BIPA), social media, TCPA, and information management issues. His views on these topics have been discussed in multiple publications, including the Washington Post, Chicago Tribune, San Francisco Chronicle (SFGATE), National Law Review, Bloomberg BNA, Inc.com, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and HR.BLR.com.

Mr. Gavejian is the Co-Chair of Jackson Lewis’ Hispanic Attorney Resource Group, a group committed to increasing the firm’s visibility among Hispanic-American and other minority attorneys, as well as mentoring the firm's attorneys to assist in their training and development. Mr. Gavejian also previously served on the National Leadership Committee of the Hispanic National Bar Association (HNBA) and regularly volunteers his time for pro bono matters.

Prior to joining Jackson Lewis, Mr. Gavejian served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.

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Attorney

Maya Atrakchi is the Knowledge Management (“KM”) Attorney for Jackson Lewis P.C.’s Privacy, e-Communication and Data Security and International Employment Issues Practice Groups, and is based in the New York City, New York, office of Jackson Lewis P.C.

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