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A Litigator’s Perspective on Trade Secret Protection Programs: How to Protect Your Valuable Information Against Rogue Employees

Mark E. Terman, a partner in the Los Angeles office and a member of the Competitive Advantage practice team, authoried the article “A Litigator’s Perspective on Trade Secret Protection Programs: How to Protect Your Valuable Information Against Rogue Employees,” which was recently published on InsideCounsel.com. Mark’s article discusses the Uniform Trade Secrets Act and its variations, as well as questions companies should consider when developing their own trade secret program. Mark also emphasizes that companies should have a program to deter and limit trade secret misappropriation. “A seeming axiom of trade secret and unfair competition litigation is that the more brazen and dishonest the behavior of the former employee (and perhaps their new employer), the more accommodating a court may be to a company whose proof is less than perfect. By contrast, the thinner a company plaintiff’s proof is, the more a court may accept a former employee’s argument that there is nothing secret, nor valuable in the assets even if their theft can be proven” he says.

To read the entire article click here.

California Joins Other States in Implementing Laws Governing Employer Access to Employee’s and Applicant’s Social Media Accounts

California is poised to be on the front lines of implementing laws governing when and if employers can require applicants or employees to divulge their social media passwords and grant employer access as part of the hiring process or in the course of the employment relationship. Last week, the California Senate voted 28-5 in favor of Assembly Bill 1844, which would prohibit employers from forcing employees and prospective workers to turn over usernames and passwords for their social media accounts and also would ban employers from discharging, disciplining or threatening to retaliate against employees or job applicants who did not comply with such requests. Of note, the Senate’s proposed amendments clarify that employers may request personal social media information when related to an investigation involving alleged workplace misconduct or violations of the law. The Senate also amended the bill to specify that the State’s labor commissioner is not required to investigate or determine any violations of the bill. The proposed bill next moves to the Assembly for a vote.

This proposed California bill comes on the heels of multiple memoranda issued by the National Labor Relations Board analyzing various implications of social media in the workplace and specifically opining on what employers can and cannot review and regulate in the context of employee (and applicant) rights. There currently are hundreds of cases pending before the National Labor Relations Board concerning social media issues — and the Board has made it abundantly clear that its jurisdiction to protect employee rights is not limited to organized (“unionized”) workplaces.

Maryland passed the first state law prohibiting employers from requiring disclosure of social media information which goes into effect October 1, 2012. Illinois also passed a similar law on August 1, 2012 (see our prior coverage here) which takes effect on January 1, 2013. Massachusetts, New Jersey and New York are also currently considering similar legislation.

Third Circuit Addresses The Notice An Employee Must Give Of Unforeseeable FMLA Leave

On August 3, 2012, in Lichtenstein v. University of Pittsburgh Medical Center, the U.S. Court of Appeals for the Third Circuit addressed the issue of how much information an employee must provide when notifying an employer of unforeseeable leave under the Family Medical Leave Act, 29 U.S.C. § 2601, et seq. (“FMLA”). By way of background, the FMLA generally entitles eligible employees to take up to twelve weeks of unpaid leave during any twelve-month period to care for themselves or a family member with a “serious health condition,” such as a condition requiring inpatient hospital care or continuing medical treatment. An employee only qualifies for FMLA leave if he or she provides sufficient information to permit the employer to determine whether the FMLA applies. For unforeseeable leave, the regulations require an employee to provide this notice “as soon as practicable.”

In this case, plaintiff Jamie Lichtenstein, a psychiatric technician, telephoned her employer shortly before her shift was scheduled to begin and explained that she “was currently in the emergency room [because her] mother had been brought into the hospital via ambulance, and [Lichtenstein] would be unable to work that day.” A few days later, Lichtenstein provided further information about her mother’s condition and requested a leave of absence but, by that time, the employer had already decided to terminate Lichtenstein’s employment for unrelated conduct pre-dating the mother’s emergency room visit.

In a lawsuit against her employer, Lichtenstein asserted FMLA interference and retaliation claims, alleging that her absence had constituted protected leave and that her employer had impermissibly considered the absence in deciding to terminate her employment. The district court granted summary judgment for the employer, dismissing Lichtenstein’s FMLA claims. Among other things, the district court concluded that Lichtenstein’s notice was inadequate to trigger the FMLA’s protections, because it did not include enough information for the employer to conclude that her mother “necessarily” had a serious health condition. On appeal, the Third Circuit reversed, emphasizing that, “when the leave is unforeseeable, the employee’s obligation is to provide sufficient information for an employer to reasonably determine whether the FMLA may apply to the leave request” (internal quotation marks omitted and emphasis in original).

The Third Circuit explained that, by notifying the employer that her mother had been taken to the emergency room by ambulance, Lichtenstein did not provide enough information for the employer to conclude that her mother necessarily had a “serious health condition,” but did provide enough information for the employer to reasonably determine that her mother may have a “serious health condition” and the FMLA may, therefore, apply. According to the Court, once the employee’s initial notice “reasonably apprises the employer that FMLA may apply, it is the employer’s burden to request additional information if necessary.”

The Lichtenstein case provides helpful guidance for employers. With regard to the FMLA, when receiving information from an employee suggesting that his or her absence may trigger the FMLA, the employer should follow up with the employee and request additional information. This case also acts as a reminder that, when discharging employees, an employer should be sure to document its legitimate, non-discriminatory reasons in order to minimize the risk that an unexpected development, such as unforeseeable leave, provides a basis for employees to allege that the decision was unlawful.

To Compel Discovery Of A Party’s Social Media Content In Pennsylvania, There Must Be A Hook

Pennsylvania trial courts have been particularly active in the past few years in issuing opinions regarding how much, if any, of a party’s non-public Facebook and other social media content are subject to discovery in litigation. A July 2012 opinion issued by Judge Wettick in Allegheny County, Trail v. Lesko, highlights these increasing discovery disputes and outlines the recent trends of the courts addressing the disputes. As Judge Wettick found, courts have compelled very broad access to social media content in cases where one party has articulated that the publicly available portions of the other party’s social media site contains information relevant to the prosecution or defense of a claim.

Although there are no appellate court opinions on this subject matter in Pennsylvania, there are several trial court opinions. On the one hand, some of the cases permit very broad access to Facebook and other social media content. For example, at least three written opinions in Pennsylvania since 2010 have required the party from whom discovery is sought to provide his or her username, password or other login information to the requesting party. In these cases, the requesting party provided the court with specific evidence from the individual’s publicly accessible pages showing the likelihood that full access to the social media account would garner further relevant information. In Zimmerman v. Weis Markets, Inc., the plaintiff claimed personal injuries from a workplace injury and his public profile said he enjoyed “ridin” and “bike stunts” and showed pictures of him with a black eye and his motorcycle both before and after the workplace accident at issue in the litigation. And, as one Pennsylvania trial court put it in McMillen v. Hummingbird Speedway Inc., “[w]here there is an indication that a person’s social network sites contain information relevant to the prosecution or defense of a lawsuit, . . . and given [the case law’s] admonition that the courts should allow litigants to utilize ‘all rational means for ascertaining the truth,’ . . . and the law’s general dispreference for the allowance of privileges, access to those sites should be freely granted.”

On the other hand, a number of Pennsylvania trial courts, in written opinions, have completely denied any and all access to a party’s social media content. Many of the requesting parties in these cases failed to identify any compelling or specific reason for obtaining access to the other party’s non-public social media content. These courts have concluded that the mere fact that a party has a social media account, without anything more, is insufficient to justify broad discovery access to the account.

In Trail, Judge Wettick provides a comprehensive review of Pennsylvania’s case law addressing this question. Judge Wettick also highlights cases from a number of other jurisdictions, which are generally consistent with the approach of Pennsylvania courts that have addressed this question in that the other jurisdictions tend to require some factual predicate suggesting the existence of relevant information prior to ordering access to the information being sought. Unlike Pennsylvania, though, some other jurisdictions have sought to establish more of a middle ground between wholesale denial of the request for social media content and unlimited access to the user’s profile. Judge Wettick reached what is perhaps the obvious conclusion from these cases: litigants seeking access through discovery to a party’s Facebook or other social media content must show that there is a sufficient likelihood that the discovery requested will provide relevant evidence that is not otherwise available. Further, Judge Wettick said the court must consider the level of intrusiveness as balanced against the need for the discovery. Although courts are still wrestling with this question and the answer will continue to evolve, the courts seem to fall back on the age-old principle that discovery should not be an unbridled fishing expedition into a party’s private information. However, with a big enough hook (i.e., publicly accessibly portions of the social networking site suggesting that further relevant postings are likely to be found by access to non-public portions), Pennsylvania courts are willing to provide very broad access to a party’s social media content.