Only a few published decisions have addressed the impact of social media on noncompetes and those decisions have come from states other than Colorado. There is little doubt, however, that social media will play a role in many noncompete disputes in the future.
The existence of trade secrets is a key to many noncompete cases, because companies often rely on the existence of trade secrets to enforce noncompetes. Social media may play a role in these cases, because social media may show that information isn't really secret.
Companies often claim, for example, that their customer list is a "trade secret". As information generally has become more readily available, however, it has become more difficult for employers to prove that any list of customers truly is a secret. The internet and electronic compilations of companies make it easier to determine the customers or potential customers for many companies. At a minimum, social media should make it more difficult for employers to prove that any list is a secret.
Postings on social media also may cause a company's customer list to lose its status as a trade secret. Many employees, particularly sales employees, now use Linked In and make "connections" with customers they serve. Linked In has various privacy settings, which allow a user to control whether his connections can "see" all of the users' other connections. If employees join Linked In, link to all of their customers and allow their connections to see their other connections, the company may struggle to show that the identity of its customers really is a trade secret.
Colorado's new Facebook Law may complicate an employer's efforts to monitor an employee's social media activity. Under the new law, an employer can't compel an employee to disclose his passwords to social media accounts. Nor may an employer compel an employee to add someone to an employee's list of contacts. As a result, an employer may not know whether an employee has disclosed the identity of its customers to his other friends or connections.
On Linked In, users also have the option of creating and updating their profile on the site. Not surprisingly, employees are eager to describe themselves in the best light possible. In doing so, employees may include information in their profile which the company considers a trade secret. One the profile is published, the disclosed information may lose its status as a trade secret, because it is no longer secret.