For younger generations, it is probably not surprising that employers may have access to any internet records generated on a work computer.  For others, this may seem like a huge invasion of privacy.  Regardless, in February 2019, the Third Circuit Court ruled that employers are permitted to monitor their past employees’ current activity on their previous work computers after the employees have departed from the employer.

In the case of Scherer Design Group, LLC v. Ahead Engineering, LLC,[1] the Third Circuit held that for purposes of preventing Ahead Engineering from stealing and retaining client information from Scherer Design Group (SDG), SDG could review its former employees’ Facebook accounts that they had remained logged into when they left the company.  SDG is an engineering firm that provides services in the telecommunication field.  One of SDG’s former employees, Schwartz, had threatened to leave the firm and start a competing company if he was not promoted to have ownership status within SDG.  When negotiations for a promotion fell through, Schwartz resigned from the company and started two competing telecommunications firms—Ahead Engineering and Far Field Telecom.  Schwartz had not signed a noncompete agreement.

After Schwartz left SDG, he began trying to get other SDG employees to join his new firms.  He successfully recruited three SDG employees, and convinced them to send certain SDG documents and information regarding its largest clients and its general business practices for use with the competitor firms.  Part of this communication was completed using the employees’ Facebook accounts on their company computers.  In December 2017, Schwartz began working with one of SDG’s largest clients which eventually left SDG for Schwartz’s firms.  Thereafter in January 2018, the three solicited SDG employees resigned and began working for Schwartz.  After the employees and its largest client left, SDG began investigating the cause of the attrition.

SDG’s network administrator began examining the former employees’ company computers.  The investigator reviewed the browser history on the computers using software to access previously deleted activity and discovered that the employees’ Facebook passwords had not been cleared from the computer.  After reviewing the information that was available on the Facebook account, the investigator installed software that allowed for continuous monitoring of the employees’ Facebook activity without detection.  This monitoring revealed more evidence of the former employees’ communications with Schwartz to leave SDG and take client information and other intellectual property with them.

Once SDG discovered the nature and extent of the information that the employees took, it sought a temporary restraining order and a preliminary injunction to prevent the former employees from contacting SDG’s clients and from destroying the taken information.  Preliminary injunctions basically require the offending behavior or action stop.  As such, the party seeking this remedy must come into court with “clean hands.”  In other words, the remedy seeker cannot have not done anything wrong itself that would make it unfair for them to obtain the injunction.  Schwartz argued that because SDG had monitored its former employees’ Facebook accounts without their permission, it had “unclean hands” and it would be unfair to allow it to prevent the former employees’ from using the information it took from SDG.

The Third Circuit said that for Schwartz’s claim of unclean hands to be successful, there must be a direct connection between the unfair conduct he alleged and the activities SDG wanted to be enjoined.  The court considered SDG’s access of the Facebook account in relation to its claims for potential breaches of loyalty, tortious interference, and/or trade secret violations.  The former employees’ conduct giving rise to these allegations occurred long before SDG began monitoring the Facebook account.  The court found that because SDG did not monitor the Facebook account to give it a basis for the claims it already had against the former employees, there was not enough of a connection between the monitoring and the preexisting claims for the court to deny SDG a remedy.  In short, SDG’s monitoring of the Facebook account did not enable it to find out that the former employees had stolen valuable information—it merely served as additional evidence.

The case addresses a preliminary motion in the litigation between SDG and Schwartz, but it is important for employees to be aware of the potential consequences of using personal social media accounts on work computers.  The Third Circuit did not address whether SDG could use the information from the Facebook account going forward in its litigation (i.e., whether the information would be admissible at trial), but it is enough for now to know that an employer’s monitoring of a former employees’ social media accounts that they had accessed on a work computer does not bar the former employer from seeking equitable remedies in court when the claims do not arise from what the employer found on Facebook.

This article was written with contribution from Sarah Rothermel, 3rd year law student at Widener Law Commonwealth.

[1] Scherer Design Group, LLC v. Ahead Eng’g, LLC, 2019 U.S. App. LEXIS 5520 (3d Cir. 2019).