Hair Stylist Sued for Friending Former Employer’s Clients on Facebook

According to a decision of a Massachusetts Superior Court, one day after beginning work in 2010 as a hair stylist for Invidia, LLC, a Sudbury, Massachusetts hair salon, Maren DiFonzo signed an agreement containing non-competition, non-solicitation and confidentiality provisions in favor of Invidia. The agreement provided that she would be restricted, after her departure from Invidia, from offering such services for a period of two years within a ten mile radius of Invidia.

After about 28 months at Invidia, Ms. DiFonzo informed her employer that she was leaving to work for another salon which was only 1.6 miles away. Four days after DiFonzo resigned from Invidia, David Paul Salons, her new employer, posted a “public announcement” on DiFonzo’s Facebook page, noting DiFonzo’s new affiliation with David Paul. One Ms. Kaiser posted a comment which said, “See you tomorrow Maren [DiFonzo]!” Ms. Kaiser then canceled her appointment at Invidia for the next day.

DiFonzo was thereafter sued by Invidia for breaching the agreement and Invidia sought a preliminary injunction to require DiFonzo to observe the provisions of the agreement until trial on the merits. To obtain such an order by the court, Invidia was required to prove that it would likely prevail at trial and that damages would be inadequate to remedy the breach.

When Invidia learned, almost immediately, that DiFonzo was going to work at David Paul Salons, it had its attorney send letters to both DiFonzo and David Paul Salons, expressing its intention to enforce the Agreement. DiFonzo’s employment at David Paul Salons lasted from August 20, 2012 to September 1, 2012. DiFonzo believed that David Paul Salons “fired” her on September 1, although Mr. Pompey, the owner of David Paul Salons, said that he told Ms. DiFonzo “to take time off from David Paul and return if she could get things straightened out with Mr. Patzleiner” of Invidia.” Mr. Pompey said that he took this action “solely [because of] the threats I received from Mr. Patzleiner” of Invidia, after a discussion with Mr. Patzleiner in which Mr. Patzleiner said that “he did not care” whether DiFonzo would solicit Invidia’s customers, but rather “he ‘needed to send a message’ to his other employees.”

In its supporting papers, Invidia pointed out that DiFonzo had become Facebook “friends” with at least eight of Invidia’s clients. Invidia also prepared a report indicating that 90 Invidia clients, formerly served by DiFonzo, “either did not keep his or her scheduled appointment, canceled, or failed to schedule a future appointment” since August 18,2012, the day of DiFonzo’s resignation.

Invidia’s owner stated that Facebook “is a significant channel of communication between Invidia and its clients.” Invidia argued that if these 90 clients are accustomed to communicating with Invidia through Facebook, they are probably Facebook-savvy enough to locate Ms. DiFonzo’s Facebook page after she left Invidia.

According to the court, however, Invidia failed to prove that damages were inadequate and failed to prove that it would likely prevail on the merits. Invidia did not show to the court’s satisfaction that DiFonzo solicited any of the purported clients via Facebook or otherwise.  The court held that: “So long as they reached out to Ms. DiFonzo and not vice versa, there is no violation of the non-solicitation provision of the Agreement.” Invidia’s request for the preliminary injunction was denied. [Court opinion.]

The court also noted: “The nature of a hair stylist’s relationships with her customers is such that it can be difficult to determine whose goodwill is being created as she pleases those customers enough to convince them to return to the salon for future visits. Given the nature of this industry, the question of whether this particular non-competition provision protects the employer’s goodwill is a difficult one, as to which Invidia’s theory may or may not ultimately carry the day.”

NOTE:  Many states allow such agreements restricting future employment that are “reasonable” as to geography and time period. With only certain narrow exceptions, such agreements in California would be void as a matter of law. See Cal. Bus. & Prof. Code § 16600 et. seq.


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Court Can Require Social Media Records To Be Produced, But Request Should Be Narrowly Tailored

A recent decision by an appellate court in New York reversed an order by a lower court that required disclosure of social media information of an injured party involved in a motorcycle accident and subsequent lawsuit over alleged defects in the motorcycle.  Suzuki, the manufacturer of the motorcycle, requested “the entire contents” of his social media accounts and the lower court so ordered.  The plaintiff had objected to producing this information on the grounds of relevance and burden, contending that the demand was merely a “fishing expedition.”  The appellate court agreed holding that the request was overly broad and not narrowly-tailored to seek “only that social-media-based information that relates to the claimed injuries arising from the accident.” [Appellate Court Decision]

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Johnny Northside and His Truth Prevail On Appeal

On March 29, 2011, I posted an article about a neighborhood blogger, Mr. John (“Johnny Northside”) Hoff, who got whacked with a $60,000 judgment by a Minnesota jury for interfering with a contract between one Jerry Moore and the University of Minnesota.  Hoff had written a post accusing Mr. Moore of being involved in a “high-profile fraudulent mortgage.”  The evidence showed that one day after the article appeared on Hoff’s blog, Mr. Moore was fired from his new position to study mortgage foreclosures with the Urban Research and Outreach/Engagement Center of the University.  Hoff appealed the verdict.  On August 20, 2012, the Minnesota Court of Appeals reversed holding that providing a third person with truthful information cannot form the basis for a claim for interference with a contract.  The decision can be found here.  Meanwhile, in his crusade to rid north Minneapolis of crime, corruption, and general malfeasance, Johnny continues to blog about topics such as local sex offender “Spanky Pete” and Pete’s lawyer.

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Bank Sues Former Employee Over Rants on Craig’s List and Pays For It

Summit Bank, a community bank headquartered in Oakland, California, sued Robert Rogers, its former vice president and chief credit administrator, for defamation alleging that he published false statements about the Bank with the intent to defame the Bank‘s “good name and reputation.”  The suit was based on 21 allegedly defamatory posts made by Rogers over a two-month period in 2009 on the “Rant and Raves” section of internet website.  The statements were made under an anonymous name, later determined to be Rogers’s after Craigslist records were subpoenaed by the Bank.  A few of Rogers’s colorful postings follow:

His June 7, 2009 post read: “Being a stockholder of this screwed up Bank, this year there was no dividend paid. The bitch CEO that runs this Bank thinks that the Bank is her personel [sic] Bank to do with it as she pleases. Time to replace her and her worthless son.

His June 21, 2009 post read: “Whats [sic] up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson. [¶] This should not be allowed. Move your account now.”

His July 14, 2009 post read:  “The FDIC and the California Department of Financial Institutions are looking at Summit Bank. This is the third time in less than one year. This is not a good thing, move your accounts ASAP.”

The Bank also alleged that Rogers’s statements were illegal under Financial Code section 1327, which imposes criminal liability when an “untrue statement or rumor” is made that is “directly or by inference derogatory” to a bank‘s financial condition. Rogers admitted to making the statements, but asserted that the statements were comprised of facts which were true and of opinion that he was entitled to express under the free speech guarantees of the First Amendment.

Rogers brought a motion under California’s “anti-SLAPP” law in which he asked the court to strike the Bank’s complaint on the grounds that the suit was brought for the illegitimate purpose of chilling his right to speak freely about the Bank. However, the trial court denied his motion finding that: (1) the statements made were not protected speech within the meaning of the anti-SLAPP law, and (2) the Bank had shown a probability of success on the merits of its defamation claim.

The California Court of Appeal had a different view.  In its opinion on May 29, 2012, the Court ruled that “even if Rogers‘s speech violated the statute, it cannot be deemed ‘illegal as a matter of law’ because Financial Code section 1327 is an impermissible content-based restriction on speech protected by federal and state constitutional free speech guarantees.”  [May 29, 2012 opinion of the California Court of Appeal]  In doing so, the Court reached back to the origins of the 1917 statute.  “Apparently, over a century ago, the (American Bankers) Association lobbied Congress and state legislatures to make the dissemination of untrue statements and rumors about the financial condition of commercial banks a criminal offense after several bank runs were ignited or exacerbated by published statements that occurred during the Bank Panic of 1907-1908.” Analyzing the statute under modern jurisprudence, the Court held that the statute was unconstitutional on its face because it is vague and overly broad and did not include a malice requirement for those banks that may be public figures, limit its reach to banks that are not, and failed to include “a clear requirement that the prosecutor prove defendant‘s knowledge of falsity or recklessness with regards to falsity.”

The Court determined that the subject matter of the posts were not outside the broad range of public discourse and were of public interest. “In light of the recent financial meltdown of some of our country‘s largest and most trusted financial institutions, the financial stability of our banking system is a legitimate object of constitutionally protected public commentary, discussion, criticism, and opinion.” The Court held that the anti-SLAPP statute applies to the Bank‘s defamation action against Rogers and that Rogers met his burden of showing that the Bank‘s defamation action arose from an act in furtherance of his constitutional right of free speech. Once this was established, the anti-SLAPP law requires that the burden be shifted to the Bank to show that it had a probability of prevailing on its defamation claim.

The Court then analyzed the subject matter of the defamation claim – the content of the Craigslist postings which “must be viewed from the perspective of the average reader of an Internet site such as Craigslist‘s ‘Rants and Raves,’ not the Bank or a banking expert who might view them as conveying some special meaning.” Citing to law review articles and case law in support, the Court concluded: “Looking at the actual language used in Rogers‘s posts, it is obvious Rogers‘s messages are intended to be free-flowing diatribes (or ‘rants’) in which he does not use proper spelling or grammar, and which strongly suggest that these colloquial epithets are his own unsophisticated, florid opinions about the Bank and its key personnel. This context further undermines the reader‘s expectation that the posts are to be understood as assertions of fact.”

Indeed, the Court went on stating that, “courts have frequently found the type of name calling, exaggeration, and ridicule found in Rogers‘s posts to be nonactionable speech. (See, e.g., Krinsky (v. Doe 6 (2008)), 159 Cal.App.4th (1154) at pp. 1159, 1173 [in a chat room setting, anonymous post that corporate officers consisted of a ‘cockroach,’ ‘losers,’ ‘boobs,’ and ‘crooks’ fell into the grouping of ‘crude satiric hyperbole which, while reflecting the immaturity of the speaker, constitute protected opinion’]).”

The Court stated further: “Rogers‘s statements that the Bank was mismanaged and rendered poor service and that the Bank‘s depositors would be well advised to move their accounts ‘before its [sic] too late’ and ‘before they close’ do not imply a provably false factual assertion to form the basis for a defamation action. Instead, as a matter of law, such statements constitute nonactionable opinions.” (Emphasis in original)

The Court held “that the statements on which the Bank‘s defamation claim is based are nonactionable statements of opinion, rather than verifiable statements of fact. Consequently, the Bank has not presented a prima facie case that the statements at issue, when viewed in the context of an Internet message board, are reasonably capable of a defamatory meaning or are substantially false.”  Because the Bank failed to establish a likelihood of prevailing on its defamation claim, the trial court’s decision was reversed. The Court then delivered its sting. “Upon remand, the trial court shall issue a new and different order striking the Bank‘s complaint and shall enter an order awarding Rogers his attorney fees and costs.”

Chalk one up for free speech.

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Federal Judge Rules that “Liking” Facebook Page is Not Constitutionally Protected Speech

After winning re-election for Sheriff of Hampton, Virginia in November of 2009, Sheriff B.J. Roberts decided not to retain a dozen employees of the Sheriff’s Office because, as to three of them, he wished to replace civilian employees with sworn deputies and, as for the other nine, he wished to replace them due unsatisfactory work performance and his belief that their actions “hindered the harmony and efficiency of the Office.”  Six of the former employees filed suit alleging that the termination was actually in retaliation for their political support for the Sheriff’s rival, Jim Adams, during the election campaign. Plaintiffs alleged that the termination was wrongful because it was based on their free speech expressions which were subject to protection under the First Amendment.  For example, one of the Plaintiffs, Daniel Ray Carter, Jr., alleged that he was terminated after Sheriff Roberts discovered that he “liked” Adams’ Facebook page.

On April 24, 2012, U.S. District Court Judge Raymond A. Jackson granted summary judgment in favor of Roberts against all Plaintiffs.  [Court’s Opinion]  As to Carter’s claim, the Court decided in Roberts’ favor because it found that even if Roberts knew that Carter “liked” Adams’ Facebook page, Carter was required to show that “liking” a Facebook page is constitutionally protected speech.  Judge Jackson ruled that “merely ‘liking’ a Facebook page is insufficient speech to merit constitutional protection.”

A number of critics believe that “liking” a Facebook page is constitutionally protected speech subject to First Amendment protection and that the decision will be appealed.  [See]


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Posting Pictures on Her Facebook Wall Lands Nursing Assistant in Jail and More

Late last month, an Oregon jury found Nai Mai Chao, 26, guilty of invasion of the personal privacy of elderly or disabled patients after finding that she took graphic photographs of them with the contents of bed pans at the nursing home where she worked and posted them on her Facebook wall in April 2011. She denied taking the photos, but admitted posting them to her Wall where some of her Facebook friends jokingly commented on a number of them.  Some, however, commented with disgust including a coworker who recognized one patient by the bandages on his bed sores and reported Chao.

During trial, a senior nurse from the nursing home where Chao worked near Portland testified that one of the subjects of Chao’s photographs was told that he had been photographed naked and incontinent without his consent.  She testified that he was humiliated after this revelation and died two months after the Facebook posting.

Ms. Chao was sentenced and has served eight days in jail.  The consequences of her actions also resulted in a $500 fine, being ordered to write a 1,000-word apology to a patient that “should be an insightful look at why the defendant did what she did,” being fired from her job at the nursing home, revocation of her nursing license by the Oregon State Board of Nursing, and entry into a database that precludes her from becoming a nurse in any state.  Additionally, for two years she is prohibited from work that would require her to care for children, the elderly, or other vulnerable people, she must avoid social media, including Facebook, Google+, Twitter and MySpace and she must refrain from photographing people without their explicit consent.

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Media Frenzy Suddenly Erupts Over PhoneDog Suing Ex-Employee for Absconding with Twitter Account

As an intellectual property attorney, I too am surprised at times by the issues that arise in the context of social media and how they are reported. Here, according to the lawsuit allegations by PhoneDog, the novel legal issues appear to be who has rights in a Twitter account used by an employee in the course and scope of his employment, who has rights to claim value in the followers and just what lost value can be established in such followers.  From a variety of perspectives this story has interest. However, even though the complaint by PhoneDog was filed months ago, it seems to have only caught fire this month.  (See note below.)

According to the complaint filed in U.S. District Court, Northern District of California, since April 2006, Noah Kravitz worked for PhoneDog as a product reviewer and video blogger. He was given use and maintained the Twitter account “@PhoneDog_Noah.” Kravitz would submit written and video content to PhoneDog which was then transmitted to its users via a variety of mediums, including PhoneDog’s website and the subject Twitter account. PhoneDog also alleged that during the course of Kravitz’ employment, the subject Twitter account generated approximately 17,000 Twitter followers.  According to PhoneDog, all @PhoneDog_Name Twitter accounts used by its employees, as well as the passwords to such accounts, constitute proprietary, confidential information.

After Kravitz ended his employment with PhoneDog in October 2010, PhoneDog requested that he relinquish the Twitter account. In response, Kravitz changed the Twitter account handle to “@noahkravitz” and he continues to use the account. As a result, PhoneDog alleges that it has suffered a loss of $340,000. This figure was calculated by multiplying 17,000 followers at $2.50 per follower per month “according to industry standards” and multiplied further by eight months, the time period alleged that Kravitz used the account at PhoneDog. The lawsuit was filed against Kravitz asserting claims under California law for: (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion.

In ruling on Kravitz’ motion to dismiss the lawsuit, the court allowed much of the case to proceed at this early stage on the allegations made by PhoneDog and laid out what PhoneDog will likely need to prove.  “[S]hould PhoneDog be able to establish that it has some property interest in the Twitter account or the password and follower list, the question becomes what is the proper valuation of such items.” [Order dated Nov. 8, 2011, granting in part and denying in part Kravitz’ Motion to Dismiss]   We’ll have to see how this one plays out.

Note:  PhoneDog’s complaint was filed in federal court on July 15, 2011 and has been available since July 20, 2011 to view on PACER, a website dedicated to making court filed documents available to the public. However, the story generated a flurry of media activity many months later.  [NY Times article dated Dec. 25, 2011]; [CNN article dated Dec. 28, 2011]; [AP Story dated Dec. 29, 2011]; [TwinCitiesNews story dated Dec. 29, 2011].  PACER also shows that Kravitz has filed a motion to dismiss PhoneDog’s first amended complaint hearing on which is set for Jan. 26, 2012 at 10:00 AM in Courtroom B, 15th Floor, San Francisco before Magistrate Judge Maria-Elena James.

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Yelp Sued for Allegedly Manipulating Ratings to Extort Advertising Revenue, but Lawsuit was Tossed Because Even Wrongful Motive Does Not Defeat Immunity of ISP Under Statute

In the third amended complaint (“TAC”) of a consolidated class action, Plaintiffs Boris A. Levitt and Wheel Techniques (“Wheel Tech.”) et al. alleged that Wheel Tech. noticed negative reviews on its Yelp page which did not correspond with its records of actual customers.  At around the same time, Wheel Tech. received sales calls from Yelp requesting that Wheel Tech advertise.  Later, Wheel Tech. called Yelp to ask why a competitor had a high rating on Yelp and was told that the competitor advertised and that “we work with your reviews if you advertise with us.”  After refusing to advertise again, Wheel Tech. alleged that its 1-star review was moved to the top of the business page “within minutes” as a threat to induce Wheel Tech. to advertise.

Apart from Wheel Tech.’s allegations, Plaintiffs alleged that “approximately 200 Yelp employees or individuals acting on behalf of Yelp have written reviews of businesses on Yelp.”  Plaintiffs also alleged that Yelp’s CEO admitted to a New York Times blog that “Yelp has paid users to write reviews.”  Among the causes of action, Plaintiffs sued Yelp for civil extortion and attempted civil extortion.

As it had successfully done in connection with the second amended complaint (“SAC”), Yelp moved to dismiss the TAC on the grounds that Plaintiffs failed to plead sufficient facts to constitute a plausible cause of action and that even if the allegations were true, the Communications Decency Act (“CDA”), 47 U.S.C. § 230(c), provided Yelp with immunity.  The Court agreed with Yelp on both grounds.  [Levitt et al. v. Yelp, N.D. Cal. (Oct. 26, 2011)]

Quoting from the order dismissing the SAC without prejudice, the Court stated:  “Despite these allegations, however, it remains ‘entirely speculative that Yelp manufactures its own negative reviews or deliberately manipulates reviews to the detriment of businesses who refuse to purchase advertising,’ and ‘[t]he [TAC] provides no basis from which to infer that Yelp authored or manipulated the content of the negative reviews complained of by plaintiffs.’”  The Court went on:  “That Yelp employees have written reviews, even for pay, does not raise more than a mere possibility that Yelp has authored or manipulated content related to Plaintiffs in furtherance of an attempt to ‘extort’ advertising revenues.”  The Court cited Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009) (“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not `show[n]’—`that the pleader is entitled to relief.'”) (quoting Fed. R. Civ. P. 8(a)(2)).

Supporting its second ground granting the motion to dismiss, in relevant part, Section 230(c)(1) of the CDA provides: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  Although the Court was “sympathetic to the ethical underpinning of Plaintiffs’ argument” of extortion based on “Yelp’s alleged manipulation of their review pages — by removing certain reviews and publishing others or changing their order of appearance” — it held that Section “230(c)(1) contains no explicit exception for impermissible editorial motive.”  The Court went on to to rule that Yelp’s manipulation of its star rating system as alleged also did not fall outside the ambit of the immunity provided by Section 230(c)(1) because its ratings were based on input by other content providers.  Accordingly, the Court held that the alleged conduct was immunized thereunder and dismissed the TAC with prejudice.

Update:  In its decision on September 2, 2014, the U.S. Court of Appeals for the Ninth Circuit upheld the ruling of the District Court.

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New California Statute Prohibits Jurors’ Use of Social Media

On August 5, 2011, California Governor Jerry Brown signed California Assembly Bill No. 141 which expands the duties of the California trial courts to admonish jurors to refrain from communicating, researching or disseminating information about any subject of the trial.  The new law expressly applies to any form of electronic or wireless communication. [2011 Cal. Laws chap. 181]  The new law will take effect on January 1, 2012.

Sponsoring Assembly Member Felipe Fuentes explained: “Although current law arguably prohibits the use of electronic/wireless communication devices to improperly communicate, disseminate information or research, the fact that this kind of communication is not expressly included in current law has resulted in increased problems in courts across the county.”

“[W]illful disobedience by a juror of a court admonishment related to the prohibition on any form of communication or research about the case, including all forms of electronic or wireless communication or research” is punishable as contempt of court, a misdemeanor.  Unless otherwise stated, every offense declared to be a misdemeanor is punishable by imprisonment in the county jail not exceeding six months, or by fine not exceeding one thousand dollars ($1,000), or by both.

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Couple Sued For Negative Review of Hotel on Travel Website

A hotel company near Chicago has sued Michael Gladstone and Liora Braun, a Massachusetts couple, for posting a negative review of its Carleton Hotel on, a popular website dedicated to lodging reviews and booking travel arrangements.  According to the posting purportedly shown in the lawsuit papers, the couple stayed at the hotel with their two small children for a few nights in April 2011.  A month later, Ms. Braun posted the review on  According to the lawsuit papers, she indicated that on “the third and final night of our stay we found a bedbug crawling on my husband during the night.” They reported it to the night manager and mentioned it again upon checkout.  She further stated that four weeks after coming home, “a bedbug was found in our bed,” despite intensive cleaning of their clothes and throwing out luggage from the trip.   The extermination and related activity that followed resulted in expenses to them of three to four thousand dollars.

The lawsuit alleges, however, that the report of bedbugs at the hotel was knowingly false and defamatory, that the hotel staff and a third party exterminator inspected the room and found no bedbugs, that has 40 million users per month and that the posting has likely dissuaded potential guests from staying at the hotel resulting in lost business.  The lawsuit alleges two counts of defamation, a claim for interference with prospective advantage, a claim for “false light invasion of privacy” and seeks compensatory and punitive damages.

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