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Confidentiality Agreement Keeps Free Speech Rights in Check on the Internet

The Internet is a powerful weapon in the hands of a disgruntled employee.  Internet bulletin boards invite employees to attack their own employer.  The right to free speech under the First Amendment often is the shield that protects employees who speak out on the Internet.  One of the few means to  defeat the First Amendment shield is an employee confidentiality agreement.  Two recent New Jersey decisions highlight how this can be accomplished.

In Immunomedics Inc. v. Jean Doe, a/k/a “moonshine_fr,” No. A-2762-00T1, 2001 WL 770389 (N.J. Super. Ct. App. Div., July 11, 2001), Yahoo! was forced to disclose the name of an employee of a biopharmaceutical company who placed anonymous messages about her company on Yahoo!’s internet message board.  The employee, “Moonshine,” anonymously described  herself as a “worried employee,” and revealed details about the company’s European operations.  These details included information about the company’s lack of inventory, its poor sales outlook, and an assertion the company would fire its European Manager.

Immunomedics admitted Moonshine’s statements were true, but subpoenaed Yahoo! to disclose Moonshine’s true identity since she violated a confidentiality agreement and employee handbook.  After receiving this subpoena, Yahoo! contacted Moonshine, who filed a motion to quash the subpoena.

The court discussed the necessary balance between an internet message board user’s anonymous free speech rights and an employer’s right to sue for violation of its confidentiality agreement.  It found Immunomedics established a prima facie cause of action for breach of its confidentiality agreement, and the disclosure of Moonshine’s identity was warranted, since: 1) evidence demonstrated Moonshine was an employee of Immunomedics; 2) employees of Immunomedics execute confidentiality agreements; and 3) the content of Moonshine’s bulletin board messages provided evidence of a breach of the confidentiality agreement.

Contrast Immunomedics with Dendrite Int’l Inc. v. John Doe No. 3 No. A-2774-00T3, 2001 WL 770406 (N.J. Super. Ct. App. Div., July 11, 2001), where the same Judge  refused to require Yahoo! to disclose the identity of an anonymous internet user.  The anonymous message board user alleged Dendrite’s President made changes to revenue recognition practices to increase his own earnings, and was trying to sell the Company, but no one was interested.  Dendrite alleged breach of contract, defamation, and misappropriation of trade secrets.  The court determined Dendrite could not overcome the free-speech rights of the anonymous internet poster since the posted information failed to harm the company, either by negatively affecting its stock value or inhibiting its hiring practices.

In both cases the harm to the employer appeared comparable.  The difference was Immunomedics sought to enforce a confidentiality “contract,” while Dendrite attacked the right of free speech.  Unless the harm is extreme, attacking free speech is a poor strategy.  The more effective approach is to protect confidential information through confidentiality agreements and accept the side benefit of minimizing employee internet attacks on the corporation.  Companies should seek advice from counsel to assess the appropriateness of confidentiality agreements, and to receive assistance in drafting these agreements.