Is A LinkedIn Contact List A Trade Secret? Potentially, Yes

Richard Raysman is a Partner in our New York office.

As a LinkedIn user, the decision concerning whether to share your entire list of connections with any individual connection can often implicate a number of strategic questions. As of May 2014, LinkedIn boasts 300 million users globally and access, or lack thereof, to such a vast network can depend to some degree on how an account is configured insofar as that configuration determines how information is shared amongst a user's connection. The business implications are apparent, but such a decision has started to engender legal actions, as encapsulated by Cellular Accessories for Less, Inc. v. Trinitas, LLC, No. CV 12-06736 DDP (C.D. Cal. Sept. 16, 2014).

Facts

Plaintiff Cellular Accessories for Less, Inc. (Cellular) and Defendant Trinitas LLC (Trinitas) are both in the business of selling mobile phone accessories to businesses. Defendant David Oakes (Oakes) worked for Cellular as a sales manager from 2004 to 2010. In order to receive approbation to start, Oakes was required to sign an Employment Agreement (the Agreement) which included a clause that stated in relevant part that Cellular requested that the "proprietary information remain property of this organization, and may not leave, either physically or electronically, unless approved in writing" by the CEO of Cellular. Oakes similarly signed a "Statement of Confidentiality" (the Statement) in which he avowed to not "knowingly, disclose, use, or induce or assist in the use or disclosure" of the Cellular proprietary information or anything related thereto, without the express written consent of Cellular.

Proprietary information was defined in the Statement as "information (a) that is not known by actual or potential competitors of the Company or is generally unavailable to the public, (b) that has been created, discovered, developed, or which has otherwise become known to the Company ... and (c) that has material economic value or potential material economic value to the Company's present or future business." Oakes signed the agreement, but disputed such signature created a valid contract.

Shortly subsequent to his termination in 2010, Oakes emailed himself a file containing the contact information for more than 900 personal and business contacts (the ACT file), and another file that contained direct contact information for the purchasing agents of certain clients, information on clients' billing preferences and procedures, clients' past...