In March of 2017, a California court of appeals prohibited the disclosure of an individual’s identity after the individual anonymously posted negative information about his former employer on the website Glassdoor.
Glassdoor, Inc. operates a website that allows individuals to post reviews anonymously about their employment experiences. One such post was published to the website on June 21, 2015 by an individual claiming to be former employee of Machine Zone, Inc. The post included negative comments about the company, including:
- “Management spreads unreal information to both outside VC’s and employees.”
- There is “[t]errible work-life balance.”
- “The company has invested heavily in the platform team (there are 70-80 engineers),” but nothing has been done by the team.
- “The CEO said in the team meeting: I don’t expect products and revenue from the platform team. I only want you can show demos. The platform is only for attracting investments from VCs.”
- The poster would not recommend the company to a friend and the company’s business outlook was “getting worse.”
Machine Zone asked Glassdoor to take the post down claiming that it contained confidential company information that the anonymous individual was prohibited from disclosing as part of a nondisclosure agreement. Glassdoor agreed to remove the post. Machine Zone then filed suit against the anonymous poster in California state court for breach of his nondisclosure agreement. In an effort to determine the identity of the poster, Machine Zone sent a subpoena to Glassdoor requesting a copy of the post that would disclose the identity of the poster. Glassdoor refused. When the trial court ordered Glassdoor to comply with the subpoena and disclose the identity of the poster, Glassdoor appealed the decision to the California Court of Appeal, Sixth Appellate Division.
In Glassdoor, Inc. v. Superior Court of Santa Clara and Machine Zone, Inc., the Court of Appeal reversed the trial court’s decision and entered an order denying Machine Zone’s request to compel the identity of the company’s former employee. First, the Court of Appeal held that publishers, including website operators like Glassdoor, are entitled to assert the First Amendment interests of their contributors in maintaining anonymity. The Court of Appeal then ruled that Machine Zone was not entitled to the identity of the anonymous poster because none of the statements in the post violated the nondisclosure agreement. Specifically, the nondisclosure agreement prohibited employees, including the anonymous poster, from disclosing:
technical information such as know-how, formulae, computer software, logic design, schematics, and manufacturing processes; business information such as information about costs, prices, profits, markets, sales, customers, and vendors; personnel information such as evaluations, salary and compensation data, and private phone numbers; and information relating to innovative activities, such as inventions, research projects, plans for future development, and patent strategy.
The court ruled that the above comments, including references to a “platform team” were too vague to reveal information to the public about Machine Zone’s confidential business plans or technology. As a result, Glassdoor was not required to reveal the poster’s identity because Machine Zone did not have a valid claim against the individual.
This opinion should serve as an example of the specificity needed to support a claim for breach of an employer’s nondisclosure agreement. Companies that seek to hold current or former employees liable for posting the company’s confidential business information on public forums should be sure they can point to specific language in the post that conveys information that the company has taken measures to protect from public disclosure.