A New York State Court judge on Long Island has held that a former employee has a First Amendment right to disseminate his claim that his former employer had lost personal data about its customers.
The case arose from an employment dispute. In July, 2008, Cambridge Who’s Who Publishing (“Cambridge”), a Uniondale, Long Island -based company offering networking and marketing services for business professionals, hired Harsharan Sethi as its director of management information systems. At the time of his hire, Mr. Sethi signed a non-disclosure agreement which restricted him from using client names, addresses and credit card numbers in any manner not connected to the company’s business.
In February, 2010,Cambridgefired Mr. Sethi, and a few months later sued him for breach of contract and libel, seeking $15 million in damages. In its lawsuit, the company accused Mr. Sethi of engaging in verbal and written attacks upon the company since his termination. It also alleged that Mr. Sethi intentionally and falsely accused Cambridge and various employees of criminal conduct, as well as violating civil laws.
In particular, the lawsuit accused Mr. Sethi of setting up a number of websites which claim that customers might be legally entitled to a refund, and accusing the company of various scams. In addition, according to the company’s lawsuit, Mr. Sethi e-mailed the consumer frauds bureau of the New York Attorney General’s Office in October, 2010, and raised concerns about the potential loss of personal data from 400,000 of Cambridge’s customers. The company denies that it lost any customer data.
As part of its lawsuit,Cambridgerequested that the court issue an injunction, enjoining Mr. Sethi from soliciting customers or disclosing customers’ personal information. In addition, the company asked the court to order him to refrain from stating that the company had lost customers’ personal data.
While the court granted the company’s request for an injunction directing Mr. Sethi to cease soliciting its customers or disclosing their personal information, it denied Cambridge’s request to enjoin him from making his accusations against the company. In refusing to do so, the court held that his communications are protected by the First Amendment.
The lawsuit, which includes a $20 million countersuit by Mr. Sethi, is still pending.