The Lawletter Vol 36 No 1, September 9, 2011
Charlene Hicks, Senior Attorney, National Legal Research Group
The effect a job advertisement posted on the LinkedIn webportal may have on a nonsolicitation clause in an existing contract was recently addressed by the Indiana Court of Appeals in Enhanced Network Solutions Group v. Hypersonic Technologies Corp., No. 02A03-1011-PL-609, 2011 WL 2582870 (Ind. Ct. App. June 30, 2011) (slip op.). The case is notable in that it suggests that an Internet job posting does not amount to a solicitation or an inducement.
Enhanced Network Solutions involved an existing contract between Hypersonic, an advanced software engineering company, and ENS, a company in the business of modifying existing software. Under the contract, ENS agreed to acquire certain services from Hypersonic to serve ENS's own clients. In addition, ENS agreed that if the two companies successfully bid on a joint project, it would authorize Hypersonic to act as a subcontractor. The contract also contained an "employee protection clause," which provided that each party would "refrain from soliciting or inducing, or attempting to solicit or induce, any employee of the other Party in any manner that may reasonably be expected to bring about the termination of said employee[.]" Id. at *1.
LinkedIn is "a social internet site that connects businesses and people." Id. During the contract term, Hypersonic posted an advertisement for an outside sales representative on its LinkedIn webportal. Robert Dobson ("Dobson"), an ENS employee, saw the job posting and became interested in applying for the position. Hypersonic's owner agreed to meet Dobson for lunch. Thereafter, Dobson continued to talk with Hypersonic representatives about the position, and Hypersonic ultimately made Dobson an offer of employment, which he accepted. Dobson quit his position with ENS and began working for Hypersonic as an executive director of sales on May 5, 2010.
On June 22, 2010, Hypersonic filed a declaratory judgment complaint against ENS, seeking a decision from the court as to the enforceability of the employee protection clause of the parties' contract. In interpreting the agreement, the Indiana Court of Appeals noted that the pertinent terms "solicit" and "induce" were not defined in the contract. Id. at *2. The court therefore adopted the dictionary meaning of the words. Black's Law Dictionary defined "solicitation" as the "act or an instance of requesting or seeking to obtain something: a request or petition." Id. (internal quotation marks omitted). "Inducement" was defined as the "act or process of enticing or persuading another person to take a certain course of action." Id. (internal quotation marks omitted).
Based on these definitions, the court found that Hypersonic had not solicited or induced Dobson to terminate his position with ENS in order to accept a job with Hypersonic. Dobson had made the initial contact with Hypersonic after having read the job posting that was publicly available on the LinkedIn webportal. Thus, the court reasoned, "Dobson solicited Hypersonic." Id. at *3. Because "Hypersonic merely followed where Dobson led," the court ruled that Hypersonic had not breached the nonsolicitation clause of the contract. Id.
Although the court's decision centered on the contractual definition of the terms "solicit" and "induce," a point of larger interest arises in connection with the court's characterization of the job advertisement on the LinkedIn webportal. Because the ad was made to the public at large and was not specifically directed to one individual or to a class of employees, the court was disinclined to classify it as a solicitation or an inducement. Based on the court's reasoning, it seems that an employer could safely target certain types of potential applicants simply by posting its job advertisement on a publicly available Internet website, such as LinkedIn.
