When a Tulsa staffing firm sued its largest client and a competitor, it was a shot that surprised the staffing industry.
“This is the first case we’ve seen in quite a while,” says Edward Lenz, senior vice president, public affairs, and general counsel for the American Staffing Association. While finding and retaining good workers is getting tougher than ever for staffing companies, Lenz observes that suing a competitor for recruiting your workers is “somewhat of an anomaly.”
“Lawsuits in the area,” he adds, “have not been notably successful.”
In Tulsa, AcctKnowledge filed suit against IBM and Manpower within days of being told the computer giant was consolidating its financial staffing services through Manpower. The suit filed in federal court in Oklahoma alleges a number of contractual violations and claims Manpower attempted to poach AcctKnowledge’s workers when it sent recruiters to stand outside IBM’s Tulsa offices with invitations to informational sessions.
Tammy Been, general manager of AcctKnowledge, told us she is indignant over the way the termination was handled, but her biggest issue is with the 89 workers – half her workforce – that were placed with IBM. “What I’m most concerned about is that they have to go with Manpower,” Been says. “Don’t take my people.”
The court, according to the Tulsa World, issued temporary restraining orders against both IBM and Manpower directing them not to contact or communicate with AcctKnowledge employees working at IBM. Temporary orders are typically issued by a court to preserve the status quo until it has a chance to review the merits of the case.
While that may be some comfort for AcctKnowledge, the staffing firm is not getting support from the industry. One observer acidly commented that the lawsuit says more about AcctKnowledge’s lack of understanding of the rules of the game than it does about any ethical breach.
“Really what this demonstrates is the flawed knowledge that AcctKnowledge comes to the market with,” says Master Burnett, managing director of recruitment consultant Dr. John Sullivan & Associates. Consolidating staffing services is not unusual, Burnett explains. Though it is usual for the company to conduct the informational meeting for the affected workers, Burnett’s view is that Manpower’s sidewalk recruiting “did not cross the line.”
“It is in the best interest of the employee to do what Manpower did,” offers Burnett. “They did the same thing every other company would do.”
Whatever the contractual issues in the case, Philadelphia lawyer Jim Matthews, co-chair of Fox Rothschild’s labor and employment practice group, says workers have a right to seek work with whomever they want. And companies, generally, have a right to recruit whomever they choose.
In this area of law, he explains, it’s very much the facts of the situation that dictate whether an employer may be held liable for wrongly interfering with a business relationship. In staffing cases, that would be efforts by one company to recruit the workers of another.
While, he says, the “tactics very much can make the difference,” distributing informational fliers, invitations to interview and the like are fair game. With recruiters becoming ever more aggressive as a result of the tightening labor market, Matthews suggests they apply this handy rule: “If you would be uncomfortable explaining what you are doing to Morley Safer (of 60 Minutes), don’t do it.”
Manpower declined to be interviewed for this article, but issued a statement noting:
“Business is won and lost every day in the highly competitive employment services industry. Contrary to allegations raised by a recent lawsuit, it’s normal for contractors at an incumbent firm to be recruited by a new firm when a client transitions from one employment services provider to another… The practice of recruiting during a client transition keeps the contractors gainfully employed while ensuring that their expertise continues to be available to the client.”
Neither IBM nor a second staffing that has since also filed suit, Accounting Principals, returned phone calls.