2016 Ohio 533
Ohio Ct. App.2016Background
- Definitive Solutions Co. (DSC) contracted to provide design/tech services to Procter & Gamble (P&G); four DSC employees (Sliper, Hunter, Feltner, McClanahan) worked on the P&G account.
- The four employees left DSC and formed Creative Elements Group, LLC (CEG); while still at DSC some solicited P&G and proposed that P&G hire CEG to perform the work.
- P&G received proposals from CEG and began sending account work to CEG; DSC discovered the scheme, fired Sliper, and sued CEG, the employees, and P&G.
- The trial court found the employees and CEG liable to DSC but granted summary judgment to P&G on DSC’s claims for breach of a services agreement (non-solicitation) and tortious interference.
- On appeal, DSC argued P&G violated section 10.4 of the Services Agreement (prohibiting direct solicitation for employment) and acted in bad faith and tortiously interfered by inducing the employees to leave.
- The Court of Appeals affirmed, holding the agreement prohibits only direct solicitation to hire employees as P&G employees (not contracting with another company), and P&G’s conduct lacked the malicious/improper character required for tortious interference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether P&G breached section 10.4 (prohibition on "directly solicit[ing] for employment" DSC employees) | DSC: P&G solicited the employees when it asked CEG (the employees’ new company) to propose work, which amounts to solicitation for employment or work that displaces DSC | P&G: clause bars direct recruitment to become P&G employees; soliciting/contracting with another company is not "solicit[ing] for employment" of that company’s employees | Court: Affirmed for P&G — "directly solicit for employment" means hiring as P&G employees; contracting with CEG is not prohibited |
| Whether P&G tortiously interfered with DSC’s employment relationships | DSC: P&G, as an outsider, maliciously or improperly solicited and induced the employees to leave DSC | P&G: P&G acted commercially—made a business decision after learning DSC was in financial trouble; no evidence of malice or improper coercion | Court: Affirmed for P&G — no malicious or improper interference shown; recruitment/contracting with CEG was lawful |
Key Cases Cited
- Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978) (rules against interpreting contracts to produce absurd results)
- Anderson v. Minter, 32 Ohio St.2d 207 (1972) (tortious-interference claims against outsiders require malicious or improper conduct)
- Littlejohn v. Parrish, 163 Ohio App.3d 456 (2005) (recognizes implied duty of good faith in contracts)
