Trademark Law Can’t Stop Competitor’s Employee Recruitment Efforts–XPO v. R+L
Con-way and R+L compete in the freight business. XPO bought Con-way, and the acquisition sparked apparently non-speculative concerns that some Con-way employees would be laid off (which layoffs did indeed ensue, e.g., 1, 2). Before any definitive layoff plans were announced, R+L set up a website at “conwaylayoffs.com” advertising that it wanted to hire Con-way employees. Is R+L’s website fair play or illegal poaching? Obviously employers are free to advertise their job listings, and if Con-way has rattled some employees’ confidence about their future job prospects and views some employees as surplus, it seems like society wins if a competitor has the capacity to pick them up. This is like Econ 101: free markets allocate scarce resources to those who value them most.
But first we have to navigate around trademark law. The court says that the R+L website’s references to Con-way constituted a commercial use of Con-way’s trademark. (I can’t bring myself to wade back into the whole “use in commerce in trademark law” morass we grokked extensively a decade ago). Nevertheless, the court grants R+L’s motion for judgment on the pleadings because the site clearly indicated that R+L was seeking to hire Con-way employees, and
it is clear that Defendants actually did the exact opposite of that which is prohibited by law: it used the disputed marks to distinguish itself and its services from those of Plaintiffs, not confuse them.
This sounds a lot like nominative use, a term the court doesn’t use. The Sixth Circuit (whose law governs this dispute) has cast skepticism on whether the nominative use doctrine even exists in the circuit, so the district court found a way to accommodate an obviously nominative use without using the unsanctioned term. Let’s hear it for judges’ doctrinal jujitsu to navigate around misconfigured circuit doctrine.
The court also tosses Con-way’s ACPA claim because R+L didn’t offer to sell the domain name or purchase multiple domain names, and Con-way’s allegations of bad faith didn’t otherwise clear the Twombly standard.
This case reminded me a little of Robert Half v. Ainsworth. Robert Half’s employment agreement purported to restrict employees from referencing Robert Half’s name in their LinkedIn profile or bio. The court struck down that effort under California’s anti-non-compete law because the provision did indeed hinder former employees’ future competitive efforts. Similarly, Con-way’s trademark claims seemingly sought to slow down its competitor. Could R+L have picked a different domain name? Sure, but its domain name choice was both clear to the target audience and part of an initiative to make the labor market more efficient. So I look at this case and the Robert Half case as good reminders that competitors can and do use trademark litigation to thwart employee mobility. It’s great the judge didn’t go for Con-way’s trademark gambit, but the fact that Con-way brought the lawsuit at all (and worse, that R+L removed the website in response to Con-way’s C&D) highlights trademark law’s capacity to interfere with competitive (labor) markets.
Case citation: XPO CNW, Inc. v. R+L Carriers, Inc., 2:16-cv-10391-RHC-SDD (E.D. Mich. Sept. 14, 2016). XPO’s amended complaint.
Also possibly related: Union Organizers’ Activist/Gripe Sites Don’t Support Trademark Claims–Cintas v. Unite Here