State Personnel Recruiting Services Board v. Horne

732 S.W.2d 289, 1987 Tenn. App. LEXIS 3175
CourtCourt of Appeals of Tennessee
DecidedApril 3, 1987
StatusPublished

This text of 732 S.W.2d 289 (State Personnel Recruiting Services Board v. Horne) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Personnel Recruiting Services Board v. Horne, 732 S.W.2d 289, 1987 Tenn. App. LEXIS 3175 (Tenn. Ct. App. 1987).

Opinion

OPINION

CANTRELL, Judge.

Acting on a complaint filed by the Tennessee Personnel Recruiting Services Board, the Chancery Court of Davidson County enjoined the appellant from operating an Executive Search Firm without the license required by T.C.A. § 62-31-101, et seq. The appellant contends that the act as applied to him violates his constitutional rights to due process, equal protection, and the freedom to contract.

In 1984 the Tennessee legislature passed the Tennessee Personnel Recruiting Services Act which requires all persons conducting a personnel recruiting service to obtain a license from the Tennessee Personnel Recruiting Services Board. T.C.A. § 62-31-105. A personnel recruiting service is defined in the act as any person who for a recruiting fee or other compensation: (A) places or attempts to place candidates seeking employment; (B) recruits or attempts to recruit employees for employers seeking candidates; (C) purports to have access to job leads; or (D) performs outplacement services. T.C.A. § 62-31-102.

The appellant operates a firm that performs retainer-based executive search and outplacement counseling. A retainer-based executive search firm works on retainer for employers who are seeking qualified executives. The search firm receives payment regardless of whether a suitable candidate is found. In performing outplacement services, the search firm seeks employment for an employee who has been discharged by the client-company.

The appellant’s firm usually deals with the director of personnel, the senior vice-president, or the president of the client-company. The positions which the search firm seeks to fill usually carry a salary in the range of $30,000 to $150,000 a year. Unlike the typical employment agency, the appellant does not have any contract with the job candidate; the appellant’s sole contractual obligation is to the company that employs him.

The appellant asserts that as applied to his business the provisions of T.C.A. § 62-31-101, et seq., have no reasonable relationship to the maintenance of public health, safety, morals, or welfare, and, therefore, the act impairs his right to contract, deprives him of the equal protection of the law, and takes his property without due process of law. In this assertion the appellant has stated the limits on the power of the state to enact legislation that regulates the conduct of an otherwise legitimate business.

[T]he Legislature of the State cannot prohibit an ordinary business but it may, however, regulate the business to promote the health, safety, morals or general welfare of the public. The guarantees of the Constitution imply the absence of arbitrary restraint, but not immunity from reasonable regulations and prohibitions imposed in the interest of the people of the state. Ford Motor Company v. Pace, 206 Tenn. 559, 335 S.W.2d 360, 362 (1960).

Stated differently, the appellant’s position is that his business is such an ordinary calling or business pursuit that it falls out[291]*291side the scope of regulation by the state under its general police power. See Livesay v. Tennessee Board of Examiners in Watchmaking, 204 Tenn. 500, 322 S.W.2d 209 (1959); State v. Bookkeepers Business Service Company, 53 Tenn.App. 350, 382 S.W.2d 559 (1964). The state’s power has been described in the following terms:

“This police power ... embraces all matters reasonably deemed necessary or expedient for the safety, health, morals, comfort, domestic peace, private happiness, and welfare of the people.” McKesson & Robbins, Inc. v. Government Employees Department Store, Inc., 211 Tenn. 494, 365 S.W.2d 890, 892 (1963).

Thus we come back to the original question: Does the legislation in question promote the public health, safety, domestic peace and welfare? In answering this question, we start with a presumption that it does, i.e., that the act is constitutional. Tennessee Board of Dispensing Opticians v. Eyear Corp., 218 Tenn. 60, 400 S.W.2d 734 (1966). The burden of proof rests on the one attacking the statute to show otherwise. State ex rel. Maner v. Leech, 588 S.W.2d 534 (Tenn.1979). The act will be upheld if it can be justified upon any rational ground McConnell v. City of Lebanon, 203 Tenn. 498, 314 S.W.2d 12 (1958), if any possible reason can be conceived to justify it, or if the reasonableness of the act is fairly debatable. Phillips v. State, 202 Tenn. 402, 304 S.W.2d 614 (1957).

In our opinion the appellant has failed to carry his burden of showing that the act is unrelated to the preservation of the public health and welfare. While it is true that the appellant performs most of his services under contract with large businesses, he does hold himself out to a substantial segment of the public as one having expertise in finding applicants for the positions held by his clients. The proof of that expertise is in performance; we are not persuaded that the appellant would remain in business long if he never filled one of the positions he was retained to fill. Therefore there exists a compulsion to find suitable candidates and persuade them to accept the positions offered by the appellant’s clients. A decision to accept one of those positions is of such magnitude that it should be free of any hint of misrepresentation or coercion. The act in question imposing ethical duties and responsibilities on firms such as that of the appellant results from a legitimate effort by the legislature to protect the public welfare.

The appellant also complains that the act contains arbitrary and impermissible classifications because it does not cover:

(1) Agencies engaged solely in the procurement of employment for public school teachers and administrators;
(2) Employment services established and operated by the state, any political subdivision of this state, or the United States;
(3) Labor union organizations;
(4) Musician booking agencies;
(5) Nurses registries; or
(6) Temporary employment service contractors.

In Knowlton v. Board of Law Examiners of Tennessee, 513 S.W.2d 788

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Related

McDonald v. Board of Election Comm'rs of Chicago
394 U.S. 802 (Supreme Court, 1969)
State Ex Rel. Maner v. Leech
588 S.W.2d 534 (Tennessee Supreme Court, 1979)
Ford Motor Company v. Pace
335 S.W.2d 360 (Tennessee Supreme Court, 1960)
Phillips v. State
304 S.W.2d 614 (Tennessee Supreme Court, 1957)
Livesay v. Tennessee Board of Examiners in Watchmaking
322 S.W.2d 209 (Tennessee Supreme Court, 1959)
State Ex Rel. State Board of Accountancy v. Bookkeepers Business Service Co.
382 S.W.2d 559 (Court of Appeals of Tennessee, 1964)
Tennessee Board of Dispensing Opticians v. Eyear Corp.
400 S.W.2d 734 (Tennessee Supreme Court, 1966)
McConnell v. City of Lebanon
314 S.W.2d 12 (Tennessee Supreme Court, 1958)
Knowlton v. Board of Law Examiners
513 S.W.2d 788 (Tennessee Supreme Court, 1974)

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Bluebook (online)
732 S.W.2d 289, 1987 Tenn. App. LEXIS 3175, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-personnel-recruiting-services-board-v-horne-tennctapp-1987.