Employment Hero is taking one of its own investors to court, accusing Seek of anticompetitive behaviour after the recruitment giant moved to terminate the startup’s access to a key integration.
Founded in 2014, Employment Hero provides payroll, HR, and recruitment software to small and medium-sized businesses. One of its key features is the ability for customers to post job ads directly to Seek from within its platform — a convenience powered by Seek’s job posting API.
As first reported by The Australian Financial Review (AFR), Seek has given notice it will shut off that access on August 25. Employment Hero is now seeking an interim injunction from the Federal Court to stop the termination, warning the disruption could affect thousands of small businesses.
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Seek API termination prompts Federal Court action
Employment Hero confirmed it received formal notice from Seek in late June that the integration would be shut off on August 25. The company says this termination, involving a widely used API, has forced it to take legal action in the Federal Court.
“Seek has provided notice to terminate its API agreement with Employment Hero,” the company said in a statement to SmartCompany.
“Seek is a critical integration for many customers and our foremost priority is continuity and confidence for every employer.
To this end, we have reluctantly commenced Federal Court proceedings to apply for an interim injunction with the aim of stopping the termination.”
We consider that the termination was a breach of the competition laws. As the matter is now before the Court, we are unable to comment further.
In response, a Seek spokesperson told SmartCompany the company would not comment on the specifics of the case but confirmed it intends to defend the action.
“Seek notes the action filed on Friday. Given there are now active legal proceedings, we will not comment on the substance of the allegations, beyond noting that we intend to defend them.
At a more general level we note again what we have said in many strategy presentations: Seek operates in a highly competitive market with many competitors, from multi-nationals to start-ups, and believes that the vibrancy of competition generates innovation that is very beneficial for all customers.”
Employment Hero points to growth of SmartMatch platform
In a blog post published on June 25, Employment Hero co-founder and CEO Ben Thompson said the API had been a longstanding part of the platform, describing Seek as a “Gold Partner” and stressing the company was “advocating on your behalf to preserve choice and progress for our customers”.
“While we understand Seek is a preferred option for many of you, Employment Hero continues to offer a number of recruitment tools for customers,” Thompson wrote.
He also encouraged users to try SmartMatch, the company’s own AI-powered hiring tool, which allows employers to search a closed talent pool without paying listing fees.
Thompson also contrasted Employment Hero’s direction with Seek’s, saying the recruitment giant appeared to be “doubling down on paid listings,” which “may serve investors in the short term, but does not serve employers who are already managing rising operational costs”.
According to the AFR, the legal dispute comes despite a longstanding investor relationship between the two companies.
Seek first invested in Employment Hero in 2018 via its venture arm, now known as the Seek Growth Fund, and managed independently by Seek co-founder Andrew Bassat.
Earlier this year, the fund sold a $95 million stake in Employment Hero to buyout firm KKR, while Seek retained a “meaningful stake” in the business.
