That's strange, I can't find any reference to this. Where did you get it?

In Isaacson's biography there's mention of Einstein's visit to Boston, where he defends the value of a college education and he 'fails' one of the Edison-test questions about the speed of sound ('I do not carry such information in my mind, since it is readily available in books.').

A counter argument would be that this ad probably wasn't for the kind of employee Einstein would make. Edison was probably hiring well read, smart folks for regular jobs, not geniuses breaking new ground in narrow scientific domains.

I doubt such geniuses were digging through job ads to apply to Edison's company in the first place. If they were in need of jobs, they would probably be recruited heavily directly from university departments.

So yeah. This ad probably wasn't meant for Einstein. Which gives us no reason to think that "it's a bad ad because even Einstein couldn't solve it".

That was also my reaction to reading the quiz.