HR Says No Contract, No Solicitation, So No Fee. What Can I Do?

Hello Jeff,

Thank you for your Fordyce Letter articles you have provided over the years, we have a question for you.

We candidate marketed to a company hiring authority (HA) who was interested in the candidate and asked for  a copy of the resume, which we sent, omitting the name and contact info, with a copy of our fee agreement.  The HA must have taken this up with human resources, because the HR person calls us to say she figured out who the candidate was and because we

  • Did not have a contract, and
  • The company has a non solicitation policy

they were not liable for a fee and we were not a representing agent.

The company in turn called the candidate, interviewed, made an offer and the candidate accepted and started.

We sent an invoice for services rendered, letting them know we were solicited by the HA who requested the resume, but to no avail.

We feel that we had an oral agreement (contract) with the HA and/or, what we have been told, a detrimental reliance.  Your thoughts on this matter would be appreciated.

Regards,

Jim Iden, CPC

Houston

Jeff’s Advice

Hi Jim,

It’s my pleasure to address the issues in your inquiry. Thanks for sharing them with our readers.

As always in JOC replies, I’m not giving legal advice on any particular case. This is strictly the application of generally accepted legal principles to issues raised. You should consult with your attorney for a specific, thorough review of the facts and law.

Let’s first dispose of that non-solicitation policy asserted by the human resourcer.

Non-Solicitation Notice

Are you sure what it means? Does it mean that recruiters can’t approach hiring authorities? If so, were you on notice of the policy? In advance? How? More importantly, was the hiring authority on notice of the policy?

(Two types of notice here:

  1. Actual – by being told or reading it;
  2. Constructive – by “knowing or should have known” about it.

In the latter case, the employer is charged with notice, meaning notice is imputed (assumed) by the employer.)

Unless the hiring authority told you he was violating a company policy, it appears that he (and therefore the employer) waived (forfeited) its right to object to the policy. Legally, the employer is then estopped (stopped) from asserting it.

There are two phases to every fee-getting referral:

  1. Present, and
  2. Identify.

Fee Agreement Comes First

If you haven’t fully cleared your fee in writing prior to identifying your candidate, you’ve lost your leverage. Now it is you who has waived (forfeited) your right to bind (legally hold) the employer to a contract.

The detrimental reliance issue you raised may apply, but only if you can establish an expressed or implied promise on the part of the employer. If it’s oral acceptance from the hiring authority, you know how far that will go in meeting your burden of proof (by a preponderance of the evidence).

Once you establish acceptance of the fee schedule terms, a properly-drafted fee schedule can obligate the employer to pay upon hire.

That’s why the rule here is:

Always get written confirmation of the fee agreement before disclosing contact information.

“Truth” and “proof” may sound alike, but not to us. They’re far different in placement fee disputes. If you can’t prove fee confirmation, it didn’t happen.

Sleuthing Candidate Clues

Invariably these cases arise because the name, contact information, or “resume clues” (like recent employers, special projects, awards or affiliations) are revealed prior to getting a documented fee agreement.

Article Continues Below

You’re caught in the most common trap that springs when you’re running through the job jungle with a MPC (most placeable candidate). Your objective is to use the candidate as bait so things that sell are mentioned to describe your find. The fee usually isn’t discussed until interest is generated.

Candidate Keywords

Clever HR types pick up candidate keywords once the resume is nursed out of you. Then they go to their ATS (applicant tracking system) and type in the words. The software instantly matches the keywords (particularly when you use the candidate’s own resume and just remove contact and recent employer information) to those in the data base.

This is exactly the same process that’s used when an electronically-submitted resume is scanned. Keywords can be every word on the resume. Things you’d never suspect like dates, job titles, locations, awards received, certifications, colleges attended, courses taken and languages spoken. The more unique the entry, the more accurate the match.

What if there’s no match? Go to the Internet!

Found the name, phone number or e-mail address? Bingo! Just call the candidate,

“Hi, this is ______________ with _______________. We reviewed the resume you posted, and would like to discuss an opportunity with ________________.”

Crawling the Networks

There are even web crawlers now that look for candidate keywords on the social networks! So if some employer’s looking for someone who went to a certain college, belongs to a certain association, attends a certain church, has a certain sexual orientation, or whatever, his mention of it while flirting online finds him. Anything someone can write someone else can read. (Major job discrimination opportunity here, but the information is out there.)

For you, the obvious way to avoid candidate keywords is to assiduously avoid any candidate disclosure that gives the prospective client the opportunity to contact the candidate. This is best done by a phone call. That way, you can be less detailed than if you sent an e-mail with his background (or worse – his resume).

Let’s assume you’ve called and presented the candidate in general terms. Immediately e-mail your fee schedule. Ask for acceptance of the schedule by a return e-mail if the prospect wants further information.

Here’s what should appear in the body of the e-mail:

It was a pleasure speaking to you about the candidate we discussed for the _______________ position open at _______________.

As we discussed, attached is our fee schedule.

If you are interested in interviewing the candidate, please indicate this and your acceptance of the fee schedule by a return e-mail.

That should help you and many others, Jim.

Now, let’s see if you can collect that five-figure fee!

Best regards,

Jeff

More than thirty-five years ago, Jeffrey G. Allen, J.D., C.P.C. turned a decade of recruiting and human resources management into the legal specialty of placement law. Since 1975, Jeff has collected more placement fees, litigated more trade secrets cases, and assisted more placement practitioners than anyone else. From individuals to multinational corporations in every phase of staffing, his name is synonymous with competent legal representation. Jeff holds four certifications in placement and is the author of 24 popular books in the career field, including bestsellers How to Turn an Interview into a Job, The Complete Q&A Job Interview Book and the revolutionary Instant Interviews. As the world?s leading placement lawyer, Jeff?s experience includes: Thirty-five years of law practice specializing in representation of staffing businesses and practitioners; Author of ?The Allen Law?--the only placement information trade secrets law in the United States; Expert witness on employment and placement matters; Recruiter and staffing service office manager; Human resources manager for major employers; Certified Personnel Consultant, Certified Placement Counselor, Certified Employment Specialist and Certified Search Specialist designations; Cofounder of the national Certified Search Specialist program; Special Advisor to the American Employment Association; General Counsel to the California Association of Personnel Consultants (honorary lifetime membership conferred); Founder and Director of the National Placement Law Center; Recipient of the Staffing Industry Lifetime Achievement Award; Advisor to national, regional and state trade associations on legal, ethics and legislative matters; Author of The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide and The Best of Jeff Allen, published by Search Research Institute exclusively for the staffing industry; and Producer of the EMPLAW Audio Series on employment law matters. Email him at jeff@placementlaw.com.

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