Jeff On Call: Should I Sign a Client’s PSA

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Q: Should I sign a client’s PSA (Placement Service Agreement)?

There’s some good news here. There is a common law rule that states: Any ambiguities in a contract will be construed against the maker. Common law rules are the common-sense, judge-made laws applied before we had statutes in America. They are the basic rules that have been codified into statutes by the legislatures in many states.

Some PSAs are so draconian that I advise clients to sign them without objection, since they can’t be enforced.

The most questionable provisions tend to be:

— Requirements that earned fees must be returned if a recruiter attempts to solicit from the client. (It is impossible to prove “solicitation”, this is clearly a punitive measure, and it’s one that no employer has ever successfully enforced.

— Strict compliance with “deal only through human resources” mandates where managers communicate with the recruiter. (In those cases, the client has impliedly or expressly waived its rights by conduct. A waiver is the voluntary relinquishment of a known right.)

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— Searches for specific positions when the client communicates about others. Again, a waiver of the client’s right by conduct.

— Any kind of liquidated damages clause requiring payment of a specific amount upon the occurrence of some event. To be enforceable, it must be reasonable and unable to be ascertained otherwise. These are overwhelmingly rejected by the courts, since they are invariably excessive.

— Anything in a contingency-fee arrangement where no fee has been paid. The contract is illusory, nudum pactum — without consideration.

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To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing contained herein should be construed as legal advice. It is for your information only.

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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