Jeff on Call: When the Spouse Is Hired

What if there is a signed ‘retingency’ agreement (retainer fee paid with a refund clause in case of non-performance) that goes just fine in the case of the retained position being filled and fully paid, but the candidate’s wife is also hired for another position within the organization, but not paid for?

Facts: Client is a hospital in North Dakota that hired a director of surgical services and his wife. We were paid for the director but not for his wife.

  • Candidate’s wife’s resume was submitted by us, but the client arranged the interview with her directly.
  • Search agreement clause states:

Our fee is always due and payable once you hire/employ or utilize the services of candidates who have been referred either directly or indirectly through our efforts.

  • Client, once notified of fee due, claims that the agreement was solely for the position we were retained for and no other position. His wife was hired for an administrative assistant position with a $24k per year salary, and they said that had they known there would be a fee due, they would not have hired her due to the ease of locating someone with this skillset. Of course, the primary candidate’s longevity could have been affected had she not been hired.

Delighted to reply.

Some call it “retingency” and others “container.” They’re two synonymous words designating a hybrid retained-contingency fee search. But the placement law analysis is the same as a “straight contingency fee” arrangement.

Absent a job-specific fee arrangement that states the target position, a full fee is due for each placement.

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In this case, you “referred” the second candidate (the placed candidate’s wife) pursuant to your search agreement by submitting her resume.

If there are no additional facts, that fee is yours!

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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2 Comments on “Jeff on Call: When the Spouse Is Hired

  1. Presuming basic contract law is fully applicable and there really isn’t a dispute about the scope of the agreement, it seems a little too easy of a question: do we or do we not rightfully deserve a fee? Sure, you get your fee and you probably won’t have to go too far to convince a judge or arbitrator to rule in favor of paying the fee. An attempt at using the ignorance defense is a rather childish means for a client to sneak out of paying an invoice. Two things should be noted: If you press the issue and escalate your collection efforts, you can kiss that client good bye. Second, I really can’t think of circumstances where I would want as a client, someone who would attempt to play ball this way. Collect and move on to a new client – do so professionally so as not to damage your reputation.

  2. Maybe the recruiter should have thought this one out a bit first. Sure, legally the fee should be yours but do you really wan to go from being the hero by placing the Director of Surgical Services (and collecting a big fat-fee) to possibly (and it looks like probably) losing the client for a paltry 5-7k fee.

    I would have softly pointed out the financial obligation and then given it to them and focused on discussing their next big search.

    Tom Keoughan
    http://www.toyjobs.com

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