Making First Referral No Help to Illinois Recruiter

It was the classic “Who’s entitled to the fee?” dispute. On September 22, 1999, Agri Associates, an Illinois recruiting firm, one of a number of recruiters who had previously been contacted by Hintzsche Fertilizer, Inc. about a job opening for a controller, faxed the resume of Larry Kakacek to Hintzsche. The recruiter had previously sent Hintzsche a pamphlet containing a fee schedule providing that its fee was twenty-five percent of the employee’s first year’s earnings for recruiting a candidate that an employer hired.The next day, Hintzsche telephoned the recruiter and informed it that it was not interested in hiring Kakacek because the fertilizer company was looking for candidates who were located closer to its offices and who had a lower salary.About three weeks later, on October 12, 1999, Rich Connell, a recruiter with another firm, faxed Kakacek’s resume to the same individual at Hintzsche for the same position. When Hintzsche called the second recruiter to again tell him to reject the candidate for the same reasons he gave the first recruiter, the second recruiter responded that Kakacek was anxious to find a new position and might be willing to take a pay cut. Connell arranged an interview between Kakacek and Hintzsche and as a result, Kakacek was hired for the controller position. Hintzsche paid Connell a fee.In January 2000, Agri-Associates called Hintzsche and learned that it had hired Kakacek. Agri-Associates told Hintzsche that it was entitled to a recruitment fee for the services that it had provided, and the employer responded that he did not recall receiving Kakaeck’s resume from Agri-Associates, and that he did not believe Agri-Associates was responsible for the hiring of Kakacek. Of course, Agri-Associates sued.The trial court dismissed Agri-Associates’ complaint and in Michael J. Vinzenz d/b/a Agri-Associates vs. Hintzsche Fertilizer, Inc., the Second District Appellate Court of Illinois agreed in a decision rendered on January 27, 2003.In ruling that the agency which made the initial referral was not entitled to a fee, even though the second referral was made only three weeks later, the Appellate Court referred to the previous Illinois case of Snedden vs. General Radiator Division of Chromalloy American Corp. In Snedden, the Court defined four criteria which a recruiter must meet to be entitled to its fee as follows:

  • The agency must have discussed the applicant with the employer.
  • The employer must have agreed to interview the applicant.
  • The applicant must have agreed to interview with the employer.
  • The agency or the employer must have set the arrangements in motion for the interview.

The Court noted that even though all four criteria were satisfied in this case, Agri-Associates was not responsible for the second, third, and fourth criteria being met. “We realize,” the Court said “that, strictly speaking, the other Snedden criteria were ultimately satisfied. However, plaintiff did nothing to satisfy these criteria. Rather, it was the other agency that was the motivating force in satisfying the other criteria.” Accordingly, the Court ruled that Agri-Associates was not entitled to a fee even though it initially referred the candidate who was hired.In the absence of specific contract language to the contrary, we believe that most courts will follow the reasoning of the Illinois court, and take the position that a recruiter must show a causal relationship between its actions and the hiring of the candidate. Recruiters who believe that they should be entitled to a fee merely by being the first recruiter to refer a candidate, should be prepared to prove, by specific contract language, that their client has agreed to that concept.

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