Placements and the Law

Send-out to A, Hire by B: Intercepting the Forward Pass

The “forward pass” happens all too frequently:

1. Employer A agrees to pay the fee.
2. You present the candidate.
3. Employer A gives the contact information to Employer B; and
4. Employer B hires the candidate.

Where are you? In the stands without a seat. But wait – according to the rule book, for every wrong there is a remedy. Where’s your team spirit? Let’s march right down onto the field as though it was halftime and see who we can blitz:

LIABILITY OF EMPLOYER A

If A had hired the candidate, no problem. You and A were in “privity of contract.” The problem is how to catch A in the wrong team’s huddle.

One way that is often used is a statement in your fee schedule that reads something like:

The fee shall be due if a candidate we refer is hired, directly or indirectly, by the client or through any subsequent referral.

The problem here is that the “client” (A) actually received no benefit. It was just shuffling paper, or trying to help the candidate. A legally enforceable contract requires an exchange known as consideration. A gratuitous act is not sufficient. The words sound good and might be persuasive, but if your lawyer attempts to sue for breach of contract without more, you’ll be much happier if he or she took the case on a contingency-fee basis. At least that way, you won’t be paying attorney’s fees for the foul. The employer’s maybe, but not yours.

The remedy is there. In fact, there are two of them:

The first one is fraud. Your problem here is proving that A intended to deceive you by passing along the résumé. A must have known you were the source at the time of the forward pass, and acted maliciously. That’s pretty heavy. It’s unlikely you’ll be able to meet your burden of proof by a “preponderance of the evidence.” Use fraud, though. It helps knock the wind out of the As of this world.

The second remedy is conspiracy. Whenever two or more parties agree to something you don’t like, it’s probably a conspiracy. They don’t have to expressly agree. You don’t have to prove that A wrote a letter to B saying, “Here’s a forward pass. Go for it!” It’s enough that they implicitly agree. The burden of proof is met by just demonstrating how the pass is executed. A and B start fighting, and one of them is bound to kick the other “where the padding won’t help.”

The value of fraud and conspiracy is not only that they sound so bad. They invoke punitive and exemplary damages. For a viable business, this means unlimited exposure, far beyond the mere compensatory damages of your placement fee. And if A or B is held liable, even bankruptcy won’t wash out the uniform’s stains. They goof up credit, expose the principals of a corporation personally, and are a public record of wrongdoing. They’re the 15-yard penalty.

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LIABILITY OF EMPLOYER B

Without A (whom you might not want to name as a defendant), there’s no way to allege conspiracy against B with a straight face. For this reason, the Bs of the world tend to smile a lot. (Who me, what fee?) But there’s another way to make them B-lievers in that old saying about a remedy for every wrong. It’s called quasi-contract.

Let’s assume the worst case: B didn’t even know A received the candidate from a recruiter. The analogy would be a spectator physician who provides emergency treatment to an unconscious football player. Even worse, the patient dies. Now really, how much worse could it be? (Unless, of course, you happen to be the patient.)

The doctor’s in pretty good shape, though. Why? Because the cold patient was (theoretically) unjustly enriched by receiving the treatment without paying for it. His estate is liable for the reasonable value of the services rendered.

The key is not that the patient expected to pay. The patient didn’t expect anything. He was unconscious. The doctor expected to be paid. No doubt about it. You expect to be paid, too. Zap B by naming it as a defendant, and you will reach the goal line. (66 AmJur 23)

If B says it knew nothing about where the ball came from, you can always argue that it was under a duty of inquiry, or should have known through its interviews with the candidate. We’re not talking about catching a cold here; we’re talking about catching a football. And keeping it without paying the rightful owner.

Under quasi-contract, you’re entitled to the reasonable value of your services in referring the candidate. What’s reasonable? Why there it is – right in your fee schedule! Regardless of any magic words on the schedule, you can still be paid the full fee as the (very) reasonable value of the placement. It’s a great blitz.

Jeffrey G. Allen, JD, CPC, turned a decade of recruiting and human resources management into the legal specialty of placement law. For over 32 years, Jeff has collected more placement fees, litigated more trade-secrets cases, and assisted more search and 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 many best-selling books in the career field. He can be reached at: Law Offices of Jeffrey G. Allen, 10401 Venice Blvd., Suite 106, Los Angeles, CA 90034; (310) 559-6000; or via email at jeff@placementlaw.com. The Placement Strategy Handbook and other books on search and placement can be purchased at www.searchresearchinstitute.com.

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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