Placements & The Law

Recruiters are shocked to learn how the court system really works. They think that if they’re “right,” they’ll win. They’re wrong, though.

In the introduction to The Employee Termination Handbook, I noted:

The public has the impression that a court is like a giant automated teller machine. Just plug in the right facts and law, and the cash will appear. Trial lawyers are disabused of this impression rather violently during their first court appearance. This is the difference between science and art in the practice of law. The proof and interpretation of the law are critical.

The collection process provides an excellent example of the difference between “making a placement” and “collecting a placement fee.” It’s a matter of understanding the impact of truth, timing, and turncoats at the trial.


The truth about the facts leading up to the placement doesn’t matter. “Truth” and “justice” are closest to each other on the front of the courthouse. Unfortunately, lawsuits are tried inside. Let’s assume you made the placement yourself (so there’s no question about what really happened) and:

a. The hiring authority called you with a job order.
b. You thoroughly cleared the fee (using an example, confirming it, etc.).
c. You sent your standard fee schedule to the hiring authority.
d. You presented a candidate and the hiring authority wanted to see a résumé.
e. You obtained a résumé from the candidate and sent it to the hiring authority.
f. You called the hiring authority and set up an interview.
g. You called the candidate and confirmed the interview.
h. You called the hiring authority after the interview and discussed the candidate.
i. You called the candidate after the interview and discussed the job.

Then it happens:

j. You discover a “placement in the basement” – the candidate is hired without your knowledge.

You go through the usual “congratulations” calls and letters to everyone. But you’re not ecstatic enough to make a gift of your fee.

What went wrong? Nothing! If the truth could get you paid, there would be no problem. Your referral was the procuring cause (or at least the substantial cause) of the hire. Courts don’t respond to truth, though. They respond to proof. Sure, they’re concerned with “finding the truth.” They just don’t respond to it unless you can prove it.

A destroyer employer with a cooperative candidate can drive a Mercedes truck through our scenario. This is because under any recognized theory, you must at least show that:

a. Your act of referring the candidate
b. Motivated the employer to hire the candidate, and
c. It knew that a fee would be owed to you if it did.

Now, let’s assume that the candidate’s résumé was in the employer’s database (or that it magically appeared there). How can you prove that your referral motivated the hiring authority? You can’t.

You argue that “but for” the referral, the hiring authority wouldn’t have known about the candidate’s availability. No problem – “but for” reviewing old résumés, the hiring authority wouldn’t have called him. Or “but for” an employee referral. Or “but for” response to an advertisement.

Of course, you could have initially asked the hiring authority if they were considering anyone. Then you could have asked the candidate whether his or her résumé had been submitted to any employers. And you could have written letters to each of them confirming that they didn’t know about each other.

Judges lecture about things like this when they’re not lecturing about the wonders of signed fee schedules. It’s not justice; it’s justification. Hind-sight to justify judgment for the “job orderer.”

Almost everyone who takes the witness stand believes they’re telling the “truth.” In fact, if you gave them lie detector tests, they’d probably pass. There’s such a difference in perception among human beings.

As soon as the next visitor to your office leaves, ask your staff to write down what the person was wearing. Everyone will write something different. In fact, some of them may think “he” was a “she.” And it’s unlikely that any of them will be much more accurate than if they just guessed.

Placements are hundreds of times more complicated, they occur over an extended period, and disputed facts may not be unraveled until years later. The possibilities for misinterpretation and inconsistency are infinite.

It’s their word against yours, you say. Not quite. There are more of them. They’ve got the documentation (or can get it with a little creativity). And you’ve got the burden of proof by a pre-ponderance of the evidence.

Perhaps now you’ll see why experienced trial lawyers know that truth easily lulls clients into a false sense of security. Donald Smith told us why in And They Also Kick You When You’re Down:

The study of contract law never seems to cover the idea of desperation. . . . The rules of sportsmanship do not apply when one contestant is caught in quicksand. People have lost their jobs . . . for telling the truth. It can indeed be very painful.

Of course, tell the truth. But recognize that you must prove it.


We’ve already discussed how the passage of time distorts perception. Time is also a problem because your value to the employer and candidate decreases as the clock ticks. It starts clicking when you make the presentation. You fade fast when you furnish contact information. Then, when the candidate is hired, you’re history. At that point, the employer either pays or tries to figure out ways to avoid paying.

They’re easy to figure out, too. When you consider that most placement files don’t contain any acknowledgment by the employer of the presentation, send out, introduction, or interviews, it’s depressing enough. But less than 5% of those we see contain any acknowledgment of the fee!

The average candidate walks on water. But once they become an employee, they start to sink. You’re not there to rescue them. If you doubt it, call any hiring authority and ask what they don’t like about the candidate. Wait until your guarantee period expires, though. It’s not that you don’t place qualified candidates – this is human nature.

So is fee avoidance once the candidate starts to sink.

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The average case takes 2.4 years to get to trial, and the average candidate leaves his or her job every 2.4 years. You can see how likely it is that your candidate will sink or swim away (along with your fee).

Consider also:

a. Transfer of the candidate (out of the jurisdiction of the court)
b. Transfer or termination of the hiring authority
c. Termination of your not-so-cooperative consultant
d. Insolvency or bankruptcy of the employer
e. Change in corporate structure of the employer

Time is always on the debtor’s side. This is particularly true in the placement process. Almost any change in circumstances weakens your position.

You must move to collect and refer the matter to your lawyer as fast as you can. Then your lawyer should accelerate the lawsuit. This can be done by:

a. Pre-judgment attachment (to “freeze” assets pending trial)
b. Injunction (to prevent moving assets out of the jurisdiction of the court)
c. Priority in trial setting (by using theories entitled to preference, “short cause” time estimates, etc.)
d. Summary judgment (based on undisputed facts)
e. Waiving a jury trial (juries don’t identify with consultants anyway)
f. Bifurcating (severing) facts or law for adjudication
g. Stipulating (agreeing) to undisputed facts or law
h. Requesting orders shortening time (based on dissipating assets – theirs, not yours)


These are honest hiring authorities and candidates who unconsciously change their stories to suit their employers and themselves.

Francis Wellman noted how being called as a witness causes people to turn their coats in The Art of Cross-Examination:

[W]itnesses usually feel more or less complimented by the confidence that is placed in them by the party calling them to prove a certain state of facts, and it is human nature to try to prove worthy of this confidence.

The feeling is unconscious on the part of the witness and usually is not a strong enough motive to lead to actual perjury, but it serves as a sufficient reason why the witness will dilute or color the evidence to suit a particular purpose, and perhaps add only a bit here or suppress one there. This bit will make all the difference in the meaning – Many witnesses experience a sudden dread of being considered disloyal.

Even giving them the benefit of the doubt, witnesses facing job loss easily contract “sudden dread.” We wonder how many have turncoated since The Art of Cross-Examination was written in 1903.

There are formal pre-trial ways to lock in the testimony of these witnesses: depositions (oral questioning), interrogatories (written questioning), and other discovery devices. Despite their name, they don’t actually discover; they annoy, program, and educate the witnesses. Practice makes perfect for trial. Just like rehearsing for interviews.

The primary value of discovery devices isn’t discovery anyway – it’s to obtain documentation of prior inconsistent statements. These aren’t used as evidence to prove the case, but to impeach the credibility of witnesses who change their story on the stand.

Preventing turncoat testimony is best accomplished before a lawsuit is even filed. That’s when the facts are fresh in the witness’s mind, you’re still friends, and there’s less pressure to fabricate. A simple letter is fine – no notarized affidavits, declarations under penalty of perjury, or subpoenas.

Here’s how the Federal Trial Handbook says to use it:

[T]he witness may be asked to defend or otherwise explain the inconsistency between his prior and his present version of the events in question, thus opening himself to full cross-examination at the trial as to both stories . . . If the witness admits having made the prior inconsistent statement, no further proof is necessary. (48 FTH2d 575)

Witnesses deny oral inconsistent statements. That’s why a short factual note is better than a long testimonial speech.

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; email The Placement Strategy Handbook and other books on search and placement can be purchased at:

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


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