This week’s inquiry comes from Sean Kirk:

Jeff, thank you for your column and for your time! I appreciate the motivation you give to recruiters like me with all your advice. I have a few simple questions regarding business forms for new contingent-based permanent placement firms starting up. What standard business forms do you recommend recruiters can’t run their business without? How has the job order form evolved over the years and exactly what information do recruiters need to capture within a one page form? Regarding fee agreements, how has this form evolved over the years and what language must be included to ensure a successful business relationship and collection of service charges?

Any advice or specific examples of business forms would be greatly appreciated and warmly received.  Thanks Jeff!

Sean Kirk

Hi Sean,

Welcome to the most wonderful business on earth! Thanks for reading and learning. Helping people get started and succeed in this remarkably fulfilling way of life is so much fun! That’s what we’re all about.

The stratospheric success in recruiting isn’t done by the use of preprinted forms, the Internet, or any structure that limits intuition. So whatever forms you use, please modify them for ease in your specific activity – with your unique emphasis on what you consider important to close deals.

The use of preprinted contracts, fee agreements, and other legal documents can be incredibly expensive. That’s because none of them – even ours – can anticipate changes in the statutes, cases, and administrative rulings that our federal, state, and local governments inflict on recruiters.

That’s why I monitor these documents so closely and notify clients about the changes at no charge. Without this feature, you risk having an unenforceable and possibly even unlawful contract. Considering that the purpose of these agreements is to protect your livelihood in the first place, saving a few dollars now is shortchanging yourself later. When you least expect it, and without even knowing you were doing it.

But I can really help you and the rest of the placement planet people with writing the perfect job order. In fact, that’s the title of Chapter 19 in The Placement Strategy Handbook – “Writing The Perfect Job Order.” It includes our famous 60-question Job Order Questionnaire.

The Questionnaire is too long to include in a JOC column, and I’m afraid someone won’t spring for the $32.50 for the book that has helped more recruiters make more placements than any other. So I’ll just have to give it to you.

To open this gift,

1. Go to www.placementlaw.com.
2. Click the red JEFF’S ON CALL! button.
3. Type Perfect Job Order Questionnaire in the Subject field.
4. Click Send.

I’ll reply with the Questionnaire.

The Placement Strategy Handbook is filled with the forms, techniques, and information that the most successful recruiters use every day. The PSH continues to outsell all other recruiting aids combined because it contains all of the forms, tips, and information necessary to make placements. It is available for $32.50 online at www.SearchResearchInstitute.com. You can also download the order form and fax it to Search Research Institute at (310) 559-6006.

Next,

1. Go to www.placementlaw.com.
2. Click each of the four Placement Law Quizzes on the bottom row (The Placement Fee Collection Quiz, The Trade Secrets Law Quiz, The Placement Manager’s Law Quiz, and The Placement Law Language Quiz).
3. Take each of the four Quizzes.
4. Click the Answers to Placement Law Quizzes button at the end of the bottom row.
5. Grade yourself.

There you have it Sean.

Best wishes for every success!

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

It was introduced in the March 1982 TFL like this:

NEW FEATURE STARTING

Much of our mail confirms the fact that the field of battle upon which we toil is fraught with legal landmines. And who of us hasn’t experienced the frustrations of having to teach our attorneys the basics of our business before they take up the sword in our behalf? Unfortunately, bad advice is the rule rather than the exception when dealing with attorneys who are unfamiliar with the unique character of our business.

With the April issue, we will begin a regular feature entitled “Placements and The Law” authored by Jeffrey G. Allen, B.A., J.D., C.P.C. Jeff, a nationally renowned attorney specializing in placement law, is the senior associate of the offices that bear his name in Beverly Hills and Newport Beach, California. Jeff brings a unique combination of experience to our business, having established, operated, and been a consultant with a number of executive search organizations and general employment agencies. In addition, he has held progressively responsible positions in the personnel and industrial relations field with many major employers.

His columns will bring us a practical and useful approach rather than simply reciting abstract principles of law. As the author of “Placements and The Law Reference Guide,” as a regularly sought-after speaker for all types of groups within our industry, and as one of the recognized authorities in his field, his columns will be as interesting as they are educational.

The body of work that has evolved month after month since then is truly staggering. Through over 300 PTL’s, Jeff’s legal news updates, and his special legal supplements to TFL, our subscribers have learned everything there is to know about placement law.

Today, Jeff is the preeminent attorney in our industry. He has also written more best-selling career books than anyone else in the history of publishing. From Oprah to CNBC, Jeff has appeared in every major media at one time or another.

His credentials, experience and track record transcend his winning legal representation.

Yet he remains our very own accessible, approachable Jeff Allen. A good friend, a trusted advisor, always there, and the ultimate authority on “placements and the law.”

In order to introduce those of you who don’t know Jeff to his work, I decided to do an interview with him and have him share a little about himself.

AH: Is there anything you’d like to say before we start the interview?

JGA: Yes – I’d like to welcome you to the Fordyce family! And I’d like to let our subscribers know how impressed I’ve been with your commitment and desire to keep TFL positioned at the leading edge of the search business. You’ve got the goods to do it. Why don’t you tell the TFL readers why?

AH: Okay. Well, I started off in this industry back in 2002 working in Jon Bartos’ office for about four years as an Internet researcher. When I was hired, one of the first things Jon did was to give me some old issues of The Fordyce Letter from which to learn. So being offered the opportunity to now be the Editor for Fordyce is like everything coming full circle. I am excited to continue on with its rich tradition in the print publication as well as add some new and exciting components, including some neat new stuff to the website. And it’s always a pleasure to meet people in person at the Fordyce Forums. We’re having the next one in Las Vegas next June!

JGA: In working with you, I can already see that you’ll do a terrific job. Again, welcome!

AH: You started writing for TFL shortly after Paul Hawkinson became the publisher. Why do you think the newsletter has been so successful?

JGA: I continued with cutting-edge legal writing, fueled by what we were accomplishing in the success of our subscribers. My friendship with Paul grew along with TFL. We talked by phone almost every day during those early years. He was in St. Louis and I was in LA, but through our business partnership, Search Research Institute, and in our personal dealings, there has never been anything but this great, unbreakable friendship. Anyone who knows Paul understands how flattered I am to call him my best friend.

Now – about TFL.

Paul took Thorne Fordyce III’s little letter and built the publication with three things: rock-solid integrity, unflinching courage, and his amazing desk-up knowledge of contingency-fee recruiting. Every year, he’d go back “in the trenches” and report on his placement travails. It kept him sharp and grounded on what was really happening on Planet Placement.

Commentary, surveys, creative ideas. There were many competitors through the years, but none could match TFL’s investigative reporting, practical training information, and futuristic legal analysis.

AH: So, what exactly is placement law?

JGA: It’s a hybrid between employment, contract and intellectual property law as it relates to the recruiting and hiring process.

As you can see, it’s a function of my background that has formed the discipline.

When a client calls about hiring and firing issues, it’s an employment law matter specific to a placement. If the call is about a collection case, we have a contract/fraud/conspiracy thing going on specific to a placement. If an ex-recruiter uses his or her candidate contact information wrongfully, it’s an intellectual property/trade secrets/unfair competition/fraud/conspiracy/etc. issue specific to a placement.

Analyzing and advising about these things successfully requires a complete understanding of what recruiters do and how they do it. That’s easier said than done, which leads to recruiters paying the law school tuition to the College of Placement Knowledge.

I did placement, I do law. Placement law is what I do because a placement lawyer is who I am.

AH: How did you become a placement attorney?

JGA: I really didn’t plan it that way – it’s what comes from putting one foot in front of another, then looking down and realizing you went from walking to climbing a ladder.

In 1966, we were in the middle of a major recession. I’d just graduated from college in June, and found myself walking the streets of the LA inferno known as the San Fernando Valley, trying to sell klunky, heavy, overpriced Kirby vacuums to whoever had a door. If the soles of my shoes didn’t stick to the welcome mat, I’d enter and start vacuuming the closest mattress.

Then I answered a deceptive ad for a “management consultant trainee”. I had no idea what that was, but it didn’t sound much like vacuum sales. The callback was from an industrial psychologist that did “management consulting.” (Back then, recruiting was considered one step above bank robbing, so “management consulting” was the tag.)

I became a high-biller, then set up and managed a ten-desk office for my boss. I was making technical engineering placements like crazy, but hadn’t a clue what I was jivin’ about. So I interviewed with a high-tech division of Emerson Electric, was hired as an HR rep, caught the eye of corporate, and was on my way. Over the next decade, I became an HR manager with RCA, Whirlpool, Cutler-Hammer, and other major corporations.

As my career progressed, I was fortunate to have great management above me. These international corporations even paid for my night law school education.

Then when I graduated in 1975 and passed the bar exam, the hundreds of recruiters I’d worked with all those years started following me around.

There was some magic back then too. Between HR jobs, I worked a desk for a brilliant fellow who built a large recruiting franchise organization. He had problems with recruiters leaving and unfairly competing.

So I worked closely with his lawyers – teaching them the business as they taught me the law. We won, and won, and won. Then he asked me to write a trade secrets law for our industry. As the president of a trade association, he lobbied for it, and it was passed by the California legislature. Through the years it became known as “The Allen Law”.

Shortly after I started practicing law, my ex-boss came to me with a massive trade secrets case, and we won big. Then Management Recruiters International heard about all of this commotion in Beverly Hills and retained our office to handle a major defection from one of its offices. And we won bigger.

So it went. One success building on the other. One client at a time. Always striving for excellence. A lot like building a recruiting practice – only easier. I call it the “go for what you know” theory of success.

That’s how I became – and how I am – a placement attorney.

AH: What do you mean by the “go for what you know” theory of success?

JGA: My absolute belief is that leveraging some strength is the key to unlimited success. Recruit for jobs that you know and that will become your niche. Find candidates jobs like they had and you’ll place them until they retire.

Look at my background. It’s vertical (except for the vacuum sales). Recruiting, HR managing, more recruiting, writing placement law articles, authoring career books. All traced back to that summer “management consultant” search gig in 1966.

Life’s too short for do-overs. Tomorrow is promised to no one.

AH: You’ve written 24 books for major publishers. How did you become a best-selling author?

JGA: It all started in 1983 when Simon & Schuster asked me to write How to Turn an Interview into a Job.

That was another major recession time, and I was having fun going to TV and radio stations explaining how to nail job interviews. It was helping a lot of people, and I just did it because it worked for them.

I was always fascinated with the sendout-to-offer ratio when I worked a desk. It was always my measure of success. How many sendouts do you need to shake loose one job offer for a candidate. Learn how to lower it, and – Poof! – you’re a search superstar.

So I just converted that into the “interview-to-offer ratio,” and showed the audience what to do in the interview: what to wear, what to eat before arriving, when to arrive, how to greet, what to say, where to sit, how to rap, when to close. I flooded the phone lines on the talk shows and caught the eye of the ABC network. That got me on a national feed across the country and many calls to come back into the studios for more interviewing tips. Listeners were getting offers and calling the station with their success stories.

Then one day, I received a call from the Vice President and Senior Editor of Simon & Schuster. He offered a huge advance (I didn’t even know what an “advance” was), and wanted me on a month-long book tour to kick off How to Turn an Interview into a Job. We wrote the book from my notes. It was an “A” title (meaning S&S put all of its muscle behind it), flew off the shelves, and shot up the charts. I hadn’t even returned from my book tour when my editor approached me with an offer from Parade magazine to write another book, Finding the Right Job at Midlife.

Then a Senior Editor from John Wiley & Sons called me to edit The Employee Termination Handbook. Its success led to many more popular books at the request of Wiley and AMACOM. The three-volume Jeff Allen’s Best series came later as my career books started to become classics.

So when someone asks, “How do you get a book published?,” I answer, “I don’t know.” When he or she asks, “Who’s your agent?,” I answer, “I don’t have one.”

Our industry also knows me by our Search Research Institute references, The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide (with Case Citations), and The Best of Jeff Allen. (The “BOJA” was a 12-pound present from Paul that arrived on our doorstep one day. I had no idea he’d taken all of my writing for decades and turned it into a two-volume, 1,587-page looseleaf encyclopedia of placement law for the world to have.)

AH: Going back to the beginning of our chat, what do you mean by “the Fordyce family’?

JGA: TFL is much more than a newsletter. It’s a friendship – even with new subscribers – that Paul developed and I share.

I’ll pick up the phone and answer an e-mail after hours. All calls and e-mails are returned the same day. Sometimes late.

I don’t apologize for calling late or early if they don’t apologize for sleeping.

AH: How do you have the time to do everything?

JGA: My personal and professional lives merged the day I took that first JO.

I have a wonderful family who puts up with me, clients who have been with my office since they started recruiting, and jobseekers the world over who benefit from my books.

Some day someone will call for me and my assistant will say, “I’m sorry, Jeff has died.” The reply will be, “That’s okay, but I need him to call me as soon as the funeral’s over!”

It’s just how things work in this crisis law practice.

AH: How do you win cases?

JGA: That’s easy. It’s because psychologically I’m still working a desk.

Of course, knowing the law and having the credentials and a reputation don’t hurt.

I know what it’s like to get stiffed by some employer on a placement fee. Or have some bandit rip off my candidate and client files. Or have some candidate try to ensnare me in a discrimination case.

I get calls from people who are often desperate. Helping them is a calling. Nobody else has the experience and the drive to help them. This isn’t my ego talking. That’s just the way it is. I get in there and get the job done.

I talk to employer lawyers with passion. That’s right – I’m passionate about the case. Very visceral about it. I tear into them if necessary because they have no appreciation for the difficulty and skill required to make placements. No frame of reference.

It’s the same with judges and arbitrators. I explain what the fight’s about, and leave opposing counsel with nothing but hollow legal arguments. I “say and convey” an appreciation for what placers do.

Judges and arbitrators listen, then understand, then rule. It’s all about absolute belief transferred from one human being to another.

I was born and raised around the practice of law. My father was a tough New York street fighter, a hard-as-nails negotiator, and a take-no-prisoners litigator. Later in life, he became an ethics law professor. He taught me a lot of big words too.

Lawyers live in an adversary world, but somehow my love for our people has been returned. Go figure. It’s just so amazing.

“Making a placement” sounds so easy. I’ll tell you what’s easy. Criticizing it.

Don’t get me started – you don’t have enough ink.

AH: What are the big legal issues these days?

JGA: We’re handling more fee collection cases lately.

A contingency-fee recruiter is a “spent check” once the placement is made. Then many don’t know how to collect properly, wait too long, and polarize the dispute. So we jump in and get their money.

Trade secrets cases keep us busy too. I’m asked to serve as the attorney, a consultant or an expert witness.

But the big legal issue today is employer-generated placement fee agreements (PSA’s) . We’ll be covering this in the November TFL. I’ll dissect a model PSA, and show subscribers how to negotiate them effectively. It should be very helpful.

AH: What do you see as the future of placement?

Unlike many others, I don’t see any change from the past. Oh, there may be some new computer-matching software or some short-lived burst of hiring in some field. But there’s a reason it’s called “making a placement.”

Recruiters must make it happen every day – finessing one placement after another. In every discipline. At every age, stage, and wage.

It’s really not a business with trends regardless of the unemployment rate. People will always pay for someone to find them a person who’ll do what they can’t, won’t, or don’t want to do themselves.

The basics of making a placement don’t change either. Cold-calling, a positive approach, consistently doing the basics. A sixth-sense about what clients really want, not just what they say they want. If they even know. And they can’t get it without a recruiter.

That’s why the most effective trainers build from the rudiments: How to take a JO (job order), How to recruit MPC’s (most placeable candidates), How to close a deal.

Those aren’t trends either.

The internet is overrated – both as making recruiting easier and as making it more difficult. It’s just a humungous, inefficient, impersonal matchmaker. A recruiter can never harness it, but can only use it. Possibly effectively, but never as a replacement for the incredible intuition and timing needed to close deals.

So the future of placement is bright. Making placements is the future.

AH: Thanks for sharing so much about yourself today, Jeff. We sure covered a lot of ground. Best wishes for 28 more years with TFL!

JGA: Thanks and thanks too for your graciousness. I know you’ll carry on Paul’s tradition of delivering what recruiters need to know!

That is exactly what I thought when I read The Washington Post article by freelance writer Vickie Elmer titled Do Your Own Recruiter Searching Long Before You’ll Be Job Searching.

In my mind it is an instant classic.  One you can use with every single candidate you recruit, or try to recruit, who says, “I’m not looking right now.”

When I hear that, I always wish I could say (scream);  “Did you not just hear what I said?  I don’t care if you are looking for a job right now or not.  Eventually, you’ll need a recruiter with a recruiting specialty in your profession who places at your level, and I AM THE ONE YOU NEED TO KNOW.  So let’s start getting to know one another now so I can help you then, when you need my skill set to advance your career.”

And the truth is, the higher up the food chain these candidates are, the more important it is for them to begin that relationship with a recruiter who has a proven track record in their profession, and at their level, ahead of time.

But they don’t hear what we say, though most of us say things similar to what this article says with every recruit call we make to candidates we are looking to make contact with or put in play.

That’s why, this article, sent as an email or Twitter follow up, might get them to listen, because it comes from another source, a trusted and respected source, one that says what we have been saying for years:

Don’t try to find your recruiter when you urgently need one, take the time to develop a relationship with one BEFORE you need them so they know who you are when you do need them to conduct a confidential career search for you.

I have already sent this article to about two dozen candidates, and not just as a link, which you could do, but in that form it doesn’t extend your brand as much as it could.

We have reformatted it and created a PDF (http://skrentnyspeaks.com/wp-content/uploads/2010/07/Recruiting-Your-Recruiter-WashPost-2010Q3.pdf) to share this article via email that is very similar to this one for our search peers, but it is for candidates with my Jefferson Group Search branding instead.  I do this so my name and my brand remain attached to this good advice, AND so if they share it with anyone else, it is clear who shared the advice originally, and thus increase the likelihood that I get called after it has been shared.  This is especially useful if it was shared with a similarly skilled peer in my niche.

It also helps when they forget who you are, but saved the article.  All your contact information remains right there with the saved article.

I hope you find this new article as helpful as I think it is going to become for my search practice, and my thanks to Vickie Elmer as well as the search professionals who contributed to the article, for creating this great new tool for my search toolbox.

Q: I’m trying to collect a placement fee using the “but for rule”, and the client is just coming up with more excuses to avoid payment. Would you please explain what the rule is, and how it works?

A: So sorry you’re getting ensnared in this “but for rule” business. It’s really the “but for EXCEPTION,” and just educates fee-avoiding clients so they get better at their game. This polarizes the dispute and translates into “No Sale.”

So I’m going to take longer than usual with the answer. Hopefully, for once and for all, we’ll lay this “rule” to rest.

The “rule” itself is easy to state: “But for your referral, would the candidate have been hired?”

If you’ve never made a placement, this sounds reasonable enough. You think making placements is like bowling. You pick up the ball (candidate), roll it down the alley, and make a strike (a hire). Nobody argues with that.

But if you’ve ever worked a desk, you know that making placements is far more like pinball. You pull the plunger, shoot the ball, work the flippers, watch as it rolls around and hits the big bumper (and lights up – an interview!), rolls, spins, ricochets, delays, slides, and takes twists and turns like no other play you’ve ever made.

You watch from the outside-in as these events take place, and eventually the ball reaches the jackpot (a hire).

Legally, each one of those bumps, rolls, spins, ricochets, delays, slides, twists, and turns is called an intervening act. Simple enough. Something that happens after you shoot the ball.

Not so fast. There are two types of intervening acts.

A dependent intervening act is one caused by you. Pulling the plunger or working the flippers. Everything between that and the jackpot is a causation question. Was hitting the big bumper (an interview) caused by you? If it was caused by a ricochet (let’s say an employee referral), the client’s argument is that it was an independent intervening act; it had nothing to do with you. The turncoat candidate and client agree. There may even be a document trail that “substantiates” this.

No sale. So someone tells you about the “but for rule.” Yeah, that’s it!

You say, “But for me pulling the plunger, the ball would have never been on the playing field.”

It’s an open invitation for a fee-avoiding client to set up a variety of factual defenses. “But for” the candidate meeting someone from the client at a trade show, “but for” the resume already in the client’s data base, “but for” your failure to obtain the candidate’s consent to the referral, “but for” the employee referrer convincing the candidate to interview, and an infinite number of other ” but-for bumpers” that will have you flipping your five-figure fee into the forest.

If you haven’t already blown this fee, you absolutely must not use the linear “but for rule!” Placements in the real world (unlike bowling) don’t occur in a straight line. Just think of all the intervening acts that occurred after your sendout that an employer lawyer will say were independent of that referral!

I cover this in detail in Chapter 23 of The National Placement Law Center Fee Collection Guide, entitled “But For, But If, What Then?” It is followed by Chapter 24, entitled “The ‘Substantial Cause’ Test.

Even though you’ve been giving away your fee, try using my fee-getting, legal-sounding, poly-syllabic phrase: substantial cause.

Just say, “My referral was a substantial cause of the hire!”

It gets recruiters paid like crazy, because it’s impossible to argue that you didn’t plunge and flip.

Pinball, not bowling.

Best of luck to you!

Q: How does the court system protect my client and candidate files as trade secrets?

If you have a valid employment agreement (only a 20% chance), there are two sure ways:

Injunctive relief to stop unauthorized use. The federal and state courts use procedures known as a temporary restraining order (TRO) and preliminary injunction to immediately stop and freeze any use of your client and candidate information.

This is followed by the award of money in the form of compensatory, punitive, and exemplary damages. These awards regularly extend into millions of dollars, and often include attorney’s fees.

In 1973 when I wrote the only trade secrets act for our industry (California Business and Professions Code, Section 16607). Since that time, there have been many general trade secrets laws enacted by state legislatures.

The most significant is the Uniform Trade Secrets Act. Since the UTSA is essentially the same in the dozens of states that have adopted it, there are many published decisions at the federal and state levels interpreting it.

The UTSA expands the definition of “trade secrets” far beyond merely contact information on clients and candidates. Today, it can include such items as:

• Prospective clients and candidates.
• Contacts (decision-makers) at prospective and present clients.
• Hiring preferences at prospective and present clients.
• Temp bid rates and markups.
• Background and contact information on past, present, and future temps.
• Unique compensation plane.
• Unique recruiting techniques.

Now let’s look at how the court system works to protect your rights. The legal remedies available are the only two you could want: stopping the conduct and awarding money for the wrongdoing.

Temporary Restraining Order (“TRO”)

TRO’s are granted ex parte (“one party” – usually on 24 hours telephonic notice). They are psychological warfare.

You can’t afford to lose this hearing. That person who said “‘Tis better to have tried and failed than not to have tried at all.” Never tried a trade secrets case.

The decision is usually made by the judge in chambers. The burden of proof is irreparable injury. It is considered extraordinary relief, since someone is being deprived of his livelihood without having his day in court.

A judicial bond must be posted in case the judge made a mistake. The underlying complaint must be filed concurrently. That starts the lawsuit.

The TRO remains in force only 30 days. So the clerk of the court must set the hearing for an Order to Show Cause Re Preliminary Injunction within that time.

Preliminary Injunction

This is essentially a noticed TRO, whereby the other party has the opportunity to file opposing pleadings (court papers) including affidavits (statements under oath) and points and authorities (analysis and citations of cases, statutes, etc.).

Here too, the decision is almost always made by the judge in chambers. But oral argument in open court is usually permitted.

The preliminary injunction remains in full force and effect during the pendency of the litigation (until settlement or trial).

Permanent Injunction

This is issued at the trial. (A preliminary injunction ripens into a permanent injunction if it is ordered.

The 12 causes of action (legal theories) we use make trade secrets litigation a very expensive, painful experience for recruiters who violate the law.

The most important thing you can do is have a properly-drafted employment agreement. Over 80% are not. They are also not updated as statutory and case law changes, or administrative rulings are issued.

Use a well-drafted agreement, plead the case properly, and the court system protects your trade secrets very well!

Q: Do I need EPL (Employment Practices Liability) insurance?

A: EPL is very expensive coverage, but it is essential if you employ recruiters, have more than one office, place temps or contractors, or are an absentee owner. It covers costs of defense (the “duty to defend”), has the indemnity (claim coverage) provision, and a deductible.

It covers everything from discrimination to wrongful termination claims. There are usually many witnesses, the cases can be complicated, and government agencies are often involved. So the costs of defense can be high.

In employee lawsuits, owners and managers are typically named as defendants. Having this insurance may either give you protection or motivate plaintiffs to focus on corporate responsibility — because they know the “deep pockets” of insurance will be involved.

Not only are the costs of defense high, but the claims can be astronomical. Back pay is much less than front pay which is theoretically unlimited. The case law usually limits it to three years, but decisions vary widely. Fines, penalties, and taxes are often added.

If you risk this, check with your broker. Review the costs and coverage, carefully read the policies yourself, and select the highest deductible you can withstand. (Don’t worry about which carrier you use, but make sure it’s one with sufficient reserves.)

Q: This question relates to your October 26 post on Cold Calls & Defining Harassment. Are the rights of companies the same as the individual candidate you mention in this post? I ask in the context of an outside search firm marketing into, or attempting to recruit from, a corporation. Can the company claim they are damaged by receiving a recruiter’s phone calls (i.e., disruption/interference of normal business suffered as a result of calls into the company)?

A: Yes, the rights are basically the same. However, the intensity and the danger is much higher.

These days, it’s tempting for failing businesses to blame anyone they can. Regardless of the real reason (mismanagement, the economy, competition, etc.), losing key employees tends to trip lawsuits against those involved.

Moreover, the massive damages alleged by an employer can be expected to include reduced market share, loss of investor confidence, inability to attract talent, loss of present and future profits, etc. There’s virtually no limit on the amount of a judgment (judge-decided) or verdict (jury-decided) award, since we’re talking about compensatory (to compensate), punitive (to punish), and exemplary (to set an example) damages.

Aside from the invasion of privacy issues (which are personal to a candidate), the inducing breach of contract, interference with contractual relations, and interference with prospective economic advantage intentional tort theories are the same.

This is because the third-party (recruiter) interference allegedly disrupted the bilateral contract between the employer (source) and the employee (candidate). So each party has rights against the interference.

Of course, employers usually have more money, more lawyers, and more politics. So the likelihood of major litigation is higher and so are the stakes.

Many of these lawsuits are filed to simply give nervous management types job security. With litigation pending, they have “cover,” since their claims have credibility. And who’d terminate a key witness? I was fascinated by this move when I was in HR, since we’d have totally useless, highly paid employees doing absolutely nothing for years. They just kept the discovery pot boiling in protracted lawsuits against totally innocent recruiters and competitors. Always talking about terrible misdeeds and huge awards that they never could prove. The lawsuits took on a life of their own and reached old age.

***

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.

Q: Given the ease at which recruiters can now find passive candidate information online, when does a cold-call to a candidate at their place of work constitute either harassment or an invasion of privacy (or something else)? Must the candidate declare the solicitation unwanted (as in sexual harassment) for the recruiter to become liable for something? What if the candidate has posted their employment details in the public domain as in Linkedin or Facebook, for example? Do they somehow legally waive the right to be contacted at their place of employment if they upload this information themselves (without a phone number)?

A: “Harassment” is a word used frequently by people who are hassled about anything, at any place, and at any time. But it’s difficult to imagine how a professional contact — or even a series of them by phone, email, express mail, or regular mail — could be deemed so annoying as to rise to that level.

There are no reported cases in the history of American Jurisprudence where a recruiter was even accused of harassment. Who’d bother? If there’s anything a contingency-fee recruiter doesn’t do, it’s waste time with contrary candidates. So if someone stalks an LPC (least placeable candidate), he deserves what he gets.

Now, on to the tort (non-contractual civil wrong) of invasion of privacy.

Liability has developed through case law (court decisions that set precedents) rather than statutory law (legislative enactments). Since each “fact pattern” in each case is different, it’s unclear as to what “invading” someone’s “privacy” really means. So one person’s “invasion” is another’s opportunity. Or both, depending on the whim of the victim.

In attempting to decide objectively whether someone’s privacy was invaded, there are three probes to use:

1. There must be an “unreasonable” interference with the “right to be left alone.”
2. Only an unreasonable interference is “actionable.”
3. What is “unreasonable” depends upon the circumstances (including the express or implied consent of the victim).

You’ve asked about the candidate declaring the solicitation unwanted. This has a tendency to happen only when the source employer finds out. So the appropriate legal defense is some poly-syllabic variation of “Gimme a break!”

The way to get around all of this nonsense is to simply make that cold call, and ask immediately for an after-hours phone number. Home, cell, parole officers’, whatever. If you get one (or even a personal email address), the candidate is estopped (stopped) from asserting that you violated her rights. She impliedly waived them. (A “waiver” is the voluntary relinquishment of a known right. Once waived, you’re estopped from asserting it. Pretty nifty, eh?)

While there are an endless number of ways candidates can impliedly consent to being contacted — from showing their bodies on billboards to stuffing photo-reduced resumes into fortune cookies — these things are not necessary to show consent. Of course, anyone on Linkedin or Facebook wants publicity. Gimme-a-break for sure.

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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.

Q: Can you let me know what the legal ramifications are of a company’s request to stop soliciting their employees? Do they have legal recourse if I continue to solicit them? Does it matter if the solicitation is in the form of an email or phone call? And does it matter if an email solicitation is in the form of a request for referral versus asking them if they would be interested in the position?

A: Great questions that I’m asked dozens of times a month!

There are no ramifications with regard to the source employer’s request itself. However, you shouldn’t ignore it.

If the request is from some human resourcer or other non-lawyer, reply in the same manner as you were notified (mailed letter, faxed letter, email, or phone call). If there’s a letter from a lawyer, have your lawyer reply with a letter. Using the same mode of transmission is appropriate without appearing defensive or aggressive.

If the solicitation is in the form of an email or any other writing at a candidate’s workplace, you’re just providing evidence to a potential adversary. So phone solicitation is best. Immediately ask for an after-hours number, cell number, and personal email address.

Asking for referrals is better than a direct solicitation for obvious reasons.

Now on to the law:

The source must be able to prove you’re guilty of inducing breach of contract and interference with contractual relations. If you are found liable for one or both of these intentional torts (civil wrongs), punitive and exemplary damages (to punish and make an example of you) can be awarded in an unlimited amount.

There are only two issues:

1. Was there an enforceable contract with the candidate?

Always. Even an at-will employment of one day is a contract. The expectancy of continued employment by the parties is sufficient.

2. Was the conduct malicious?

If it helps, the courts have defined “malice” as “hatred” or “ill will.” Others call it “over the top.” What does that mean? It’s very subjective, but no reported case has ever defined it as “cold-calling to determine interest in a job change.”

Inducing breach of contract and interference with contractual relations claims are often coupled with allegations of unfair competition and conspiracy (with the client). These also invoke unlimited punitive and exemplary damages.

So that’s the story — recruit away. Then if you’re sued, we’ll counterclaim for an outplacement fee. Since you can’t “steal” someone who doesn’t want to be stolen, you’re helping the source remove its morale problems! Nothing like getting two fees for one placement.

Thanks for asking!

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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.

Q: Can I be held liable for recruiting an individual out of a company where there is a non-compete and placing them with a competitor? I know that it is the candidate who signed the non-compete, but can I get in trouble for my role as a recruiter?

A: Thanks for this dynamite question! I get it constantly, so am delighted we can post the answer for all to read.

The big defense (“cover”) is traditionally that since a recruiter is an independent contractor, the client is not liable for its acts. This is unlike the vicarious liability of an employer for the acts of its employees done “in the course and scope of their employment.”

The independent contractor status has been a good marketing tool for aggressive outsourced recruiting, since in-house recruiters are typically employees. Even “contract recruiters” on site are under the thumb of the employer.

However, employer lawyers ensnare recruiters by alleging a civil form of conspiracy. My definition of conspiracy is “two or more people doing something neither of them should do alone.” Conspiracy (and related “complicity” theories) if proven invoke unlimited punitive (to punish) and exemplary (to set an example) damages.

The underlying wrongful conduct that also invokes unlimited punitive and exemplary damages includes such theories as inducing breach of contract (the employment relationship with the candidate), interference with contractual relations (the current benefit of the candidate’s slave labor), and interference with prospective economic advantage (the loss of the future value of the candidate’s services).

If you’re doing retained search, it’s easier to make the case that you’re de facto (“in fact”) your client when you recruit. But even when you’re doing contingency-fee search, you should not get involved.

Simply tell the candidate to contact an employment law specialist to analyze her rights and liabilities under the contract. Resist the temptation to give any advice whatsoever, and don’t even look at the contract. You’re asking for trouble if the source gets serious about enforcement.

We get involved in these situations a lot. But we don’t have recruiters in the consultation with the candidate, and we insulate them from liability in many ways.

Thanks again for asking. You helped a lot of people stay behind the line!

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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.