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Articles tagged 'askjeff'

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Jeff on Call: Soliciting Employees and the Law

by on Oct. 15, 2009


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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!

***

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.

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Jeff on Call: Recruiting and Non-Competes

by on Oct. 8, 2009


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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!

***

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.

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Jeff On Call: Errors and Omissions Insurance

by on Sep. 10, 2009


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Q: What do I need to know about E&O (Errors and Omissions) Insurance?

The most important thing to know is that it means what it says: if you erred or omitted something during a placement, there might be coverage. In other words, “ordinary, garden-variety, negligence.”

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Jeff On Call: Can I Re-recruit a Placed Candidate?

by on Sep. 3, 2009


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Q: Can I re-recruit a placed candidate?

Yes. There is absolutely no statute or case anywhere prohibiting this.

However, there are three intentional torts lurking in the background:

An intentional tort is a non-contractual civil wrong. If you are found liable for committing it, the law allows unlimited punitive and exemplary damages to be awarded in the discretion of the judge or jury. That’s where the huge jury verdicts come from.

Hundreds of federal and state courts have written opinions on this issue. The foundation is a feisty U.S. Supreme Court decision rendered in 1915 (Truax v. Raich, 239 US 33, 60 L Ed 131) that stated:

The fact that employment is at the will of the parties respectively does not make it at the will of others . . . and by the weight of authority, the unjustified interference . . . is actionable, although the employment is at will.

Almost a century of court review, and the law is still the same.

The three intentional torts that expose recruiters are:

Inducing Breach of Contract:

This means causing someone (like an employee) to break his contract with another (like an employer). Of course, almost every business tries to get business from someone else, so the law only recognizes cases where there is some wrongful conduct (like using confidential information). That’s why recruiting a placed candidate could legally cross the line.

Even at-will employment is considered a contract that might not otherwise be breached.

Interference with Contractual Relations:

This relates to the disruption caused by calling into companies. It ranges from a passive annoyance to an active insurrection, depending on your aggressiveness and the loyalty of the employees.

Interference with Prospective Economic Advantage:

This is an actuarial projection. The loss of future services of the candidate, morale, and anticipated business can be massive.

***

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.

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Jeff on Call: Where Is the Leverage in My Fees?

by on Aug. 26, 2009


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Q: I read one of your articles on “Does Arranging Interview = Placement Fee?” I’m reading the book SEARCH AND PLACEMENT by Larry Nobles. He talks about the marketing cold call in which we present a qualified candidate to a company when we don’t know if they have openings. I understand the whole point is to get a search assignment, but if they like the candidate I’m presenting and want to interview that person, when should I mention the fee? After I suggest we set up an interview or before? Should I say something like, “Great, I’ll fax over our client agreement and you can give me a couple of good interview dates”? The book talks about closing on a search assignment but says nothing about what to say besides “Let’s set up an interview,” when they happen to want to meet the person I’m calling about.

Thank you,
Kenneth Stallworth

Dear Ken,

I’m honored to answer this question because it mentions Larry Nobles.

Larry died a decade ago from inoperable brain cancer. I remember talking with Fordyce Founding Father Paul Hawkinson after Larry visited him in St. Louis, knowing it would be for the last time. A few hours after dropping him off at the airport, Paul received the call.

Larry was among the few extraordinary people who keep our industry placing. His techniques, his delivery, and his “desk-up” knowledge were superb. He was a great guy, as unpretentious as he was wise. Larry still lives through his work that he shared so generously during his life. You can still buy his classic books at www.larrynobles.com.

So speaking for this angel on high, here’s my reply:

Your greatest leverage exists at one point, and one point only. It’s just after you present — and just before you identify — a candidate the client thinks she wants to hire.

Note there are two phases to the referral:

1. Present, and
2. Identify.

If you haven’t fully cleared your fee in writing prior to identifying the candidate, you’ve lost your leverage — and given away your stock in trade.

Best wishes for collecting your well-earned fees. Clearing and documenting them before the sendout is the key!

***

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.

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Jeff On Call: How Will Incorporating My Business Protect My Assets?

by on Jul. 31, 2009


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Q: How will incorporating my business protect my assets?

While the person claiming money or some other relief will undoubtedly name you personally, a corporation offers an additional layer of protection by virtue of its separate legal entity status under the law. Legally it is a separate person for liability purposes. Not necessarily the only person, though.

You’ll pay initial legal fees and recurring accounting fees. You must comply with certain state meeting and recordkeeping requirements. You’ll also pay additional corporate taxes.

Unlike a simple sole proprietorship or general partnership that merely requires a fictitious business name filing with the local county recorder’s office, corporations are more complicated.

However if you take your corporation seriously, a court will too.

This means:

  • Fully and completely finishing the entire incorporation process. Filing the articles of incorporation, preparing by-laws and first meeting minutes, issuing stock certificates, opening a separate bank account, and completing any federal, state, and local requirements.
  • Maintaining the books and records required by federal and state agencies.
  • Filing all official reports required by federal, state, and local agencies.
  • Filing all federal and state corporate and personal tax returns, being certain they are consistent.
  • Keeping corporate activities financially and operationally separate from personal activities.

Of course, consult with your attorney and accountant before incorporating.

***

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.

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Jeff On Call: Is a Corporation Right for My Business?

by on Jul. 24, 2009


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Q: Is a corporation right for my business?

If you have multiple owners (other than spouses) or employees, there are distinct advantages.

These legal entities exist because a properly established and maintained corporation is a separate person under the law. Therefore (at least in theory) the corporate assets and liabilities are not those of the owners (shareholders).

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Jeff on Call: What Can I Ask In a Reference Check?

by on Jul. 17, 2009


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Q: What can I ask in a reference check?

As many personal and professional questions as you like. Just be sure you have the consent of the candidate in writing. There are no specific restrictions, but of course don’t cross the line into asking about:

  • Race
  • Religion
  • Sexual Preference
  • Age
  • Physical Characteristics
  • Mental Health
  • Marital Status
  • Family Responsibilities

As long as you have the consent of the candidate, disclosure is the reference’s problem.

There should be a law against reference checking. It’s the most subjective, easily contrived and inaccurate way possible to gauge who will become a successful employee.

The area of law is known as defamation or defamation of character. There are two types — libel (written) and slander (oral). Three probes can be used to find out if you have a problem.

  1. The communication must be likely to interfere with the candidate’s employment.
  2. The communication must be false. (How do you know? Attempt to verify it, and document your efforts. This may be enough to prove your allegation.)
  3. The communication must be represented as fact rather than opinion. (“John was absent from work at least two days each month.”, not “John seemed to be absent from work a lot.”)

Since employment is considered important, false statements of fact are presumed (legally assumed) to be malicious (defamation per se) invoking punitive and exemplary damages without the usual burden of proof.

Fortunately, a majority of states have recognized a conditional privilege to protect those who obtain information about a prospective employee on behalf of a client. This was acknowledged in a typical case involving a nurse’s registry. (Judge v. Rockford Memorial Hospital, 17 IllApp2d 161, 217 P2d 687)

If you want to get candidates hired like crazy, pick up a copy of my book The Perfect Job Reference. It’s currently out of print, but you can get a copy from your library, used bookstore, or by Googling the title on the Internet.

***

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.

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Jeff On Call: How Long Must I Keep My Placement Files?

by on Jun. 4, 2009


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Q: How long must I keep my placement files?

Three years has worked well, and conforms to the universally known IRS tax record retention period.

The federal, state, and local record retention periods range from one to five years. With so many legal and administrative rules, a three-year period should suffice for job orders, resumes, and any candidate background checks.

Of course, if you know an issue has arisen or is likely to arise, retain all documents for that year forward to the present.

There are serious, separate penalties for the failure to keep employment records and transactions.

If you don’t maintain accurate written records of all job orders backing up all Internet job postings, you’re asking for trouble. You also must keep files on all responses, sendouts, e-mail correspondence, and everything else relating to these transactions regardless of whether or not you place anyone.

Under the federal law, these records must be maintained for at least one year. (29 CFR 1602.14 and 29 CFR 1627.2, et seq.)

So our general suggestion is to maintain everything meticulously for three years. But check with your local law library or lawyer for specific record retention periods.

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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.

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Jeff On Call: Partial-Payment Check = Full Fee?

by on May 28, 2009


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Q: Can I cash a partial-payment check and still collect the full fee?

Usually, but not always.

Welcome to the little-known area of first-year contract law called accord and satisfaction. There is usually only one case covering accord and satisfaction in the casebook, so most law students don’t study it in detail.

A legal accord is the compromise of a disputed claim. This can be expressed or implied.

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