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The Fordyce Letter

Straight Talk for the Recruiting Profession

Articles tagged 'legal issues'

Jeff's On Call!, Legal

How to Tell When Your Sourcing Is Raiding


Hi Jeff,

My name is Jeff Weisberg from JW Resources, a contingency search firm. We are a small specialized boutique firm.

We go to your Jeff’s On Call! column and The Fordyce Letter as soon as we get into the office, and have been following your advice for years.

This morning I terminated my agreement with one of my clients. This was primarily due to a lack of assignments that I have been given over the past year. I placed one individual several months ago due to an old assignment, but hadn’t received any additional assignments during a one year period. I am fully aware that they have been using several other firms on a regular basis based on job postings and by talking with candidates in the industry.

My agreement states that it can be cancelled by either party at anytime and there is nothing stated about recruiting their employees. So I canceled the agreement and they responded, “What is your reason for canceling?” I


Sexual Harassment: Foolin’ Around Could Cost You Plenty

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“Ludicrous.” That’s what the U.S. District Court in Arizona wrote in the 1975 decision of Corne v. Bausch and Lomb, Inc. (390 F.Supp. 161, 562 F2d 55). It was ruling on a sexual harassment case, and stated:

[T]he only way an employer could avoid such charges would be to have employees who were “asexual.”

Times have really changed. Today the official comment might be, “Lucrative.”

We’re called regularly by owners who are faced with sexual harassment charges by the EEOC under Title VII of the federal Equal Employment Opportunity Act, state prosecution, or civil litigation. A few recent examples are:


What to Do About ‘Ban the Box’

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“Ban the Box” is a national civil-rights movement backed by advocates for job applicants with criminal convictions. Proponents of these laws believe that expanding employment opportunities for individuals with criminal convictions is a major factor in lowering recidivism rates.

Generally the laws prohibit employers from asking about an applicant’s criminal-background history until later in the interview process. Most of these laws prohibit employers from including the have you ever been convicted of a criminal offense” question on an employment application – thus “banning the box” – and instead limit employers’ ability to ask the criminal-history question until after a conditional offer of employment is made or after an applicant has been selected for an interview.

Advocates argue that “Ban the Box” laws reduce the barriers to obtaining employment for convicted criminals by allowing applicants to demonstrate their skills and qualifications prior to revealing their criminal histories.

A National Trend

In August 2014 New Jersey joined a growing number of states prohibiting employers from asking about applicants’ criminal histories early in the hiring process. Thirteen states have passed statewide “Ban the Box” hiring

Jeff's On Call!, Legal

Why Having the Candidate Pay the Fee Can Become A Federal Case


Hello Jeff,

Every Monday morning, the first thing I do is look for your column. You’ve been my legal guide for so long, and I really appreciate the help.

Is there anything I should know about taking money from a candidate?

A hiring manager wants to make an offer to my candidate, but the COO doesn’t want to pay the placement fee. The position has been open for 9 months, and my candidate is the right person for the job.

At the behest of the director of HR, I sent this candidate to use as an inducement for the COO to hire him. I have a signed agreement with the client to pay the placement fee if it hires anyone I refer.

It’s the candidate’s dream job at a dream compensation. Now HE wants to pay the fee.

On one hand it doesn’t feel right, on the other hand I have the power to make the candidate whole.

This seems so simple, but I just wanted to run it by you.

What do you think?

Thanks in advance, and thanks for helping me get this far!

Dean Mannello
The Sherwood Group

It’s Not That Simple

Hi Dean,

JOC inquiries like yours help all recruiters to know the law. That’s our

Jeff's On Call!

How to Help Your Criminally-Challenged Candidates

Placements and the law logo

About that “new” EEOC policy about candidate’s criminal record in pre-employment screening. In a sentence, it means:

File a charge of discrimination if a candidate isn’t hired (or is fired) for having committed some non-job-related crime.

If you’re doing contingency-fee search, your existing policy in a sentence is:

Race to place.

That means:

  • If it’s not job-related, don’t consider it.
  • If it has no bearing on the job duties (like a conviction for embezzlement of a bank veep candidate), don’t disclose it.
  • No third-party criminal background checks.

But how about a new policy for you too? How about one to help criminally-challenged candidates resume productive, placement-fee-generating careers?

Jeff's On Call!

Are You Your Client’s Contractor Or An Agent?

Placements and the law logo

In columns through the years, we’ve discussed the different ways any employee can bind his or her employer to pay a placement fee. For this reason, the “unauthorized hiring authority” defense is particularly weak, since an employee is an agent, and therefore acts on behalf of the employer.

Now, we are representing recruiters in a growing number of cases where it’s alleged they were also acting as agents of clients. The significance of this in imputing (attaching) liability to the client for your alleged misrepresentations to candidates and interference with the businesses of source employers, is just beginning to emerge.

Invariably, you’ll end up in crossfire between the candidate or source, and your former client. Friendliness with the client is unlikely when imputation means it will be liable. The relationship is more like one where you have a known case of leprosy. Since almost every recruiting call you make involves representations to someone else’s employees, the opportunity to increase litigation is simply wonderful.


But For Using “But For,” You Would Have Collected Your Fee. So Don’t!

Placements and the law logo

The single biggest contingency fee collection defense is the so-called “but for” rule. Yet recruiters and their lawyers constantly use it as a legal rationale to get paid. When you start a fee collection with, “But for my referral . . .” it will likely end with, “. . . farewell five figure fee.”

Today, I’m going to explain why you should remove the words “but for” from any collection attempt.

Staffing, The Business of Recruiting

Misclassifiying Workers Could Cost Your Clients — Or You — Even More

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Independent contractor illustration-freeAs the Obama administration continues to crackdown on the misclassification of W-2 employees as 1099 independent contractors, the Affordable Care Act — Obamacare — is upping the ante on misclassification penalties.

Employers are often tempted to classify workers as independent contractors because they don’t have to pay the employer share of taxes or provide benefits to those workers. Obamacare’s upcoming employer mandate makes this type of arrangement even more tempting. Under the employer mandate, which goes into effect in 2015, employers with 50 or more full-time or full-time equivalent employees will have to provide healthcare insurance to at least 95% of their full-time workforce or face fines. Even if they provide coverage, they could be fined if that coverage does not meet the law’s standards.

Jeff's On Call!

When the Client’s PSA Wants Liability Insurance, Just Say NO!


Dear Jeff:

I am a regular reader of the Fordyce Letter and especially enjoy your Jeff’s On Call! column. Your information is very interesting and helpful to our industry.  You provide excellent advice, experience, and insight into various employment law issues!

Below is a paragraph from a good client’s contract. As you can see, they are asking for general liability insurance. I asked them about my exposure as a recruiter. You will see their response below. It is my understanding that general liability insurance will not provide the coverage they indicate. What are your thoughts?

10.  INSURANCE  RECRUITER shall maintain in full force and effect, at their own cost and expense, and in a form acceptable to us general liability insurance in the amount of $1,000,000.00 per occurrence, general aggregate limit of $2,000,000.00.  This insurance shall be kept current and in force for the term of this Agreement.  All policies must be written through an insurance company with an overall A.M. Best Rating of B+ or better.  RECRUITER must provide a certificate of insurance evidencing compliance with the above requirements upon request. 

We are looking for recruiting firms to carry insurance in the amount of $1,000,000 per occurrence to cover issues from their recruiting of an individual. For instance, if you recruit and we hire someone that you knew or should have known had a propensity towards violence and then the employee you recruited goes on a shooting spree, then you have insurance to cover the negligent hiring. Does that make sense? It is more along the lines of employment liability. We have had recruiters with other types of coverage also.

Thank you!

Howard Lehman

Hi Howard,

It’s a pleasure assisting you and our JOC readers across the placement plain!

When you ask me about your exposure as a recruiter, I answer a little differently than your client. I answer in four syllables: “UN-LI-MI-TED.”

Industry News

Dot-Jobs Legal Case Ends With Win Allowing Job Boards On .Jobs Address

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The long-standing legal dispute over the establishment of job boards using the SHRM-sponsored .jobs Internet address has been resolved in favor of the job boards.

This means that the 40,000 site Universe.jobs network, run by DirectEmployers Association, will continue to operate, and can even expand if it chooses. Other job boards now will also be able to use that Internet domain, an extension just like the more familiar .com, .org, and .net. A new round of address issuance is scheduled to open in January.

Industry analyst Kevin Murphy called the decision by the Internet’s addressing authority — the Internet Corporation for Assigned Names and Numbers — “opening the floodgates for third-party job listings services.”

ICANN, which issued a breach of contract notice in February 2011 over how the .jobs addresses were being used, did not explain its decision. Nor, for that matter, has it as yet posted any official notice of its decision. Instead, it posted the request to end the legal proceedings sent to an international arbitration group by registrar Employ Media. An ICANN spokesman called to say additional details were unavailable today, but there may be some tomorrow.