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The Fordyce Letter

Straight Talk for the Recruiting Profession


Articles tagged 'legal issues'

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.

Uncategorized

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!



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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.

Contract Staffing, Staffing

Report Says: IT Staffing Firms Discriminate Against American Workers



Bright Future Jobs

An IT recruiting watchdog group says some staffing companies are abusing the U.S. visa program, advertising jobs that may not even exist, and limiting applicants to non-citizens.

“The public is led to believe that companies can’t find Americans to fill high-tech jobs when, in fact, they are not searching for Americans — as these ads show,” said Donna Conroy, a founder of Bright Future Jobs and author of “No Americans Need Apply.”

Her report details an analysis of 100 IT ads, posted on tech job board Dice.com, which all include language referencing various visa programs, and which, Conroy said in an interview, are phrased as “code for foreign workers only.”

The Bright Future Jobs analysis of the ads found 37 percent of them made no mention of IT job terms or skills in the ad title. Instead, they contained only references to visa types, says Conroy’s report. “These 37 ads also repeated these USCIS (US Citizenship and Immigration Services) terms in the skills section,” says the report.

Fordyce Forum, Jeff's On Call!

Secrets, Agreements and Fees Topped Jeff’s Consults at Fordyce



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If you just returned from the 2012 Fordyce Forum in Dallas, you might have to look in the mirror to recognize yourself.

That’s because you’re probably a different person than when you left. A little sharper, a little more positive, a little more confident.

Why is that? What makes this industry confab so very unique? Unlike any association, network or franchise event? There are three things:

For Managers

Get a Lawyer



lawyer

Do not wait, it may be too late.

Get a lawyer. Get one now. Do not wait. It may be too late. Do not hesitate. Be the first one on your block to be represented by an attorney. Don’t wait until you think you need one. Don’t wait until you are faced with a problem collecting a fee and need help. Know one now and get advice before that happens.

You are in a business. I know it is a professional occupation, but it is also a “business;” a business based on contracts between you and your clients. And your clients have lawyers on their staff or use them on a retained basis. You have to get on an even par with them before they have the advantage over you. Do not delay any longer, stop and get a lawyer now and then come back to read the rest of this article. But if you put it off, do not blame me. Read on.

Jeff's On Call!

Jeff’s On Call!: Discrimination Abroad



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This week’s inquiry comes from a 2010 article titled “American Employment Law Applies in Foreign Countries,” by John Howard Torrance-Nesbitt. The article is about discrimination litigation regarding U.S. citizens applying for employment with American employers or for employment with American-controlled foreign employers.

The question is from a comment by Joe Lee and Amybeth forwarded it to me:

What about foreign corporations recruiting Americans for foreign employment? Can a foreign company recruit from the Internet in the United States and say no one over 40 may apply ( protected class)?

Jeff's On Call!

Jeff’s On Call!: Corporate Raiding



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This week’s inquiry comes from Dave Glaser:

Dear Jeff,

Thank you so much for your great column and advice over the years.  I am a long time subscriber to Fordyce and have used your office successfully in the past.

In running a small search firm of 6 people, we occasionally run into problems where companies are not too thrilled about us contacting their employees.  We specialize in the high net worth/wealth management area, so often we are recruiting talent from large accounting firms and financial service firms.  We have been contacted via email and phone calls with threats of law suits for raiding their firms, enticing their staff with other employment, etc.  Can you please expound on where we stand from a legal perspective?

Thank you!

Dave Glaser, President
ECG Resources, Inc.