Mar 27, 2019
Wilson Cole, President of Adams, Evens, & Ross (AER) and Samantha Cole, in-house counsel for AER, sit down to discuss 2 more excuses companies give for back door hires. The top phrase that Wilson looks out for when evaluation whether the back door hire was an honest mistake or specifically planned by a person who never planned on paying the staffing or recruiting agency is “we never signed an agreement.”
Wilson does not get surprised when an attorney says that phrase because it’s a standard procedure for creating a defense, which is their job. But if that phrase comes from anyone else, especially the owner of the company, it’s a totally different story. Wilson and Samantha both emphasize the importance of the recruiting or staffing agency having a signed contract. Half of the cases that AER receives are ones where there are no signed contracts but AER is still able to collect, however AER is able to collect 50% more (on average) when there is a signed contract, on top of their being an overall higher collection rate when there is a signed contract.
Samantha goes on to say that relying on anything less than a signed contract, such as just a notice (or the following clause from an unsigned contract) that fees are due if hired “within 12 months of last discussion,” is becoming less reliable across the country. Multiple states have ruled that an unsigned contract cannot pass as an oral contract, even if it contains the phrase from the last sentence, because oral contracts have to be executed within 1 year. For staffing or recruiting agencies that may say “it’s hard to get clients to sign,” technological advancements of the present day, such as DocuSign, have made that process easier than ever.
Some legal jurisdictions, such as Massachusetts, even require a signature; without it, a case from a creditor saying a debtor didn’t pay will get thrown out immediately. Another risk of not getting a contract signed is that it’s almost guaranteed you will not be rewarded the cost of attorney’s fees if the case is escalated to litigation. During Wilson’s time in the industry, he has seen many contracts from recruiting or staffing agencies that contain the phrase “if you do not sign the contract, you agree to the terms by the acceptance of the resume.” In his experience, while it’s better to have that phrase in the contract than not to have it, it simply does not substitute for having a signed contract, which is always better.
Moving on, another popular excuse given by companies for back door hires is “we paid another recruiter.” Wilson says that the timing of when that excuse is given is a big factor in how strong a creditor’s case is. The longer after presentation it is given, the stronger the creditor’s case, while the opposite is true the sooner it is given. Samantha says that it is very important for staffing or recruiting agencies to never respond to this excuse with anything to the effect of “ok, never mind then,” because that effectively waives the fee.
This means that even if the staffing or recruiting agency finds that the company lied and the recruiter they said they paid doesn’t even exist, it’s hard to make a case against the company because the first thing they’ll say is “the fee was waived.” She says instead, staffing agencies should ask for some type of verification or documentation when they hear this excuse. Even if the company is telling the truth, they may still have a financial responsibility to pay a partial fee instead of walking away paying nothing at all.
2 Key Quotes
· The top phrase that Wilson looks out for when evaluation whether the back door hire was an honest mistake or specifically planned by a person who never planned on paying the staffing or recruiting agency is “we never signed an agreement.”
· During Wilson’s time in the industry, he has seen many contracts from recruiting or staffing agencies that contain the phrase “if you do not sign the contract, you agree to the terms by the acceptance of the resume.” In his experience, while it’s better to have that phrase in the contract than not to have it, it simply does not substitute for having a signed contract, which is always better.