Hello, I'm wondering if other placement agencies have had this experience?
A client (CEO) from a small company contacts me via Linkedin and asks me if I can work on a direct hire position. He asks me about fees, terms and conditions. After I email him back with all this information, I send him a contract to sign. He sends me the job order, we have a few phone calls about the position, and I start working on the opportunity. I ask him 3 times via phone and email to return the contract but he always says he will but never does.
He is in constant communication with me as I find great candidates, facilitate interviews, do references and he hires one of them. This was two months ago. I have sent him two invoices for 20K that are past due. He doesn't pay or respond to emails. He clearly asked me asked me to do the work, a fee was negotiated via email. He wouldn't have the employee if it weren't for my hard work. There is tons a proof that he knew there was a fee attached.The client and I both run our businesses in Wisconsin. What chance might I have collecting a fee? What type of attorney could I contact?
That sucks. Has there just been no response from him at all, can you go to his office? Are you in contact with the candidate(s)? I would contact a firm that handles contract disputes and see if they could write a letter to the hiring company. Sometimes that's enough to get a response - hopefully a check! In many instances, a contract would be considered "binding" via email or even verbal communication. But of course that would mean time and money in court that might not be worth it even if you prevailed.
There has been no response from him at all. His office is a far drive to another city. I have had contact with the candidate so I know he is still working there. I hope that a letter from a lawyer will get a payment from him. I am going to have my business partner do a final collections call before we take legal action. It definitely would be worth going to court for because the fee was 20K. Thanks for your response.
You've been screwed. Never, ever, ever send anyone until you have a signed agreement on your desk.
What about something like this in your agreement from now on? ------
Your signature on this agreement, or accepting any services, including applicant submission, interview scheduling, et al after receipt of the agreement, is evidence of your acceptance of the agreement.
I just wrote that - but thought it might be worthwhile to consider adding a clause like that to our agreement.
you absolutely have a claim under what is known as unjust enrichment. http://en.wikipedia.org/wiki/Unjust_enrichment.
I consulted with an attorney who specializes in contracts and business litigation. She said that I have sufficient evidence to potentially win a court case. The terms were all worked out via email whether a contract was signed or not. He knew what the terms and conditions were and hired the candidate. The hard part might be collecting the money, especially if the business doesn't have money. Taking him to court is going to cost thousands of $$. We're going to do a demand letter first and go from there. Thanks for your comments!
@ Deb. Good. These folks thrive when they believe that can get away with this type of behavior.
Very best of luck,
Good for you for moving forward with this. Some people will try to get away with anything! I'm not a lawyer, but I'm sure there are cases where this has happened, and been resolved? There has to be precedence, I would imagine....
Some states have enacted laws already that very specifically address this kind of abusive behavior from clients. If he negotiated terms with you and accepted your candidate then you 100% have a right to collect a fee. Hopefully your demand letter will be enough. Kudos to you for not allowing him to get away with this bad behavior!