How to deal with a client who refuses to pay the placement fees??

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Permalink Reply by J.nibu on December 30, 2008 at 2:18pm

Thanks for all your responses..... I have to wait until January 5th as the hiring manager is working on solving this issue and I feel I should definitely give him time... and will surely let you guys know how it goes... I appreciate all your help... Pls feel free to add more comments if any....

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Permalink Reply by pam claughton on December 30, 2008 at 2:49pm

I agree with Jerry. Keep the candidate out of it. I still think you have a chance of salvaging this, if you proceed professionally. The hiring manager is on your side it sounds like, so keep communicating with him. Make it clear to hr that it's irrelevant at this point if they already have the candidate's resume. You are too far along in the process. If they had informed you before bringing your candidate in, it might be a different story.

Yes, you don't have a signed fee agreement. You know that was a mistake and it won't happen again. But, you did have a verbal discussion with the hiring manager and do have emails discussing and agreeing to your fee, correct? Proceed along with this candidate and hiring manager in an assumptive manner that you are due and will be paid a fee.

You have nothing to lose and everything to gain by continuing along to close the placement. If you throw a fit now, you will lose the placement and client.

Good luck!
~Pam

Jerry Albright said:

For some reason I want to disagree with the general concensus here on getting the candidate involved.

This is between you and the company. (I refrain from using the world "client" so loosely in these situations.) Threatening them with turning them into a source company, badmouthing them, etc. is not going to get them to turn their ship around. There is no value (other than making yourself feel better for the moment) to any of that.

Informing the candidate will do nothing for your fee situation. The company will most certainly convince the candidate you are somehow at fault - and that will add no value. You will only look like a sore loser.

Very simply put - you have no leverage here. You've already provided the services. The candidate has accepted.

Send the invoice including all documentation. Follow up with them letting them know you expect to be paid. When/if they do not pay turn it over to a collections attorney who will work on contingency.

Take the high ground. Take the hit. Move on. (After sending the invoice.......)

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Permalink Reply by Jeff Weidner on December 30, 2008 at 4:09pm

As a last resort call Mike Biven or Stephen Schwartz
800-318-6494
michaelbiven@coface-trm.com

Mike is a Collection Rep for Coface Collections
We have used them in the past on occassion and they are very nice to deal with it when comes to getting paid. They do't harrass or threaten people and have always gotten me paid when I thought the account was lost. Granted we've only used them twice in 14 yrs but they did their job both times. Amazingly both clients respected the fact that we didn't send them to some pitbull agency and were very appologetic for not being able to pay their bill in a timely manner.

Not having a signed Agreement might be a wrinkle but if you have emails or faxes or anything saying that they wanted you to work the project then you might be able to collect.

Understand, this "New client" will most likely turn into a former client if you send them to collections but either way do you really want to do business with someone/ some company that doesn't value your contributions?

Jeff Weidner
HTC Research Corp

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Permalink Reply by J.nibu on December 30, 2008 at 4:11pm

Thanks Jeff..

Jeff Weidner said:

As a last resort call Mike Biven or Stephen Schwartz
800-318-6494
michaelbiven@coface-trm.com

Mike is a Collection Rep for Coface Collections
We have used them in the past on occassion and they are very nice to deal with it when comes to getting paid. They do't harrass or threaten people and have always gotten me paid when I thought the account was lost. Granted we've only used them twice in 14 yrs but they did their job both times. Amazingly both clients respected the fact that we didn't send them to some pitbull agency and were very appologetic for not being able to pay their bill in a timely manner.

Not having a signed Agreement might be a wrinkle but if you have emails or faxes or anything saying that they wanted you to work the project then you might be able to collect.

Understand, this "New client" will most likely turn into a former client if you send them to collections but either way do you really want to do business with someone/ some company that doesn't value your contributions?

Jeff Weidner
HTC Research Corp

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Permalink Reply by Melissa Holmes on December 30, 2008 at 5:25pm

You have learned a valuable lesson. To attempt to save this, my advice would be to talk to the contract decision maker and not just the hiring manager. Fall on your sword because there are things you did not take care of before submitting the candidate (such as determining who was eligible from their perspective for you to submit). I don't think they were trying to take advantage of you. You were not dealing with the decision maker on the contract as you should have been. I think you have learned the risks of working without a contract. . I wish you a more successful 2009!

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Permalink Reply by KarenM on December 30, 2008 at 6:33pm

the good or bad news - it depends on the wording of your contract. In this case there is No contract, so there is unfortunately no recourse, as it is your word against theirs.

That is unless you have Something in writing to show that there was an agreement, and that both parties accepted the Terms of the agreement including the Consideration -- defining what Needed to be done to be paid for such work.

You mention an email -- does the E-mail Define the Terms of agreement? that they will honor the agreement that you mentioned? If so then this may be considered an Electronic Agreement, and an Electronic Signature - depending on which state you live in. 48 States allow Electronic signatures to be considered as contracts, if there is Significant other evidence to support the agreement of the terms

For example if you have kept the emails to and FROM the client regarding Said candidate, you potentially are creating an evidence trail that may be supportive

I have seen recruiters win payments on much less.. and Lose on more as well.. It can go both ways.. I always say, it depends on how the judge felt when he woke up that morning..

You will need to find an attorney who is familiar with Electronic Discovery, E-commerce and if your client is from another state, Interstate commerce - as you may have an issue also with Jurisdiction..

Hopefully you have kept all your email correspondances -- many assume that one must Have a Formal Agreement to be considered a contract... but yet even Verbal contracts are acknowledged in the courts (though sometimes extremely difficult to prove) --

the 3 elements of a contract for example a recruiters is
1 - Mutual consent for the recruiter to help the company find the future employees for the candidate
2- Offer and Acceptance - the recruiter offers the client to work on Contingency or retainer at a specific percentage under specific conditions and terms.. the client demonstrates acceptance (this can be done via email for example.. or even as a verbal agreement) and the client says, send me the resumes, here is my email address.. and we will stay in touch with you to set up the interviews.. etc.. (this can sometimes be used as examples of proof of acceptance of the contract as well.. )
3 - Consideration .. An exchange of Value..
4 - Performance and Delivery - Recruiter sends candidates in, as was promised, client stays in touch with recruiter and works with recruiter, to facilitate the placment..

Okay this was a long winded way to demonstrate that yes, a contract can be a contract if there is demonstrated proof of All of the elements that make up a contract were applied..

I am not an attorney, and should you consider pursuing, May I suggest you do find one that specifically specializes in Contract Law, and specifically in E-commerce.

Best to you

Karen Mattonen..

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Permalink Reply by Harry Dougherty on December 31, 2008 at 1:27am

My advice is to call & email the company’s hierarchy from the top-down. Let them know, if they don’t already, of the circumstances and your intent to pursue your placement fee.

Next, send a certified letter with your invoice and documentation of your actions that led to the candidate being hired.

Lastly, if they still refuse to pay, sue them.

To file in small claims (typically less than $10k) cost around $50 bucks…and $250 if it’s more. Having them served with court documents maybe another $50. Suing their asses…Priceless.

Most companies will settle. Craigslist has a law forum that might be worth asking this question on too and getting some pro bono help.

Good luck! When the dust clears please let us know how you made out.

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Permalink Reply by J.nibu on December 31, 2008 at 2:58pm

Hello everyone... It was great to receive so many expert advice from you all... Thanks and I really appreciate it..
Now... this issue is almost getting settled just because of the hiring manager's efforts.. I will b getting the placement fees and more than that I have been retained for recruitment and that's the best part of it... Definitely will be having the proper signed agreement before 2009 starts!

Wish you all a Very Happy New Year.. Wish you the best of everything in the year 2009...

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