On Wednesday at lunch I will be speaking to the DFW Texas Recruiters Network about legal issues confronting placement professionals. Please join me if you can. Here is a link to the details.
Today I have the privilege of speaking to the DFW Texas Recruiters Network. Over the years I have had the privilege of representing placement professionals in a number of circumstances. Some tips:
Below are some resources and previous writings placement professionals might find of use:
The Case
The Fifth Circuit affirmed the opinion of a magistrate judge in the Southern District of Texas that found a law firm owed a search firm for the introduction of a group of lawyers the firm hired. Essentially, the search firm made the initial introduction, but a deal was not reached until some time later.
The search firm argued that it was entitled to a fee because it made the initial introduction. The Court agreed. The opinion is interesting because it discusses whether or not the search firm was a “procuring cause” of the hiring. The Court's definition of procuring cause:
cause that in the natural and continuing sequence, unbroken by any independent intervening cause, produces the [hiring], without which the [hiring] would not have occurred
The Court noted that though there was testimony that the hiring was independent of the search firm’s work, there was also sufficient evidence to show that the search firm was a procuring cause and was entitled to a fee.
Lessons Learned
The takeaway for search firms and recruiters on this opinion is to continue to monitor and follow their clients after negotiations. A deal may be looming in the near future.
A recent case filed in Dallas provides some guidance for recruiters, especially when they recruit lawyers. Lawyer Chris Gilbert sued recruiter Diane Caldwell, the recruiter who convinced him to move from Nashville to Dallas and work for Patton Boggs as a partner. The petition asserts claims for breach of fiduciary duty, fraud, negligence, and breach of contract.
The case is profiled in The Texas Lawyer and the crux of the dispute are representations allegedly made by the recruiter where she stated she was independent and working directly for Gilbert, not the law firm. The lawsuit alleges the recruiter was actually retained by the firm and was neither independent nor representing the interests of Gilbert.
In response, the recruiter filed her answer and asserts there is no fiduciary duty. We've previously discussed the legal significance of fiduciary duties because it places the burden on the fiduciary or defendant as opposed to other traditional causes of action.
This case illustrates the importance that recruiters be explicit when interacting with job candidates. Recruiters should avoid representing they are "independent" if they have been retained by the employer and should disclose the existence of this relationship to the prospective employee. Of course, the recruiter should also always be cognizant of any representations that they make about a potential new employer. There is a fine line between selling and outright fraud. We'll continue to monitor this case as it develops.
Today I have the privilege of speaking to the DFW Texas Recruiters Network. Below are some resources and previous writings placement professionals might find of use:
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Minnesota based TEKsystems Inc. sued three former employees for violating non-compete and non-solicit agreements. TEKSystems is in the technical recruiting business and it claims one of the former employees was contacting its contract employees. The complaint alleges Defendant Brelyn Hammernik used LinkedIn to solicit these employees:
For example, Hammernik has communicated with at least 20 of TEKsystems’ Contract Employees using such electronic networking systems as “Linkedin.” Hammernik has, at a minimum, “connected” with the following TEKsystems’ employees through “Linkedin" . . . In her contacts with Tom Peterson, Hammernick asked Peterson if he was “still looking for opportunities.” She then stated that she “would love to have [you] come visit my new office and hear about some of the stuff we are working on.”
Evidence doesn't get much better then this LinkedIn email:
Linkedln
Tom Peterson has sent you a message.
Date: 12/08/2009
Subject: RE: Brelyn
Hi Brelyn,
Indeed I am still looking. I have time, though!
Lets get together. Where are you working these days? Your profile still has you working at TEK Systems. BTW - my email address is lipidfish@gmail.com if you would prefer the non-Linkedln route.
Tom
On 12/08/09 8:47 AM, Brelyn Hammernik wrote:
Tom—
Hey! Let me know if you are still looking for opportunities! I would love to have come visit my new office and hear about some of the stuff we are working on!
Let me know your thoughts!
Brelyn
Needless to say it will be very difficult for Hammernik to defend this type of conduct. I've used emails in non-compete/non-solicit cases but never LinkedIn evidence. As individuals migrate from company to company they routinely use LinkedIn and other social networking sites to update contacts on their whereabouts. Usually, most updates don't contain an outright solicitation like this. The moral of this story: Employees - be smart about communications that are blatant solicitations. Employers - watch former employees social networking activities once they have departed.
Picking up on the Company A/Jordan James dispute, Company A successfully obtained a temporary restraining order against James. The Court ordered James not to engage in any placement work and return all Company A documents in her possession. Furthermore, the Court ordered Company A to post a $5000 bond and set the preliminary injunction for hearing in ten days. Company A requested that the Court allow for limited discovery before the injunction hearing. The Court will allow Company A to take 1 deposition and permit the service of 10 requests for production. James is also permitted the same. So what are these type of discovery devices?
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