Jeff’s On Call!: Crazy Contract Provisions

Nov 30, 2010

This week’s inquiry comes from Maureen Knowlson:


I really enjoy your articles in the Fordyce Letter. I have found your column Jeff’s On Call! to be very helpful. I hope you can help.

Here’s my question(s):

I have been working with a company for over 15 years. We work a very specialized niche so there are not a lot of jobs to fill each year. We have made nineteen placements in that time. They were all completed without a hitch. The company called us, we gathered the info, we sent about three resumes, they interviewed, and hired. Normally, took about one month. Sounds great, huh?! We have also weathered the three changes of HR Managers. Mostly, because our original contact is now VP of HR. I have two issues at this time…

First, they have become very good with LinkedIn. Now, when I present people they tell me they already have them from LinkedIn. They don’t have the resume nor contacted the person but tell me I can’t present them because they have them. No discussion has gotten them to see the light.

Second, and my important question. They have implemented a very sophisticated database / portal system for recruiters to enter candidates. Typical scenario. But, here is the problem. Any candidates entered will stay in the system three years before they are automatically purged.  BUT, we lose ownership of them after one year. So if the company hires anyone we put into the system after one year they do not owe us a fee. We cannot reenter them after one year. We can not delete them ourselves. Is this legal to take something from someone and tell them when they are no longer obligated to pay for it? What can we do besides refusing to work with the company? Any suggestions? By the way, I have another company that employs a similar database but keeps resumes for ten years! I just refused to play.

Just because someone puts it in their contract does it make it legal?

Any help is appreciated.


Hi Maureen,

Thanks for being a long-time Fordycer! I’m delighted to assist.

Let’s get the legalities out of the way before we get down to business: There are none. You have a client negotiation issue, not a legal one.

These days, “clients” think they can change the rules to suit themselves. This client has decided that Linkedin is its own personal ATS (applicant tracking system). H-m-m-m. So every candidate between the ages of one and three’s named Gotcha Good, ay? Let’s see what we can do about this mess.

Everyone does a candidate de-brief after the interview. But how about a candidate pre-brief before the sendout?

Pre-brief every candidate with the following seven questions:

  • Are you on Linkedin?
  • If so, what are all the names you use?
  • Have you connected with anyone regarding a job?
  • If so, when were you contacted?
  • Who contacted you?
  • With what employer?
  • Did you send the employer a resume?
  • If so, what is the status of your candidacy now?

Since you want a written reply from the candidate, this is best done through e-mail.

Let’s assume the candidate’s on Linkedin but hasn’t applied or been submitted. (That should include just about everyone.) You can decide not to present the candidate, but why?

Just present as you normally would, but do not disclose the candidate’s name. Simply call the client and give her the candidate’s background, along with the information you obtained by the seven questions. If the client likes the background, before you disclose the name of the candidate, confirm the interest and verify by an e-mail that a fee will be due. Then obtain a reply to lock the client into a fee if the candidate is hired.

Now you’re home free. This eliminates all of the “gotcha” game-playing.

You may recall that in The Allen Magic Collect-A-Fee System published in the February 2009 TFL, I wrote, “When you’ve identified someone an employer thinks it needs, you can get whatever you want.” Let the magic of that work for you.

Next, moving on to that one-year referral period, two-year freebie nonsense:

Again, perfectly legal. You’ve agreed by staying in this abusive relationship. But why not set up an intervention?

Start by calling the latest human resourcer, and explain that this needs to get resolved. Either there’s a one-year referral period or a three-year one. You say:

Look, I know you’re just following the procedure. I like working with you, and we’ve had a mutually successful relationship with Stealadeal. So I’m going to take this up with your top management. I just didn’t want to go around you.

As a former HR manager, I promise you that nothing – nothing – shakes up an overheader like going over his head. He’ll try to make you happy. If he can’t, he’ll still do everything possible to keep the dustup within HR. So you may get action just by standing up to the messenger.

Again, your position is really simple to understand: Either there’s a one-year referral period or a three year one. Be as nice as you can be, but don’t budge. It’s not you against the resourcer, it’s both of you against the problem – an “inconsistency” in the policy. (See how non-confrontational we can be?)

That’s his one chance. If you’re not satisfied with the response, tell him so respectfully. Then write a letter to the CEO. Not an e-mail. A formal, typed business letter on your letterhead, sent by regular mail. You can copy in the human resourcer, but nobody else.

Here are the paragraphs the letter should contain (in order of presentation):

1.  The reason you are writing and a summary of your efforts to get the matter resolved.
2.  The background of your company and 15-year track record with Stealadeal. Mention any of those nineteen candidates you placed at Stealadeal who have been promoted to responsible positions.
3.  The former referral period and why it worked well for both parties.
4.  The things you do at no charge. Might I suggest:

    • Interviewing hiring managers regarding each position.
    • Researching national databases and networking for candidates unknown to   Stealadeal.
    • Identifying and screening candidates unknown to Stealadeal.
    • Obtaining detailed background information on qualified candidates unknown to Stealadeal.
    • Recruiting and motivating the most qualified candidates to interview with Stealadeal.
    • Presenting the most qualified candidates to Stealadeal.

Then end the paragraph with an estimate of the average time it takes to complete the pre-interview process on each candidate presented. (Search Research Institute estimates it’s 1.9 hours, so use that if you’re not sure.)

5.  The new referral period policy, and why it makes no sense for you to comply. (Be dipomatic, say, “it’s an inconsistency,” “it must be an oversight,” and talk about “unintended consequences.” Then give the CEO a compelling reason to change the policy – to be a hero.
6.  Give the CEO ten days from the date of your letter to reply. Write something like,

We are in the process of commencing some new search assignments, and would like to have this matter resolved on or before _______________. We also have qualified candidates ready to present for the _______________ and ______________ positions who are considering other opportunities. So unfortunately, we will be unable to continue assisting Stealadeal if the matter cannot be resolved by that time.

I will be available should you wish to discuss it, and look forward to another fifteen years of successful placements with Stealadeal!

We’ve helped recruiters for years with these kinds of letters. They work because they’re loaded with logic and bypass the army of marching administrators. Just always follow the chain of command, and never go around the human resourcer. Go through her by shooting straight up to the highest-ranking executive.

There you have it, Maureen. Have fun with this caper, and . . . best wishes for success!

Thanks again for asking. I know you’ve helped many out there now being hammered by those contingency-fee employers we so loosely call “clients.”


If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

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