Read This Before You Sue

Placement law has really changed. It used to consist of contract and labor law — good-faith agreements interpreted differently, arguments over wages, or other items that arise in business transactions. The parties know each other, the dispute centers around money, and the amount is known. Litigation is a gamble, but legally it’s more like playing bridge. No matter how much money’s on the table, the stakes aren’t that high.

The law calls the amount in the pot “compensatory damages.” They’re designed to compensate someone for what he expected out of the deal. Some jurisdictions call them “expectancy damages.”

Recruiters don’t play bridge much. I remember watching a table full of them at a conventioPrintn in Atlantic City. One was snoring, another was being propped up by his manager, and this one guy kept arranging his cards in a blackjack hand. Finally that fellow snoring clunked his head on the table. This startled the one being propped up, and he reflexively made an unprofessional gesture with his hand. An opponent thought he was cheating by signaling his partner, and broke up the game. Everyone was so disoriented, they left their scorecards on the table and started playing the penny slots. I flashed my C.P.C. pin and went up to my room.

Let’s face it — you’re a high roller. When you sue, you sue. Obtaining compensatory damages is about as satisfying as sending out candidates for a filled job. Compensatory damages are all you get on a breach of contract theory. I checked my law books with the concierge, and will write this PTL like a workshop.

Where the Action Is

The action in placement law is in the area of torts — the violation of non-contractual, civil (non-criminal) rights.

Proving negligent (unintentional) torts leaves you with compensatory damages, much like proving breach of a contract. These are called “foreseeable damages” rather than “expectancy” ones, but the cap is still there. No fun at all.

But if you can prove a “tortfeasor” is liable for “intentional wrongdoing,” a judge or jury will award punitive and exemplary damages. Punitive ones punish, and exemplary ones make an example of the defendant. There’s no “actual damage” limitation as in contract, labor and negligence law. There’s not even a formula for computing the damages. It’s totally discretionary with the court.

So the intentional tort area is a high-roller’s game — win, lose or draw. The rules aren’t clear at all. Mix them with disputed facts, and you have an all-or-nothing crapshoot.

A. Intentional Tort Theory

Here are the elements that must be pleaded. Then the plaintiff has the burden of proof (by a “preponderance of the evidence”) for each:

1. Act: Nothing happens in law unless there’s some overt conduct. This is so obvious, legal scholars usually don’t even consider the act an element of the “prima facie” (basic) case. There’s no law against contemplating. I do it all the time.

2. Duty: A duty arises in several ways. In a contract, you create it. In an employment relationship, a statute (labor law, etc.) imposes it. In the area of negligence, a general “reasonable duty of care” for others is recognized. But in the area of intentional torts, the duty is “breached” by consciously interfering with the rights of another person.

The uninitiated think that a duty is a static, rigid ascertainable “line”: If the defendant crosses it, he gets zapped. If he doesn’t, he’s safe.

But law library shelves and legal websites are filled with cases that move the duty line all over the place; “duty” is a variable that depends on circumstances. Each case is different, each person hearing it is different, and each decision is different.

If you can’t remember all that, just remember this: Each lawyer is different too.

3. Breach: Once the duty line has been drawn, the next “element” is breach — establishing the defendant crossed it. That means facts. If you’re unable to prove them, you’re just recruiting someone for his own job.

4. Intent: Someone can consciously want to cross the line, but the law only zaps him if that intent couples with the act of doing so. This should make sense to you, since you could intend to breach a contract or violate a labor law, and nobody would care about it unless you did something in furtherance of that intent.

Conversely, you could stagger around and cross the duty line like that person over there who used too many free cocktail coupons. You’d only be negligent.

5. Causation: As in “cause and effect.” The plaintiff must prove that all four elements we discussed so far resulted in the injury (“damages”). It may seem obvious, but disputes over causation are extremely common because the natural backup position of a defendant is that:

  • Even if he did the deed,
  • Even if he intended to do it, and
  • Even if the plaintiff was injured,
  • The act didn’t cause the injury.

Legal longhairs have written volumes on causation. But in the area of intentional torts, if damage can be proven as a result of the act, there’s always some state or federal case you can cite to forge links in the “chain of causation” from that act to that result. The arguments invariably surround “breaks” in the chain — events that occurred after the act, but before the damages.

6. Damages: This is the final element. Once actual damages are proven, evidence of malice, deceit, wantonness or other bad words will move the case into the area of unlimited punitive and exemplary damages.

How You Can Get Into Trouble

Now that you’re an expert on intentional tort theory, let’s plug in the placement “causes of action”:

B. Placement Intentional Torts

Since most tort law has arisen through case law (appellate court decisions) rather than statutes, it varies from state to state. It’s an evolutionary process whereby new decisions are “distinguished” from earlier ones, or directly overrule them. Similar changes occur in the federal court system.

So always check with your lawyer before using these big words:

Breach of Fiduciary Duty: Sometimes this “sounds in contract” (meaning nothing beyond actual damages) and sometimes it “sounds in tort.” When it does, and the conduct is intentional, an ex-employee can be very liable for taking, using and billing from your client and candidate files.

You can be very liable to employers too. If the candidate’s closet is opened and you knew about the skeletons jangling around, you’ll be sorry you ever called that employer a “client.”

Assault: An intentional act (not just words) that places the victim in “apprehension” (realization) of immediate bodily harm. There is every possible variation in the cases of what constitutes an “act” and what constitutes the “body.” But assault is largely theoretical, because the big issue is the actual touching that causes the injury. An assault can occur if there’s an argument in your office, a candidate is involved in a confrontation on the job, etc.

Battery: An intentional harmful or offensive touching of another person. If he knows it will happen, there’s an assault too. For obvious reasons, battery is a much more serious tort than assault.

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False Imprisonment: An intentional confinement of a person without his consent (not just against his will as in the crime of kidnapping). We see this constantly in trade secrets cases, where an owner detains a recruiter to interrogate him, search his briefcase, etc.

Intentional Infliction of Emotional Distress: The word “intentional” is used because there’s an allied tort of negligent infliction of emotional distress. You can think of intentional infliction of emotional distress as an assault that upsets the victim, resulting in demonstrable physical injury. As workers’ compensation law has recognized stress claims, the number of these cases has diminished. It was never a major area of placement law anyway — if people could get rich from job stress, we’d all be relaxing on the Recruiting Riviera.

Slander: The spoken false statement of fact about someone that injures him. If it’s job-related (qualifications, experience, competence, etc.), the tort is called slander per se. That’s because damages are presumed since this is “per se defamation.”

Libel: Please spell it correctly; it’s not “liable.” But it is the written false statement of fact about someone that injures him. As with slander per se, libel per se occurs when the falsity concerns someone’s job. Damages are presumed, since this is also “per se defamation.” Defamation is covered in Chapter 77 of Placement Management entitled “Libel And Slander: Liability For Candor.”

Invasion of Privacy: An elastic, expanding exploding area of law that now includes everything from taping a recruiter’s phone calls without consent to cleaning out her desk. The placement process is risky too — there’s exposure in everything from the cold-call to the reference check. For more on this subject, see Chapter 52 in Placement Management entitled “A Candidate’s Right to Privacy.”

Conversion: The civil counterpart of theft. It now can include taking trade secrets (good) but also withholding commissions to retaliate for doing so (bad).

Fraud: Misrepresentation by either knowingly stating something materially false or omitting something material when there was a duty to disclose. Fraud includes everything from, “Everyone knows recruiter employment agreements are unenforceable, but sign it anyway,” to, “His last employer says he’s eligible for rehire,” but omitting, “…as soon as he’s out on parole.”

Inducing Breach of Contract: Since almost every cold-call is done with the intent to cause a prospect to breach his oral employment contract with the source, the line is drawn far away at malice. Recruiting for a fee is perfectly legal — raiding an employer who hired your candidate, but doesn’t want to pay a fee isn’t. Be careful about threatening an ex-recruiter’s new employer too. The resulting loss of her job makes a potent cross-complaint (counterclaim) when you file a trade secrets lawsuit.

Interference with Contractual Relations: Generally, this tort consists of “maliciously obstructing” a legally-binding relationship by making a nuisance of yourself. The fact patterns are similar to those for inducing breach of contract. The most common one is when you drive the source’s gatekeepers crazy with funny phone calls.

Interference with Prospective Economic Advantage: A similar tort to inducing breach of contract and interference with contractual relations, but there doesn’t have to be a valid contract

Solicitation: An offer to do any of the above. Words alone are usually enough to constitute an “act” that will invoke liability.

Conspiracy: The acceptance (and therefore agreement) to do any of the above. Under the majority rule, some act must occur — but it doesn’t take much. Sending a candidate’s falsified resume is plenty. So is an employer agreeing with him to avoid your fee, then not paying it.

C. Choose Your Lawyer Carefully

As you can see, the intentional tort area is wide open. Let’s take a walk over to the casino newsstand and see what Roger Golde said in Can You Be Sure of Your Experts?

As clients we are properly concerned with our own desires and our side of the affair. Your lawyer however, must concern himself with all sides of the dice. Only if your lawyer is able to make a full (and even convincing) presentation of the other sides of your case, can he really select the best course of action for you.

Golde cited a comprehensive Prentice-Hall survey that listed the positive and negative factors clients and lawyers consider important. The results were as follows:

lawyer attributes - jeff allen articleAs you can see, clients look to the human relations ability of the lawyer. The most important positive attribute for lawyers was “Results.” It doesn’t even appear on the client side! It should — right at the top. If you’ve ever lost a high-stakes case, you agree.

We covered choosing a lawyer fully in Chapter 52 of “The Placement Strategy Handbook” entitled “How to Select an Attorney.”

The big wins in placement law. Big rewards, but big risks. Just don’t bet more than you can afford to lose.

More than thirty-five years ago, Jeffrey G. Allen, J.D., C.P.C. turned a decade of recruiting and human resources management into the legal specialty of placement law. Since 1975, Jeff has collected more placement fees, litigated more trade secrets cases, and assisted more placement practitioners than anyone else. From individuals to multinational corporations in every phase of staffing, his name is synonymous with competent legal representation. Jeff holds four certifications in placement and is the author of 24 popular books in the career field, including bestsellers How to Turn an Interview into a Job, The Complete Q&A Job Interview Book and the revolutionary Instant Interviews. As the world?s leading placement lawyer, Jeff?s experience includes: Thirty-five years of law practice specializing in representation of staffing businesses and practitioners; Author of ?The Allen Law?--the only placement information trade secrets law in the United States; Expert witness on employment and placement matters; Recruiter and staffing service office manager; Human resources manager for major employers; Certified Personnel Consultant, Certified Placement Counselor, Certified Employment Specialist and Certified Search Specialist designations; Cofounder of the national Certified Search Specialist program; Special Advisor to the American Employment Association; General Counsel to the California Association of Personnel Consultants (honorary lifetime membership conferred); Founder and Director of the National Placement Law Center; Recipient of the Staffing Industry Lifetime Achievement Award; Advisor to national, regional and state trade associations on legal, ethics and legislative matters; Author of The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide and The Best of Jeff Allen, published by Search Research Institute exclusively for the staffing industry; and Producer of the EMPLAW Audio Series on employment law matters. Email him at jeff@placementlaw.com.

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