What Do You Do When the Client Says “We Don’t Pay Fees?”

Jeff Allen Collection TipEditor’s note: Jeff Allen has heard every employer excuse you can imagine for not paying up — and dozens more that defy imagination. A few years ago he began documenting them in a weekly collections column. Because of the importance of collections, Fordyce will periodically reprise the most common situations he addressed.

What Client Says:

We don’t pay fees.

How Client Pays:

Sometimes it’s for “certain positions,” sometimes it’s not. Sometimes it’s “company policy,” sometimes it’s personal preference. Sometimes it’s in writing, sometimes it’s not. Sometimes it’s a low fee ceiling, sometimes it’s a no-fee floor.

But always, any such notice must be communicated in advance. That means prior to the referral.

How can you be bound by a policy you don’t know? A sign that wasn’t there? This is called the objective theory of contracts. What would a reasonable recruiter in your position think if the fee was “cleared” (whatever that means)? The client’s undisclosed intent is irrelevant.

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You must be prepared to show when and how you cleared that fee. You must be able to rap nonstop for 10 minutes about it, and back up your words with business records written at or near the time.

Anything showing receipt of the fee schedule is good. Anything showing acceptance of it is great.

These things meet your burden of proof as the plaintiff. Then the burden shifts to the client as the defendant. Can it prove that a written, rigid, no-fee policy has been communicated?

Of course not! That means a full five-figure feeforthwith!

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.