First, this article is not intended to be the last word from a legal perspective. We are not providing legal counsel but we have made an effort to present both the legal, ethical and business perspective of what is becoming a nagging issue as the candidate talent pool tightens and recruiting firms become forced to better define clients versus non-clients for the purposes of sourcing talent.

Secondly, let us define what we mean by "non-solicitation" as it applies to the search and recruiting/staffing industry. For the purposes of this article, "solicitation" refers to a recruiting firm's representing a candidate currently working with a client company.

Of course the term "solicitation" itself is inaccurate as quite often candidates seek the search firm out rather than the search firm "soliciting" (proactively contacting) the candidate. Yet this is the term most often used in contracts when addressing the issue of a search firm's responsibility when it comes to representing candidates working within a company that is using that same search firm's service.

Thirdly there is the problem of defining who or what a 'client' is which can differ drastically from the search firm's perspective as opposed to the client company's perspective. Who is a client? How long are you a client for? Are you a client if you have not used the firm's services for a year or more?

It is because the term 'client' and 'solicitation' are rarely well defined in fee agreements with search firms that cause such misunderstandings to begin with.

Here are some answers to actual questions asked by hiring company management.

Q 1.) "I signed a contract with a search firm two years ago, aren't we now 'their client' and should they be staying away from recruiting our own employees. Don't we now have a relationship?"

Answer: No. If that were the case every company would sign a contingency contract with every recruiter that called to maintain the facade of a relationship and discourage internal recruiting. Believe it or not some companies actually play this game with recruiting firms.

For starters there is a big difference between retained versus contingency recruiting agreements.

In the former there's generally a more descriptive definition as to what the relationship is. While in the latter there is little to no mutual 'marriage' or 'commitment' whatsoever except when a candidate is hired and a transaction takes place. This is what the company has bargained for in return for not having to pay until performance is consummated in the form of a hired candidate.

A contingency contract with a search firm alone collecting dust in a company file drawer does not constitute any relationship with that search firm unless consideration is exchanged for a service.

Even then, one transaction does not a client forever make.*

Q 2.) "We used this firm to hire and now we're finding out they are calling our employees...are they with us or against us here?"

Answer: Again this depends on the 'Non-Compete' time period you bargained for in your contract. Notice I use the phrase 'you bargained for'. If something is important to you then you must request it. Excluding a spelled-out non-compete clause inserted into your specific fee agreement or recruiting contract, most search firms abide by national association ethics and guidelines set forth by the organizations they are a member of.

Top Three Most Popular Recruiting Associations:

AESC ¡V www.aesc.org
Association of Executive Search Consultants
Does not specify non-compete periods -- leaves it to individual contracts

NAPS ¡V www.recruitinglife.com
National Association of Personnel Services
Ethics guidelines stipulate a twelve month non-compete period from the date of the last transaction (hire/placement, etc.)

ASA ¡V www.americanstaffing.net
American Staffing Association
Originally this organization was mostly for temporary and contract employment providers. They have evolved to include permanent staffing in recent years and competing head to head with NAPS. Its Good Practices code does not cite non-compete issues and address mostly temporary staffing issues such as payroll, etc.

Q 3.) "Sometimes we hire and then skip a year -- then hire more. Is it fair to be open to internal recruiting just because one year has lapsed with no activity?"

Answer: It is highly doubtful that any recruiting firm is counting the days so they can immediately start contacting your employees on the 366th day of the expiration of their non-compete obligations.

Nevertheless -- if you wish to enhance the contract clause addressing this issue, most search firms are open to fair bargaining of a longer perio d of time or other revision providing:

a. You make a request for such

b. Compensation and fee rates justify the added service being provided

c. You are prepared to reconsider any previous cut rate or discount fee you may have been granted.

Read Part II of this article in next month's Recruiters World in Review

* The American Lawyer – Law.com reprint by Jeffrey Boxer, Esq

Frank G. Risalvato, CPC is president of IRES, Inc. His newly redesigned recruiter training site is updated weekly with loads of original content and is found at www.searchwizardry.com. He has been speaking and providing recruiting training materials to the search profession's trade groups since 1987. His Recruiter Training Guide is available online for electronic download. Contact Frank by phone (973) 300-1010 or email him: frank@searchwizardry.com. Be sure to sign up and be the first for his soon-to-be-released book The Kentucky Fried Secret Recipe to Recruiting Millions®.

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