Non-paying client?

Hello Everyone,

I wanted to request some advice regarding a non-paying client that we currently have. This is regarding the placement of two of our candidates.

-One of the candidates was hired as a temp, and we were in charge of the payroll, and went through a third party as we do not typically work in a temp capacity. They were paid in a timely manner, but I doubt they would have been if it were the client paying them.

-Both positions were based on a contingency contract, and the hiring manager stated these positions have a high turnover rate.

-One position was a perm position with a thirty day replacement only guarantee. The candidate left three days before the end of the guarantee, but our contract states in events of non-payment, the guarantee is void.

Not only are we out the time and money spent on the search, the temp candidate was paid thousands of dollars that we have lost. The company is blaming us for the candidates quitting, despite the position being high turnover. The hiring manager has been behaving erratically, and only answering when we called from a blocked number. When asked if they received our invoice, they told us not to call them anymore.

Most of our clients are honest, ethical and professional and we are pretty embarrassed to have worked with them. We usually receive very positive feedback from our clients. While we are certainly restructuring our contracts to require a deposit from companies we have not previously worked with, this company owes us quite a bit of money.

We have sent certified mail without a response. Of course, we are moving forward in taking legal action but have not been through this process before.

Does anyone have any advice?

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Permalink Reply by Jacqueline Bozorgi on September 9, 2014 at 3:58pm

Thanks for all the input on your past experiences! This is very frustrating, especially when one of the employees was already payrolled by us.

Jim Patrick, did you have a venue and/or arbitration clause?

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Permalink Reply by JP Sutton on September 9, 2014 at 4:30pm

Yes, I did. The client told me to stop contacting them and that if I had a problem, they would see me in court. So, I filed my claim with their registered agent and went to court. In the end, I won my case and they paid me within 2 weeks of my claim. If they still do not pay you, you can go to the Marshall's offices and Levy their capital equipment (eg. computers, furniture, etc.) in order to get your restitution, or if you have an account number from a previous check they paid to you, you can levy bank accounts as well (preferred method). There are a couple of ways to get it resolved if they still want to act difficult at that point. But, I will advise you, it took some time to get to the resolution stage.

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Permalink Reply by Jacqueline Bozorgi on September 9, 2014 at 5:04pm

Jim, thanks for your feedback. I'm sorry you had to go through that. Your venue was located in your home state? I'm wondering if we can just hire a local attorney to represent as I don't think flight + hotel expenses are in the contract. This is going to be a headache :-/

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Permalink Reply by JP Sutton on September 9, 2014 at 6:01pm

Yes. My venue is always my conference room in my office. I definitely think hiring a lawyer is the way to go in your case. Hopefully your contract states the client is liable for all attorneys fees. Find an attorney to first send a demand letter and pay that fee. Sometimes once a company sees that you have hired a local attorney to represent you, then they may pay or try to settle at least. If not, be prepared for a fight that usually lasts a year or so. I know exactly how you feel and definitely hate it for you. But like I have always been told, in business you will have to eventually go to court one day. But the experience alone is invaluable in my opinion. Good Luck!