Interesting concession from a TPR

I had a meeting with a TPR today, and they told me something I hadn't heard before.

They told me that with a certain client, they could not place an employee of theirs ever. Even if the person approached them first. If they did they had signed an agreement that they would pay a $60,000 fine.

I'd never heard of that... sounds like a strange thing for a TPR to agree to, but a great thing for a corporate Recruiter to get in their agreements.

Is this common?

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Permalink Reply by Maureen Sharib on February 5, 2009 at 7:39am

I dunno if it's common but it smacks of free trade violation to me (here in the states). It's the "ever" part that I find disturbing.

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Permalink Reply by Todd Kmiec on February 5, 2009 at 7:57am

You know, I used to see that kind of thing in contracts but not so much anymore. I've never seen the "ever" part that Maureen refers to, that is over the top. I think of it as more of an unwritten rule in the industry that you don't recruit from your clients and if you do they are going to fire you. However, putting aggressive policies like that in a contract indicate a lack of trust and is really not in the spirit of what's best for this industry. The great thing for all of us is that we are all on the same side of the table. When a placement is made everyone wins. The best relationships are based on that approach and not hard language in the contract. It's pretty easy to fire a TPR if they aren't doing good work, are difficult to deal with, or are doing something you don't like.

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Permalink Reply by Jim Durbin on February 5, 2009 at 8:00am

Sounds like a weak salesperson. If I signed something like that, I'd have a guaranteed yearly income from the client - something in the range of $60,000.

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Permalink Reply by Joshua Letourneau on February 5, 2009 at 9:09am

Dan, there may be some global similarities in the Search business, but I haven't seen such a thing in North America. Frankly, I would be out of place to assume I could speak to your situation in Australia.

However, I will say this: The number of Americans currently collecting unemployment benefits rose to the highest levels they have ever been (since our federal gov't started collecting records on this in 1967). For the week ending 1/17/09, those collecting unemployment were at 4,776,000, eclipsing the prior mark set in November 1982, (4,713,000). We have more data coming out this Thursday, I believe . . . and projections are that job losses and unemployment claims are on a steep rise.

In an environment like this, where there are so many people out of work, so many job losses that are not being recreated yet, etc., there are firms that must do what they have to do to survive. This may mean giving up quite a bit of leverage . .. but the above is extreme. A 2-yr non-solicitation clause would be more of a realistic concession.

P.S. As I write this, our new U.S. President is at a press conference speaking to our loss of jobs and economic struggles.