Monday Morning Memo: Why Job-Specific Contracts Are Not Good For Collection Issues

Job-specific contracts may seem like a great advantage to have. It is a great way to organize the contracts that you have. However, it might not be great if you have to collect your fees for several reasons. This concern is especially true for staffing and recruiting companies. You might be surprised that job-specific contracts are never a good idea in the staffing and recruiting industry as you can corner yourself and have a much harder time to collect your fees.

Why Job Specific Contracts Are Not Good For Collection Issues

Job-specific contracts can be a significant concern for staffing companies because of how you can corner yourself when you have to collect. We’ve had a client where they used a job-specific contract, and it was a miracle that we managed to collect a 50% settlement for them. So we’re going to explore the main reason job-specific contracts are a significant concern for you and why you shouldn’t use them.

Multi-Skilled Individuals Could Be a Concern

The big problem you could run into when you have a job-specific contract is if your candidate has more skills than hiring them out for. The vast majority of job-specific contracts don’t have any protection regarding a candidate being hired for any position other than the job-specific contract. If they are hired for any position other than what’s in the contract, then you might have a difficult time collecting your fee. You might not even be able to collect your fee because the courts throw out the case as it is unenforceable.

Check Your Contracts For Any Mistakes Before Using a Job Specific Contract

If you’re intent on making use of a job-specific contract, you must double-check the contract’s contents. You cannot imagine just how many copy and pasted contracts we’ve seen where one paragraph tells a different story from the next, and courts throw the case out because it’s unenforceable. You end up losing the court case before it even starts.

Wilson’s all-time favorite example of this is a case where the party that was responsible for all disputes was the Better Business Bureau. In their contract, our client gave authority to someone who has no authority so they could not sue. It was at the sole discretion of the Better Business Bureau, which made their contract unenforceable.

Key Takeaways

● If it takes our client 2 or 3 years to find a backdoor hire, guess what? Stats of limitation says you no longer have a debt.

● The clock really starts when you find out about it. We’ve seen it go both ways.

● Know what you’re putting in your contract.

● This is one of the times where it’s better to be a generalist than a specialist. Don’t make it job-specific.