Causation Issues in Staffing Fee Disputes (Part 2— How to Win the Causation Game)

Causation Challenges is my term for staffing fee disputes where the employer claims, despite your referral, that someone else caused the hiring. 

In Part 1, we mentioned some common examples. We said that absent an exclusive listing or other contractual provision, New Jersey requires you to be the “procuring cause” of employment in order to earn your fee.

The problem is that after you’ve provided your service, causation requirements take control of your fee away from you.  For example, you can’t control whether a subsequent agency will refer your candidate, or whether the employer will let you arrange the interview.  You can’t prevent the employer or candidate from re-contacting the other in the future, and you can’t foresee whether they’ll claim to know each other already.

What you can do is contract around such issues so they don’t deprive you of your fee.  Your fee agreement should eschew causation and focus on priority.  For example, never say anything like, “you owe us if, as a result of our services … .”  Instead, create an exclusive right for candidates you present first.  You can also say that accepting your referral supersedes any prior connection between the employer and the candidate.  In other words, the way to win the causation game is not to play it.

In my e-book, The National Fee Collection Guide for Staffing & Placement Agencies, I provide some sample language for these suggestions.

For more information on fee disputes and how to defeat (or avoid) them, see The National Fee Collection Guide for Staffing & Placement Agencies and The Employment Agency’s Guide to Getting Paid (Quickly) in New Jersey

This material is for informational purposes only and should not be construed as legal advice.  No person should rely on this information without seeking the advice of an attorney.


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