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A lawsuit may be inevitable when a hiring goes awry

Tuesday, February 2, 1999
Margot Gibb-Clark

This case-study feature provides expert advice on management and workplace issues. Examples are hypothetical or names have been changed. 

Louis, who has an MBA, took a job in a new city but was let go after just six weeks. It wasn't because of performance. The company realized that Joe, the manager who hired Louis, had problems. He is an alcoholic who had created Louis's job partly because he could no longer cope with all his work.

The company told Louis there is no need for his job. He was offered a few weeks pay, but not enough to cover moving or real estate expenses.

Louis has discovered that the headhunting firm that recruited him knew Joe and had done other assignments for him. Yet during the interview, when Louis had inquired, the headhunters professed not to know Joe well.

Louis doesn't want to get involved in a long lawsuit, but what should he do? Does he have any case against the headhunting firm? 

Richard Nixon, employment law lawyer and partner, McCarthy Tétrault, Toronto.

Louis's case sounds very much like what's known as "wrongful hiring," Mr. Nixon says. The concept arises from a Supreme Court of Canada case won by an accountant who moved from Calgary to Ottawa to take up a computer company job that never materialized as described.

In applying that case, Mr. Nixon says the hiring company and the manager representing it owe Louis a "duty of care" to make sure they are not misrepresenting the job he applied for. (Even if Joe believed what he was telling Louis, his statements were negligent.)

The Supreme Court said it is clear that someone in Louis's position would be relying on information given during the hiring interviews to make his career decision. The judges also said someone like Louis would sustain damages if those representations turned out to be false.

Since Joe had the company's authority to hire, the company is responsible for financial damages suffered by Louis. Mr. Nixon believes the headhunters are also liable since they too could be described as agents of the company.

Louis should try to get the company to settle, Mr. Nixon says. If that is not possible, a lawyer would likely advise suing the company, the headhunting firm, Joe and the individual headhunter. The purpose of suing everybody would be to get their statements under oath and find out as much as possible to help Louis, he says. 

Sussannah Kelly, executive search consultant and partner, Herman Smith Executive Initiatives Inc., Toronto.

All three stakeholders -- Louis, the company and the headhunters -- have responsibilities, Ms. Kelly says.

The search firm acted unprofessionally, she says. It should have looked at Louis's cultural fit with the client company, and that would have required an examination of Joe's management style.

"My concern is that they didn't tell Louis the truth," she says. If it had noticed serious problems with Joe, the search firm could have declined the assignment.

The hiring company also has a responsibility because Joe was acting on its behalf. If other managers hadn't caught on to his behaviour, it suggests proper performance appraisals weren't being done.

The company should look for another job for Louis or compensate him based on how long he worked for his last employer.

And Louis is ultimately responsible for his own career. He asked the right questions; he just didn't get answers. A lawyer would tell him his rights. 

Michael Ross, director of the Centre for Occupational and Organizational Psychiatry at North York General Hospital, Toronto.

"I'm not sure the headhunters have any liability," Dr. Ross says. If they had successfully dealt with Joe in the past, they may not have had reason to be suspicious this time.

But Dr. Ross believes the company has a moral responsibility for Louis. Also, if Joe isn't functioning, there is work to be done in that area. If the company wants to demonstrate that it puts people first, it might offer to let Louis do some of Joe's job.

Louis is likely feeling duped and angry. If he can contain those feelings, he is in good position to negotiate. He could say, "Look, there is a job here, maybe a bigger one that I can fill, but why don't we figure out what part of it I could do?"

On a deeper level, Louis likely feels somehow at fault for what has happened. He may not even be conscious of it, but he could feel vulnerable and full of self doubt. If he chooses legal action, the company might owe him a bigger settlement. After all, he would not be in shape to find a replacement job as fast as he normally would.

If Louis has been able to negotiate his way into part of Joe's old job, he will overcome some of this self doubt. If not, he may need some brief focused therapy.

If you or your company would like this column to address a particular people problem, contact workplace reporter Margot Gibb-Clark by fax at 416-585-5695 or by E-mail at mgibb-clark@globeandmail.ca

Copyright © 1999 The Globe and Mail