Negligent Referral

Steven Cesare, Ph.D.

A business owner from Massachusetts contacted me the other day to talk about staffing issues. During our conversation, he shared an interesting story about hiring and then terminating a high-priced Maintenance Account Manager that he employed through an executive search firm located in Florida.

Last year, the business owner was short of staffing for qualified Account Managers. As resourceful as always, the owner developed a broad-based recruitment plan consisting of web-based approaches, employee referrals, professional networking, and an executive search firm. As luck would have it, the executive search firm had just come across a strong Account Manager who came highly recommended from his previous employer.

Impressed by the executive search firm’s glowing reference about the Account Manager, as well as his compelling resume, the business owner asked the executive search firm if he could contact the Account Manager’s previous employer to ask specific questions about the candidate. The executive search firm complied and set up the telephone meeting.

During the call between the Massachusetts owner and the candidate’s previous employer in Florida, the previous owner offered strong praise about the Account Manager’s character, work ethic, and skill set. Based upon the reference from the executive search firm, who was paid a large sum of money by the Massachusetts owner, in conjunction with the previous employer’s effusive recommendation and the candidate’s own strong interview performance with the Massachusetts owner, the candidate was hired, moved to Massachusetts, and began the next phase of his career.

Within the first year of employment, the Massachusetts business owner began to notice “issues” with his highly-recommended and highly-paid Account Manager. Job performance was lackluster, the personal character was repeatedly called into question, and that uncomfortable feeling that something was just not right, became too much to overcome. The decision to terminate the Account Manager was made.

Conversations during the termination process between the Account Manager and the business owner revealed that the Account Manager possessed several “sketchy” issues revolving around business ethics, improper working relations, and major character flaws during his employment in Florida; issues that were substantively-documented and well-known by the previous employer and the executive search firm. Yet were completely concealed by both parties to the prospective employer from Massachusetts.

This is a case of negligent referral. Both the previous employer and the executive search firm purposefully withheld accurate information for various reasons (e.g., avoid paying unemployment, securing a lucrative placement fee from the next employer, ridding themselves of a problematic employee), from the Massachusetts owner who like most of us, naturally presumed integrity from the other business owner and a paid search firm.

The status of pursuing legal action rests with the Massachusetts owner regarding whether he will file a formal claim against the two adjoining parties that misled him, causing him serious damage (e.g., time, money, reputation). Based on said deception, I believe a preliminary meeting with an attorney should occur.

If you have any questions or comments about this topic or anything else related to human resources, simply call me at (760) 685-3800.