Wednesday, October 1, 2008

Placement Professionals

Today I had the opportunity to speak with the DFW Recruiters Network. Placement Professionals are faced with a variety of legal issues including covenants not to compete, non-solicitation covenants, anti-raid provisions, and the general enforceability of fee agreements with clients. All of these topics are the subject of this blog, but I wanted to take this opportunity to provide some helpful links to placement professionals.

Chapter 2501 of the Texas Occupations Code governs "Personnel Services". Personnel Services "means a person who, regardless of whether for a fee, directly or indirectly attempts to obtain permanent employment for an applicant or obtains or attempts to obtain permanent employment for an employee." Chapter 2501 places a number of requirements on those offering personnel services including a bond requirement, caps fees in certain circumstances, and sets forth a laundry list of 10 "Prohibited Practices". A plaintiff who files a lawsuit and asserts a violation of the statute can obtain attorneys' fees. Further, a violation of 2501 can also constitute a violation of the Texas Deceptive Trade Practices Act.

In terms of protection of placement professionals, 2501 states that a service file (defined as "a job order, resume, application, workpaper, or other record containing information related to: (A) an applicant; (B) an employer; (C) an employment position; or (D) the operation of a personnel service.") is a Trade Secret pursuant to Section 31.05 of the Texas Penal Code, the Theft of Trade Secrets criminal statute. Thus an individual who attempts to take a service file from his or her employer could potentially be subject to not only civil proceedings but criminal as well.