Many, many things make me a geek, but the one that applies today is that I am a bit of a spy novel geek. Mysterious, nuanced, complex, maybe even a little dangerous, right? “Espionage”…the word itself just sounds cool. I like the intricacy of the battle, the subtlety of interplay and using influence to help one side and maybe hurt another.
Sounds a bit like recruiting, doesn’t it? Recruiting a key player requires gathering intelligence, knowing what’s going on inside your competitors, identifying key players and working with your exec team to close a nuanced deal. But while espionage and the idea of a recruiter as a type of market spy sounds cool, corporate espionage is not, especially when a recruiter might be part of the shadiness.
Here’s the story: Two appliance parts manufacturers are fighting it out in court, and it might cost one of the companies its livelihood. And yep, it all stemmed from a high level recruiting deal. From Canada Newswire:
Marcone charges competitor Servall with a scheme to set up a Northeast distribution network virtually overnight by hiring away several Marcone employees who left the company armed with critical customer and financial data. The misappropriated information included not only a list of 3,300 AP Wagner customers, but also all of the confidential and proprietary records concerning sales to date information, receivables and account aging, pricing, credit limits, account numbers and margin (profit) information on each customer.
This isn’t sour grapes…this is real deal illegal trade secret stuff. The story says that Marcone lost 640 customers, and two different courts ruled that Servall clearly stole from them. The courts strictly limited Servall client pursuits, and now they might have to go out of business.
So, some recruiter lifted two senior guys from Marcone with the promise of running a start up division. Along the way, though, somebody decided to take more than some extra binder clips on their way out the door. When you drop thousands of pages of pricing, margins and credit limit info in your bag, it’s not a mistake; it’s shady.
We know the execs were dirty, because they actually took the stuff, but what do you think about the recruiter? Did he play a role before or after the hire and does he carry some of the blame? There are basically two arguments:
- Not the recruiter’s fault—he was just doing his job; it’s not his problem the candidates went dirty on him. You can’t hang the sins of the candidate on the recruiter.
- The recruiter’s dirty—he either knew or should have known. To extract two senior folks out of a competitor takes months of effort, and at some point, the execs would have talked about the “value” they would bring.
Tough call, but I lean more towards hitting the recruiter, because it’s all related. If he did his job right, he would have been heavily involved from first contact to onboarding, and it’s hard to believe the idea of these jokers lifting thousands of pages of info from their previous employer did not come up.
What do you think? Recruiter as co-conspirator or clueless lackey? Neither choice is attractive, and it’s a terrible shame a bunch of innocent people are getting caught in the fallout.
You bring a very interesting question. I think I will add some complexity to it:
It all depends. Was it a junior recruiter our a seasoned and experienced one.
If it was a junior, then the blame should fall on the company for not coaching the person well.
If seasoned, then the person should have had some thought about this (but then again, maybe the recruiter never dealt with people at that level and by such, industrial espionage has never been as damaging so was never made aware of such a problem) and discuss this issue before hand but yes, some of the blame should be thrown in that direction in my books because they (recruiter / recruitment firm) are part of the issue.
Interesting problem… It is not black and white until more of the facts are exposed…
Take care.
Good question to ponder when we should all be thinking about business ethics, recruiters included (and I’ve known some questionable ones). I think there’s also a difference between an internal recruiter because we expect more ethical behavior versus an agency where we expect “other kinds of tactics” (not all, but some).
One would think that the “other side”, the hiring company, knew what they were buying when landing these two senior guys. This could have been a hiring company Exec who simply asked HR to do the paperwork or it might have been the Talent Exec or someone further down the food chain who discovered the “new talent”. From what I’ve seen the higher the level of the candidate the more likely he/she will have the higher-level inside connections where HR becomes the rubber stamp versus the driver.
This reminds me of something unfolding in Boston right now. Boston Private Bank has filed a lawsuit against a former top nonprofit lending executive, accusing him in federal court of stealing company secrets before he left for rival First Republic Bank. The complaint says the former BPB used his flash drive to copy more than 1,500 documents from his company issued computer. Was the driver someone at the recruiter level? My bet was he was dealing with an Exec outside of the HR function. Of course I have absolutely no evidence…just a guess. Of interest, here’s the link to the Boston story: http://www.bizjournals.com/boston/news/2011/05/17/boston-private-burned-by-rising-star.html?page=all
Ok maybe the recruiter knew they might do this, maybe he didn’t.
But unless the recruiter actively (whether implicitly or explicitly) encouraged the execs to take stuff then I can’t really see how it is the recruiter’s fault.
Great post and even better examples. You even used the correct legal terminology to describes “reckless disregard” as it might refer to the duty of care. Since there is a legal as well as an ethical question, allow me to chime in on both.
Generally – I think recruiters should be held liable for their actions like every person should be held liable for their own independent actions. Of course there should be exceptions.
A.) When the recruiter is acting directly in response to a direct request from their employer or client. In this regard they are acting as an “agent” or “independent contractor” so there is a vicarious liability issue which leads back to the client or employer. Say the VP of Finance gives you a name and tells you to recruit Jim out of company XYZ for example. In a more extreme example it could cost you your job or worse and could have duress implications.
B.) Even if not directly given a name per-se, if the discussion leads to the employer or client “requesting” direct sourcing as a tool then again I submit that there is vicarious liability.
My theory is that the job of a recruiter is to give the client what he wants. As a result, in order to hold him personally liable for any misdeads of the candidates there has to be actual intent and scienter. Things that are nearly impossible to prove. Also, I say that it would be against public policy to have recruiters liable for the misdeads of candidates. Nobody would want to work as a recruiter if this were the case! Recruiters keep the economy going and provide valuable opportunities to good people and great companies. Why punish the few for the “possible” misdeads of the few? There would be a “chilling” effect and recruiting as a profession and the economy at large would suffer.
I conclude, recruiters should not be held liable, unless you could prove malicious intent that outweight the general benefit to the public.
Furthermore, at what point does the recruiter’s liability for the misdeads of the candidate end? What if the misdeads happen a month later, 2 months later, a year later? Is that also the recruiter’s fault? Also, what standard should be used to measure the liability of the recruiter for the misdeads of the candidate? The “reasonable person”, the “reasonable recruiter”, or the “reasonable technical recruiter from a staffing agency”? Too much ambiguity in addition to the above reasons.
Also, I think the “knew or should have known” refers to negligence.