Filing a Lawsuit against an Employment Agency

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 What Is an Employment Agency?

An employment agency can be described as an organization whose purpose is to assist individuals in finding jobs and securing employment. Alternatively, an employment agency may be hired by an organization in order to find the right job candidate for a specific role. In other words, employment agencies act as an intermediary between workers and companies, as well as can be hired to work on behalf of either a company or an individual worker.

In general, employment agencies typically provide a wide range of employment services, such as editing resumes, placing temporary candidates, and securing interviews at prestigious companies.

In most instances, however, an employment agency will offer services to job seekers that are personally tailored to the needs of each individual job seeker. Thus, it should not be surprising to learn that many employment agencies operate as private, small businesses. Some employment agencies may even focus on particular job specialties, such as roles in the technology or finance sector.

For example, if you are searching for employment with a financial institution, then an employment agency can help you find open positions and schedule interviews with companies in the finance industry. They can also review your resume for errors, provide tips to ace your interview, and follow-up with the company regarding its decision after your interview has ended.

In addition, since many employment agencies operate as private companies, some of them may also charge a placement fee to either the job seeker for helping them land a position.

Unfortunately, there are some legal issues that can arise when working with an employment agency. Thus, if you need help filing a lawsuit against an employment agency, then it may be in your best interest to consult a local employment attorney for further legal advice on the matter.

What Are Some Common Reasons for Filing a Lawsuit against an Employment Agency?

Some common reasons for filing a lawsuit against an employment agency include: 

  • Breach of contract;
  • Misrepresentation or negligent misrepresentation;
  • Wage and hour disputes;
  • Loss of income claims;
  • Discrimination; and 
  • Violations of various state statutes.

It should be noted that some of the reasons in the above list may only be permitted in lawsuits filed by workers, whereas others may be reasons that can be applied by employers. This will be discussed in further detail throughout the sections provided below.

Can Employment Agencies Be Held Liable for Employees?

Employment agency lawsuits are largely dependent on the provisions of the contract that was formed between the interested parties. Generally speaking, an employment agency has a duty to disclose truthful information about a job candidate that is being presented for employment to a specific employer. 

While an employee may not be able to sue an employment agency for getting fired or for not finding them a job, an employment agency may be held liable for an employee’s actions. Some legal issues that an employment agency may face when being held liable for an employee’s actions include:

  • Breach of contract: For instance, if a contract contained specific provisions regarding a placement fee and the employment agency did not honor them, then the agency could be held responsible for breach of contract.
  • Negligent misrepresentation: Employment agencies can be held liable if they make false statements about a prospective employee, whether the statement made was intentional or not. For instance, if they lied to an employer about a candidate’s qualifications, or alternatively, if they tricked an employee into accepting a job offer by providing inaccurate information about the salary.
  • Violations of state statutes: Both contracts and private employment agencies are typically governed by state statutes. For instance, a principal-agency relationship, which is essentially what the employee-employment agency relationship is modeled on, is governed by state law. Thus, if an employment agency fails to obtain the proper license to run its business or discriminates against prospective job candidates, then they could be held liable for violating a relevant state statute.

It is important to note that an individual who uses the services of an employment agency is generally not considered to be employed by the employment agency. Thus, an employer may not sue an employment agency for vicarious liability since an employer-employee relationship has not been established between the agency and the employee.

However, an employer may be able to sue an employment agency under the rules governing a principal-agency relationship. This is especially true in cases where an employee has hired and authorized an employment agency to act as their agent in securing placement at the employer’s place of business. 

That is unless the contract between the employment agency and the employee has ended due to the fulfillment of all contractual duties as specified by the contract. Then, the employer may need to settle the issue directly with the employee. 

Are Employment Agencies also Liable to Employers?

In some instances, an employment agency may also be liable to an employer. Similar to the issues that may arise in connection with a lawsuit involving an employee and an employment agency, an employment agency can be held liable by an employer for the following issues:

  • Negligent misrepresentation;
  • Breach of contract; and/or
  • Violations of various state statutes. 

As such, employment agencies must take extra precautions when making statements about a prospective employee to an employer. The reason being is because some job roles require that an employee be qualified or certified to perform the position. 

For instance, if a particular job role requires that an employee has a professional license and an employment agency recommends an unlicensed candidate for the position, then an employer may hold the employment agency liable for damages that resulted from hiring an unqualified candidate due to the agency’s misrepresentations. 

What Type of Evidence is Needed in a Lawsuit Against an Employment Agency? 

The type of evidence that is needed in a lawsuit against an employment agency will depend on the legal issues or claims involved in the lawsuit. Some types of evidence that may be used in such lawsuits can include:

  • The contract between the employment agency and the client (e.g., either an employee or employer);
  • Any addendums or modifications added to the most recent version of the contract;
  • Communications between the employment agency and the client that support the type of claim being filed (e.g., emails, recorded messages, texts, etc.); 
  • Witness statements or statements provided by other individuals who were affected by the issue at hand; and
  • Various other documents, photos, videos, and so forth that would prove and/or support the plaintiff’s claim. 

What Damages are Available? 

A plaintiff who brings a successful lawsuit against an employment agency may be entitled to the following types of damages:

  • Monetary damages;
  • Liquidated damages;
  • Punitive damages; and/or
  • Injunctive relief.

In addition, cases that involve violations of state statutes may offer different remedies based on the laws of a particular state.

Do I Need a Lawyer for Legal Issues with an Employment Agency?

It can be very difficult to succeed in a case that involves a claim against an employment agency. For one, such lawsuits tend to involve several parties and are typically governed by laws that often vary from state-to-state. The terms specified in an employment agency contract may also pose additional legal problems that require the assistance of a legal professional. 

Thus, you may want to consider hiring a local workplace lawyer for further legal guidance. An experienced workplace lawyer can provide valuable legal advice regarding your rights under the relevant laws and can discuss your options for legal recourse. Your lawyer can also discuss the potential remedies you may be able to recover in a lawsuit against an employment agency. 

In addition, your lawyer can also help you gather the necessary evidence and can provide legal representation in court. Should you and the employment agency decide that you would both prefer to settle the issue outside of the courtroom, your lawyer will be able to negotiate on your behalf for a more favorable settlement arrangement with them as well.  

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