Recruiters ratting on candidates could land themselves in court

Recruiters that tip off clients when approached by one of their client’s employees run the risk of being sued for damages.

That’s the warning from employment lawyers, commenting on a case brought by an investment banker claiming he was fired after a recruitment agency he approached tipped off his employer he was looking for a new job.

The New York Post reports Goldman Sachs equity analyst Brandt Blimkie claims a friend urged him to contact recruiter Joe Goldsmith about a new job but Goldsmith’s agency, which was not named and also represents Goldman Sachs, refused to work with him. 

According to the Manhattan Supreme Court lawsuit, Blimkie claims just two days after approaching Goldsmith, his boss knew all about his search for a new job, adding that while he was not fired immediately, he was stripped of $500k (£366k) worth of bonuses in the 18 months before his eventual sacking. For his part, Goldsmith’s lawyer said he will “vigorously defend” himself against the “meritless” allegations.

Dr Sybille Steiner, partner solicitor at law firm Irwin Mitchell, told Recruiter the case highlights how essential confidentiality is between recruiters and their clients, adding failure to do so could result in breach of contract and compensation claims and will invariably lead to bad press and a tarnished reputation.

David Israel, a partner in the employment law team at the London law firm Royds Withy King, agrees.

He told Recruiter: “There is no question that a recruiter owes a candidate a duty of confidentiality, both in law and under the regulations which govern recruiters, as well as obligations concerning the holding of candidate’s data, which is itself a highly regulated area. 

“A recruiter who ‘tips off’ someone about a candidate is manifestly in breach of its duties and obligations owed to that candidate, with the consequential liability for damages or losses suffered by candidate.

“Recruiters may find themselves in an invidious position when they have conflicting obligations, but ‘tipping off’ comes with huge risks, both financially in claims for damages as well as facing criminal proceedings.”

But David Whincup, partner at law firm Squires Patton Boggs, told Recruiter a successful claim for damages would rest on establishing both the breach of confidence and the resulting loss.

“I see from this case it took them 18 months to get rid of him and then there was a reduction in bonus. There’s always going to be the question of is that really all a product of the knowledge [that] he wasn’t happy at work? There’s a causation issue in there but if you can prove disclosure and prove loss and prove connection between the two, then I don’t see why you wouldn’t have a breach of contract claim against the recruiter.”

He also added that it would be “categorically bad press” for a recruiter that it had been acting indiscreetly.

Meanwhile Christopher Tutton, partner at law firm Constantine Law, warned the recruiter’s actions in this case could also be in breach of data protection legislation in the UK, and could expose a recruiter to a claim for damages if they revealed this information about a candidate. 

“With the heightened focus on data protection arising from the GDPR [General Data Protection Regulation], sharing such intel with employers to the detriment of candidates could lead to significant liabilities,” he added.

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