There’s something in the water currently. No, not fish. Or faeces. I mean something that is bringing out some very aggressive, spiteful, and vindictive behaviours. You may remember that a couple of months ago I wrote this blog about a particularly nasty, inconsequential Christchurch firm who were bullying a former consultant with an extremely onerous restraint of trade. Well, as we kick into 2025 we’ve seen another three instances of the same heavy-handed modus operandi, and as we know, the year only really started after Waitangi Day. In fact, we are currently seeing restraints of trade causing an issue in almost every placement we’re making or working on currently. Unlike other rec to recs, we’ve been doing this for a very long time. And we’ve never seen anything like this. It must be the water.
Or maybe it’s something else.
Restraints of trade are no new thing. I’m sure when Robert Walters (the man, not the firm) hired his first recruiter, he pencilled one in on the back of his packet of John Player Specials. I doubt there’s a recruiter out there who doesn’t have one in their contract. And from what I’ve seen, the clauses are no better or worse today than they were twenty years ago. What has changed of late is the level of determination from the firms enforcing them. And why do we think this? Let me share a theory.
When the market is booming like when Jacinda let us out to get our bits waxed again, restraints of trade weren’t a big issue in the people moving game. When times are good, losing a big biller hurts, but you have lots of big billers. These other big billers quickly snaffle up the clients of the exiting party and everyone cracks on. And anyway, work is being phoned in on the daily and you’re too busy picking up the phone to brief your lawyers. It is very much an “easy come, easy go” mentality. Similarly, when times are crap, we seem to have very few issues with restraints of trade. Firstly, we’re not making as many placements, so the sample size is smaller, but more importantly, a resignation can come as a relief. Good billers often get big pay rises when times are good. When the market poops its pants, you end up with a firm full of $110k Consultants billing $200k. And contrary to what some of you recruiters seem to think, billing $200k and getting paid $110k does not make you profitable. It makes you a f*cking nightmare. When an owner or manager is nervously looking at the bank balance as payroll approaches, a quick resignation, $300 lunch, and a “thank you very much no need to work your notice goodbye” can be a blessing.
However, neither of the above describe this current market. Where we find ourselves today is slap-bang in the middle. Times have been bad, but I think even the most pessimistic recruiter would agree that we are on the cusp of things getting better. And this is why knobhead recruitment agency bosses are aggressively trying to scare former employees with letters from lawyers. If you think about the last 18 months, a lot of good recruiters have needed a degree of carrying. For me, this is reward for the years when they have carried others – including the big salaries of non-billing leaders. Some bosses however see this as a debt which the recruiter now needs to pay off. And pay it off they will- when the market turns. However, what happens when that recruiter who hasn’t made you much money in 2024 decides to leave just as they are about to start billing again in 2025? Well you throw your toys out the pram, scream “NOT FAIR” and run off to suck some nutritious and soothing milk from your lawyers expensive tits. And that is the world we’re currently living in.
Going forward, I think bosses need to have a hard think about what a restraint of trade can do to an individual. Yes, we have a right to fairly protect our business, and a good restraint of trade based around non-solicitation, and for a period of three months would achieve this. And if someone breaks this restraint, get your lawyers to go for gold. However, when a restraint of trade stops a former employee from doing any recruitment work, paying their mortgage, or feeding their kids for 6 months and beyond, then you sir, are a real piece of work.
Anyway, I’ll be sure to let you know if anyone (including myself) ends up in court anytime soon.
^SW
