Limiting Liability in Staffing Agency Agreements: Defining Key Provisions and Avoiding Risks

Description

The staffing industry contributes substantially to the U.S. economy while providing career opportunities for millions of employees per year. Staffing agency contracts cover employees working in virtually all occupations, including engineering, technology, scientific, industrial, managerial, clerical, administrative, and the healthcare sector. Whether a staffing agency is providing full-time, part-time, or temporary staff for a business, creating precise documentation of the engagement is key.

Staffing agency agreements can present very complicated issues. These contracts should outline the agreed-upon terms associated with the staffing agency services being provided to a business. Staffing agencies often provide the resolution to a company's short-term or gap staffing needs. However, businesses should not assume they can avoid liability for workplace claims by utilizing a staffing agency; in fact, in some cases, a business is exposed to liability by virtue of ignoring key contract clauses.

Some of the key contractual issues for counsel advising businesses to consider include indemnification provisions for losses, any penalties, and attorney's fees in connection with the staffing agency's employees, including potential and costly wage-related claims. Confidentiality breaches, noncompetes, termination, and responsibility and coverage for all applicable insurance must also be part of counsel's due diligence when reviewing staffing agency agreements. The agreements should contain representations and warranties by the staffing agency assuring that the agency will completely perform its duties and responsibilities to its employees in compliance with federal and state laws.

Listen as our authoritative panel outlines guidance for counsel for addressing key contract issues in staffing agency agreements. The panel will also offer strategies and best practices for mitigating potential and costly workplace claims that may arise from poorly drafted staffing agency agreements.