Employment Law Business Law

As the HR Manager for the software development company MicroSonic Inc., I was required to retain the services of a headhunter in order to quickly fill the position of a project manager for a federal government contract to develop within one year software for the military. Unfortunately, halfway through the project the position became available because the previous project manager had died of a heart attack.

The headhunter produced information on what appeared to be an ideal candidate named Bill Yates who is currently employed by a leading U.S. software development company with offices in Canada. Bill Yates is a U.S. citizen but is currently working out of country in a Vancouver office. There are 4 legal risks that I will bear in mind when deciding to pursue Yates. These pertain to immigration as related to:

Residency

Taxes

Citizenship

Security and criminal clearance

It is not enough for the recruiter to simply fill the position in this case. MicroSonic Inc. will need to prove the individual meets the requirements of the federal contract as well in addition to the needs of the company. MicroSonic Inc. should focus on not just if they should hire Yates, they should search for reasons not to hire him. For example, in regard to residency, as an American citizen and permanent resident he can be employed in any capacity. But, if for some reason he established permanent residency abroad he may have future travel or Visa concerns.

Another issue is often tax related. Yates, whether knowingly or accidentally, may have given up his existing U.S....

Income, Gift, or Estate taxes which then would ban him from returning to the U.S. In an employee capacity. In regard to citizenship therefore, MicroSonic Inc. would be required to confirm that he is eligible to work in the United States. It is required that employers verify an employee's eligibility since 1986. Finally, the fourth risk factor is an international security and criminal background check. Although Yates is an American citizen working for an American company, that is not a guarantee that he could pass an international security and criminal background check required of potential employees to work on governmental contracts.
If we decided to offer a job to Bill Yates, there would be some restrictive covenants or clauses that we would add to the agreement. In order to avoid the typical litigation process, we would require a detailed employment contract with Yates. This contract would specifically address the basics of an employment contract such as termination of employment, including termination compensation, non-competition, non-solicitation, and a detailed project gag order.

Due to the fact that the project is only expected to be an additional 6-month project, specifying the term of the contract would also avoid Yates from thinking he would be an employee for an indefinite term. Clarifying all of these points is crucial, but even more important is that the contract clearly states that the original 4 risks mentioned above are detailed in the contract so that if information is received in an untimely manner due to international delays, the company can still terminate if need be. The contract would clarify…