Backlash Hits Job-Hunting Companies

Amy Graham figured a headhunter wouldn’t have a job for her.

Laid off as a controller at a small company, the Manhattan Beach resident knew she didn’t have the credentials that recruiters often look for in filling jobs for major employers.

So in late 1995, Graham turned to Cambridge Career Transition Group, an Irvine company whose newspaper ad boasted that it could “put the right open positions in front of you.”

Graham plunked down $3,500.

A year later, after sending out some 600 resumes, a frustrated Graham sued Cambridge in Small Claims Court, alleging the company didn’t follow through on its promises. She recently settled for $1,500.

“I feel I got sucked in,” said Graham, who is working two part-time jobs to make ends meet. “I was duped into thinking it was going to work for me.”

Her suit is one of several dozen actions against Cambridge or one-time partners Bob Levin and Charles F. Dimon III.

Levin and Dimon deny misleading anyone and maintain that they have found jobs for hundreds of clients in the last year.

However, complaints against so-called career counselors--those who charge thousands of dollars upfront, often with promises to obtain job interviews--have long been the bane of the staffing industry and are again getting the attention of prosecutors.

“We have a steady stream of such complaints,” said Orange County Assistant Dist. Atty. Robert C. Gannon Jr., head of the consumer and environmental fraud unit. “It’s one of the top 10 categories of businesses about which we get the most complaints.” He wouldn’t say whether his office is investigating any firms currently.

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The Better Business Bureau has logged a host of reports about employment firms. From schools that retrain laid-off workers to career counselors, “we’re getting quite a few complaints,” says Lona Luckett, director of trade practices.

But Dimon points out that Cambridge’s record with the bureau is “pretty clean” compared to a number of other employment firms. The bureau agreed, saying Cambridge has been “responsive” to complaints.

On Thursday, Levin appeared in Small Claims Court in Newport Beach to defend claims by customers that his firm misrepresented its services. He won one case because the customer was trying to collect money that his former employer already had paid for services. But Levin lost another when a judge found the company had misled an Arcadia woman. Levin said he’ll appeal that decision.

He wins most cases, he said. “If I think we’re wrong, we try to make it right or refund the money.”

As Levin left, a retired Air Force lieutenant colonel served him with another lawsuit, alleging breach of contract and fraud. James Owen of Newport Beach contends that Cambridge didn’t provide any meaningful job leads, among other things.

Levin asserts that the Cambridge program worked. Too often, he said, clients simply paid the fee--$3,500 to $5,500--and then failed to follow the company’s advice consistently.

Dimon says people who are out of work sometimes have unrealistic expectations of what companies such as Cambridge can do for them, a sentiment echoed by industry experts.

Dimon, who sold the company to Levin, opened a similar service, Icon Management Group, in the same Irvine complex early this year.

But the lawsuits and the aggravations were too much for Levin. He said he sold the assets of Cambridge early this month, and hopes to return to the manufacturing business. He said he has a job offer in Vancouver, B.C.

“I did this for three years, and it was too much for me from day one,” said Levin, who also was an executive in the clothing industry. “It’s been no fun for me.”

Another career counseling service, Corporate Dynamics in Anaheim, closed last year after being named in 30 lawsuits in Small Claims Court.

Customers asserted that the company and its president, Jerry Collette, failed to deliver interviews and broke other promises. Collette couldn’t be reached for comment.

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Unlike headhunters, who are paid only after filling job openings and then usually by employers, career counselors rely on their customers to pay stiff fees--as much as $8,000 upfront--before starting work on job searches.

Though the nation’s unemployment rate is at its lowest in 24 years, a growing percentage of those who have lost their jobs are white-collar workers and managers, mostly from small companies, economists say.

Those professionals don’t have the credentials sought by headhunters and often turn to firms such as Cambridge and Icon to find work, industry leaders say.

These firms run advertisements in major newspapers to entice customers. “We can put the right open positions in front of you,” one Cambridge ad proclaimed last year. Another ad even promised: “We guarantee placement.”

Such advertising rankles recruiters such as Michael Chitjian of Markar Associates in Costa Mesa.

“People in my business abhor those ads because they are so misleading,” said Chitjian, president of the California Assn. of Personnel Consultants. “The reputation that they generate is so negative that they carry over to the entire staffing industry.”

The National Assn. of Personnel Services, the major trade group for recruiters, disdains any association with companies that charge customers fees upfront. Some states, such as North Carolina and Tennessee, even ban such charges.

“I don’t know anybody who’s ever been satisfied with a career counselor,” said lawyer and author Jeffrey G. Allen, an employment agency expert.

Besides, he said, “You can’t market a human being in the same way you market a product.”

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Dimon, for one, acknowledges that the advance-fee segment of the staffing industry is fraught with deception and says he wants to clean it up.

But some Cambridge customers say it was Dimon who made many of the promises that were broken.

Graham wanted to find another job with a small company in the Los Angeles area, and she said she made that clear to Dimon when she first talked with him in December 1995.

She said Dimon told her he had “relationships” with the Walt Disney Co., the KPMG Peat Marwick accounting firm and other major firms. And, she said, he told her, “I don’t want you to take the first $90,000 job you’re offered.”

Dimon promised to provide a weekly list of 100 or more job openings tailored to her needs and complete with contacts and phone numbers. But, she said, she received mostly referrals to headhunters or leads to jobs out of state.

Jamieson C. Allen of Irvine, a systems management specialist, said he was promised interviews with companies who were looking for people with his skills but weren’t advertising. Yet he received no interviews through Cambridge, he said.

Such access was important to many clients, who have no network of their own.

Dimon said the job lists weren’t tailored to individual needs, covering broader areas instead.

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Dimon and Levin point out that clients often have unrealistic expectations.

Guaranteeing placement, for instance, simply means that the company will stick by the client for however long it takes the client to get a job--five weeks, five months or five years.

“People come to these firms thinking we’re going to get them a job in six weeks,” Dimon said. “That’s just not the reality.”

Dimon denied that he guaranteed anyone that he would get them interviews. “We tell people we have openings, and we do,” he said. “But we can’t guarantee them we’ll get them the interview. All I can do is say, ‘Here’s an opening.’ I can’t control [what they’re going to do.]”

Levin acknowledged that the company, in putting together a package of job openings every week, has relied on newspaper ads and listings on the Internet that are available to anyone. But he said the package also contains information solicited from companies, headhunters and other sources that aren’t available to the general public.

Levin said that Cambridge has helped more than 300 customers in each of the last two years. Few, he said, have complained or sought refunds.

The company also has acted as an outplacement service for companies that undergo major layoffs. FHP International Inc., for instance, hired Cambridge two years ago to help find jobs for local workers.

“They did a pretty good job for us,” said Jack Massimino, a former FHP division president who now runs FHP spinoff Talbert Medical Group in Costa Mesa. Massimino sent Cambridge a letter praising the firm as the best of several outplacement services FHP had used.

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Levin and Dimon parted ways last December. They say only that they no longer could work with each other. Levin said he and his wife had invested $400,000 in the company, and sold it for $250,000. Cambridge has made arrangements for remaining customers to receive services, Levin said.

Dimon said he has been in the industry since 1984, when he worked for Robert Jameson Associates, a national employment services company that he left before it closed its doors in 1987 under the weight of civil fraud lawsuits and investigations.

Other employment firms, including Overseas Unlimited Agency in Los Angeles, were closed down by state or federal authorities in the 1980s. The Federal Trade Commission accused Overseas of fraud in collecting more than $25 million from 70,000 clients but landing jobs for no more than 50 people.

Only weeks after that company was closed, California legislators decided, for economic and political reasons, to eliminate a tiny state bureau that oversaw personnel services firms and made the case against Overseas.

Now, state authorities say, there are no special laws regulating employment agencies and no single authority overseeing consumer complaints.

Filing suit in Small Claims Court is the only real alternative, Dimon says. He boasted that he has won more cases against him than he has lost.