Staffing Industry Analysts (SIA), the Global Advisor on Staffing and Workforce Solutions, reports on case in which the manager at a client asked for a bribe in exchange for raising the markup for the payrolling firm. The payrolling firm refused and even though it was the incumbent, lost the contract without any meaningful discussion. SIA reports:
A payroll firm and contingent workforce manager are at odds after the payroll firm filed a lawsuit claiming the manager asked for a bribe.
Pride One, a workforce solutions provider, sued contingent workforce manager Daniel Khublall in federal court in New York claiming he asked for a $250,000 a year job at the firm in exchange for raising markups at the company for which he worked, Thomson Reuters Corp. In 2012, Reuters selected Pride One to be its payroll services provider.
Khublall’s attorney filed a letter Jan. 31st denying the allegations and wrote he planned to file a motion to dismiss.
The dispute began in May 2016 when Pride One CEO Leo Russell said Khublall proposed that Pride One give him a position running its international business at an annual salary of at least $250,000, according to the first amended complaint in the lawsuit. In exchange, the proposal allegedly called for getting Pride One a rate of approximately 20% over the total cost of each temp worker. The rate was substantially higher than the rate currently being paid.
Russell refused, according to the complaint. Pride Global eventually received a request for proposal from Reuters in June 2017. It responded only to be rejected without meaningful discussion, the complaint said. Pride Global then found out its services at Reuters were terminated on Sept. 7, 2017.
“When defendant attempted to solicit a bribe from Pride One and Pride One refused, defendant retaliated for the sole purpose of harming Pride One, and/or in breach of the fiduciary duty he owed to his employer, causing Thomson to terminate the Thomson-Pride One relationship,” according to the complaint.
Pride One claimed in the complaint that it lost tens of millions of dollars in revenue. Pride One had approximately 500 temporary workers on its payroll at any given time at Reuters and worked through an MSP.
In his response, Khublall’s attorney wrote the facts in the complaints are implausible. The complaint doesn’t explain how the MSP in this situation would miss a 20% markup, especially if Khublall left Reuters, according to the letter. In another point, the letter said the complaint does not allege Reuters’ decision to end its relationship with Pride Global was not in Reuters’ best interest.
At this time, the case is ongoing.