Two Virginia men have filed a class-action suit against the executives of a bankrupt Washington employment-search firm, charging that the company made little or no effort to find jobs for them and at least 2,000 other clients after each had paid the firm thousands of dollars to look for work on their behalf.
The suit, filed in U.S. District Court in the District of Columbia, charges founder and Chairman John William Costello Sr. and other officials of National Executive Search Inc. (NES) with fraud and asks treble damages that could amount to more than $24 million.
Officials of NES could not be reached for comment late yesterday. The company filed for protection under bankruptcy laws last November. A successor company, John William Costello Associates, Inc. (JWCA)--with substantially the same group of executives--and other related companies are still in business. JWCA is also named as a defendant in the suit.
In the suit, James E. Slattery III, of Arlington, and Howard Whipple, of Alexandria, say that they responded to NES newspaper advertisements and paid $3,000 each to the firm to search for jobs for them in 1981.
Slattery alleges that the company sent him a draft of a resume and cover letter "which were inadequate" and had to be rewritten. He said NES never called him and did not arrange any job interviews. He said he continued to seek a refund from the company until it filed for bankruptcy protection.
Whipple says in the suit that NES said it had mailed his resume and a cover letter to about 70 companies, but that he got no response until he demanded a refund. Whipple charges that after he demanded his money back, NES set up an interview with one company.
"In the interview it became clear that the company had no position for a person of plaintiff Whipple's qualifications," the suit charges. " NES arranged the interview for no purpose except to support its defense to a claim for refund." Whipple says he then demanded arbitration of his claim against NES and won $1,500; but NES filed for bankruptcy before Whipple was paid, according to the suit.
The suit charges that NES, through newspaper advertisements, brochures and other media, misrepresented its success rate in finding jobs for its clients, as well as misrepresenting the services it provided for its clients.
The suit claims that between 2,000 and 3,000 persons were defrauded by NES of between $2,000 and $8,000 each. It says that 90 of these people have already contacted attorneys for Slattery and Whipple to express their willingness to participate in the action.