It was CBS television's "60 Minutes" that first broke the story of National Executive Search, a Washington job-finding service that the network said collected fees from clients up front but rarely found them jobs.
NES filed for bankruptcy shortly after the CBS broadcast in October, but a firm called John William Costello Associates continued to operate a similar business from the same office with some of the same people, Washington Post reporter John F. Berry disclosed last January.
Now yet another expose'--this one by The Washington Times--tells the same, sad tale with one new twist. Outsearch Inc. is now occupying the NES suite at 1612 K Street NW. along with Costello Associates, but the game is the same:
"You pay us 10 percent of the salary you hope to earn and we'll help you find a job," the company says, making no promise to actually deliver a job.$24 million class action lawsuit filed by former clients is pending in U.S. District Court. The disgruntled job seekers claim they were victims of fraud and accuse officers of NES and John William Costello Associates of violating federal antiracketeering laws.
The defendants have denied the charges and are asking to have the case dismissed. Telephone calls to the defendants for comment about the suits were not returned.
It's not surprising in today's brutal job market that a company that promises little or nothing can get people to buy its job-hunting services. Nor should it be shocking that even after three media investigations some people haven't gotten the message.
What is stunning is that the District of Columbia government has done nothing to close the loophole in the D.C. law that permits employment agency practices banned by many other states.
Companies calling themselves "employment agencies" are regulated by D.C. laws, but those doing business as "career counselors" aren't.
Collecting fees in advance from job seekers is illegal in 44 states, but is allowed in the District under a law passed in 1962.
One of the witnesses who testified in favor of that law 20 years ago was none other than John William Costello. "I'm for legislation that protects the rights of people, but I do not believe that regulation regarding placement fees is necessary," he argued successfully in the days before the District elected its own government.
District voters do elect the city council today, but the elected representatives seem to be in no hurry to protect their constituents from questionable employment agency practices.
A proposal to outlaw advance fees and require all agencies to be regulated has been kicking around the District Building for more than a year but after three exposes' still has not found its way to the city council.
The lack of urgency in dealing with employment agency abuses is outrageous in a city where one of every 10 residents is unemployed.
How many of the District's 32,500 jobless know that Washington employment agencies can charge them up-front fees that they wouldn't have to pay if they used a service in another state?
How many riffed federal workers understand that if they go to a "career counselor" they may give up the basic regulatory protections they would get from patronizing an "employment agency?"
Frustrated state regulators in New York and North Carolina say they have been complaining for years that the District is a haven for unregulated job placement services. Officials in both states say the District government has not been much help in cracking down on D.C. employment services.
D.C. consumer affairs officials have recommended tightening the employment agency laws. But secure in their own jobs, the District bureaucrats have shown little initiative in protecting the jobless.
Perhaps the best solution would be for the D.C. consumer officials and city council members to spend some of their own money to hire John William Costello to find themselves a new job.