*DEFENDANTS’ ANSWER AND COUNTERCLAIM
State of Minnesota, District Court, County of Hennepin, Fourth Judicial District
Case # 27-CV-14-15139
Case Type: Contract
Staffing Specifix, Inc. , Plaintiff
TempWorks Management Services, Inc. d/b/a TMS Staffing, TempWorks Software, Inc., ARA, Inc. d/b/a Paperless Staffing, David Dourgarian, Gregg Dourgarian, John Reid, Mari Kautzman, and Doug Greene, Defendants.
One of the most troubling things heard when talking to the many victims of TempWorks is the recurrence of the following charges:
(TempWorks) took over my business with TMS Staffing!
(TempWorks) tried to take over my business with TMS Staffing!
TMS Staffing? I was a former client and I had never heard of TMS Staffing. Nothing in the literature that Tempworks provides or promotes mentions TMS Staffing. TMS Staffing is nowhere to be found on the TempWorks website, Facebook page, or any other media that they utilize and maintain.
A search of the Minnesota business filings for TMS Staffing yields the following:
TMS Staffing is an assumed name of TempWorks Management Services, Inc. Why is this important?
TempWorks, by virtue of the services they provide to staffing companies, has detailed records of the staffing company's proprietary data:
Employee Names, etc.
Having this information gives them a distinct competitive advantage to go into any market and compete against their former clients.
A staffing agency under contract for funding and employer of record (EOR) services with TempWorks is describes in the agreement as "a limited agent acting on behalf of TempWorks". Because clients and employees are entered into Enterprise (TempWorks software) and TempWorks is the employer of record, they can make the argument that the clients are TempWorks clients and the employees are TempWorks employees. The staffing company is merely acting as an agent of TempWorks.
TempWorks recently was forced to defend this practice as it was part of the complaint filed against them. The following was provided to the court by TempWorks attorneys:
3. TempWorks operates under two different business models. The first business model is that of a traditional temporary staffing business where it contracts with businesses to provide workers to job sites at an hourly rate. As a temporary staffing business, TempWorks hires, pays, and employs the temporary staff and bills the end customer for the time worked by the temporary staff.*
4. In TempWorks’ second business model, TempWorks contracts with existing staffing businesses to handle sales and customer service at the client site, and takes care of the back office portion of the work; employing and paying temporary workers, invoicing the end customer, and receiving payment. Under this business model, the existing staffing business becomes a limited customer service agent of TempWorks.*
5. In the second business model, the customer service agent is paid a commission.*
So what does TempWorks do when the relationship goes bad, as so many have, or when their client simply informs them that they have decided to partner with another vendor?
39. ....... TempWorks decided to terminate the Agreement and instead self-perform the customer service and sales work that Plaintiff had provided under the Agreement.*
The import of this is self-explanatory. TempWorks decided simply to open a branch of TMS Staffing where their client (Plaintiff) was located, and try to continue doing business with (Plaintiff's) clients, cutting (Plaintiff) completely out of the picture.
This has happened repeatedly. None of the TempWorks victims that I have spoken to were aware of TMS Staffing.