SAP corporate liability

Too many companies have not considered the potential legal liability to shareholders or other company stakeholders for having “fake” consultants involved in their company IT projects. By not conducting due diligence in screening vendor resources or having inconsistent labor practices, companies face a much larger potential for liability than they may realize. Fraudulent consultants may cause both corporate and personal liability for Directors and Executives.

The company not only risks potential of torts for negligence or gross negligence, but also potential wrongful termination suits for any regular employee. The real shock is that more of this type of legal activity hasn't already taken place, but it is just a matter of time. While I do not expect you to take my word for it, I do request that you read this material and have your corporate counsel and HR departments review it as well, and then ask yourself what the consequences to you and your company might be.

For example, if an employee submits a or otherwise lies on their application to your company about their skills and you fire them, you may face personal and corporate liability. The employee may have a case if you do not use at least similar diligence, care, and consequences for vendors and their resources. You might as well just remove that clause on your employment applications and employment forms where you claim you can fire an employee for false information.

The most disturbing aspect of all of this is if you dare fire an employee for fraud, embezzlement, theft, or other such infractions but discover that a fraudulent consultant has come to work at your company, you may be subject to wrongful termination liability there as well. In other words, if you or your company does not deal with the cons that you hire through contract and similar means, then you may be implicitly waiving any legal ability to enforce those standards on your internal employees.

If a lawyer investigates an expensive ERP or IT implementation and discovers that one or more of the resources was a fake, you may be in serious trouble. Consider the following:

  • First, there is the potential for wrongful termination suits as already mentioned above.
  • Second, someone may face personal or individual liability if the lawyer can demonstrate that they did not perform due diligence in verifying the skills and experience of the vendor resources. This exists because if you do any kind of prior employment verification on regular employees but do not complete similar verification of the skills and qualifications for high-paid vendor resources, an argument could be made for negligence. If it is serious enough, it might be gross negligence.
  • Third, even if you win a lawsuit, employee morale will be damaged. The negative employee and public perception from the legal discovery process when they find out how much you paid that may destroy your career and any future you have at any company.
  • Fourth, there may also be U.S. Sarbanes-Oxley implications for any financial performance impacts caused by inexperienced consultants. Couple this with the potential personal liability for negligence or gross negligence that may obtain, and you have a serious mess.
  • Fifth, if you do not do the same thing for any consultant that a vendor brings to your company, you may be subject to corporate liability for terminating, suing, or pressing any charges for any employee who has pilfered or stolen anything from you.
  • Sixth, you may still have liability for not taking action against a vendor or placement firm if you find a pattern of their use of fraudulent consultants that is not isolated.
  • Seventh, back to U.S. Sarbanes-Oxley legislation, you may not be able to hide behind a vendor or consultant's liability insurance for supposed “protection” if it can be shown you did not have sufficient controls in place to prevent your company from being defrauded by these con artists and cheats. You may discover that certain exceptions to your own corporate insurance policies will not protect you in the case of this type of “negligence.”

You and your company are responsible for every one of these cases that comes across your desk, no matter how ridiculous the claims of the lawyer's client, your former employer, might be. See point three above to understand why you will settle every wrongful termination case, where anyone who is fired can possibly dig up any consultant on one of those expensive IT projects with a falsified resume.

During discovery, any lawyer can get copies of the consultant resumes and the experience presented by the vendor or consultant for the project. From there they can easily make HR calls to the companies that the consultant lists on their resume to verify all of the experience the consultant listed from every company they supposedly worked at. Most HR departments will track down information even on contractors if you approach them. And let me assure you, with the massive amount of fraud done on a regular basis, they will find at least one or two resumes from fake consultants. If you weren't careful during the hiring of a few years ago, you may be in deadly serious trouble in your own IT or Engineering departments. You may quickly discover that your technical departments have several fakes, frauds, and cons.

If this happens, you may be in serious trouble. If it goes to litigation and there is more legal discovery over what your company paid for that fraudulent consultant, your career as , , , or other IT professional could be over.

The worst-case scenario is if it is discovered that you fired an employee for theft, embezzlement, or fraud and then took any kind of civil action or made a criminal complaint against them.

When it comes out how much fraudulent consultants and their fake resumes cost per month, you may not only face issues with your projects. If you call an employee off the project, or take civil action against them, or file a criminal complaint against for fraud or embezzlement against them, you may face serious consequences. Shareholders will be hunting for you, and both HR and the legal department will have your number on speed dial.

This is all in addition to the project issues that these frauds and fake resumes have created in the marketplace. Wonder why your IT projects go over time and over budget? I'd almost be willing to wager that many of those projects were staffed with several fake consultants who had fake experience and fake resumes. Wonder why you're paying so much for that ERP project and not seeing the desired results? Wonder no more.

Further Reading:

How to screen for consultants
Avoid fake SAP resumes, fake SAP experience, and get the experience you pay for.

Screening methods to find the right SAP consultant

Screening Methods to Find the Right Consultant – Part 2