Talx

TALX (pronounced "talks") is now Equifax Workforce Solutions, a wholly owned subsidiary of Equifax.

History

Based out St. Louis, TALX was founded in 1973 as Interface Technology Inc. by several individuals including H. Richard "Rick" Grodsky, Professor of Electrical Engineering at Washington University. Interface Technology provided interactive voice response systems. Bill Canfield joined the company in 1986 as President and CEO in 1986 and added the title of Chairman in 1988. TALX went public listing on the NASDAQ in an IPO in 1996 and offered 2,000,000 shares at $9 per share for a total offer amount of $18,000,000. TALX Corp. At the time of the IPO, TALX designed and implemented interactive communication solutions using computer telephony to integrate technologies such as interactive voice response, facsimile, e-mail, Internet and corporate Intranet. TALX's interactive communication solutions enabled an organization's employees, customers, vendors and business partners to access, input and update information stored in data bases without human assistance. TALX also provided a branded employment and income verification service, The Work Number for Everyone, that a provided automated access to employment and salary records of large employers for purposes of loan and other credit approvals.

The events of September 11, 2001 caused TALX to shift its focus toward configurable data solutions and a recurring revenue model and away from custom on-premises software solutions. The employment and income verification service, The Work Number, as it was later became known, became the revenue and profit growth engine for the company. All future acquisitions and organic innovations were done to strengthen the employment and income verification business unit. March 2002 TALX Corporation acquired the two largest human resource outsourcing companies that specialized in unemployment cost management and related human resource applications, The Frick Company, the second largest provider headquartered in St. Louis, Missouri, and the largest provider of unemployment cost management business, Gates McDonald, a subsidiary of Nationwide Mutual Insurance Company, headquartered in Columbus, Ohio.^[1] TALX sold its e-Choice Benefits Enrollment Services business to Workscape in April 2003 to further focus on its core business of payroll-centric services with more standardized delivery platforms.^[2]

During the period of 2002 and 2005, TALX increased its dominance in unemployment cost management services through acquisitions of Johnson & Associates LLC, TBT Enterprises Inc., UI Advantage Inc., Jon-Jay Associates Inc., Employers Unity Inc. and parts of Sheakley-Uniservice Inc. These acquisitions and the organic growth of The Work Number made TALX the dominate leader in employment and income verification and unemployment cost management services in the United States. TALX also added or created a number of other payroll-centric Human Resource related employer services including W-2 Management, I-9 Management, Tax Credit and Incentive Management, and Online Paperless Pay. TALX also successfully partnered with ADP, Ceridian, Aon-Hewitt and other payroll and benefit providers to package customized suites of services under several alliance banners.

In 2007, TALX was acquired by Equifax, one of the big three credit reporting agencies, in a transaction valued at $1.4 billion.^[3] As of 2010, integration was completed and TALX now officially operates as a division of Equifax.

In October 2012, Equifax changed the name of the TALX business unit to Equifax Workforce Solutions to reflect the organization's commitment to leveraging its extensive workforce data with the analytics resources of Equifax.^[4]

SEC Investigation of TALX

TALX disclosed in its July 2002 10-K filing that the Securities and Exchange Commission was conducting an investigation into its August 2001 secondary offering of common stock and second fiscal quarter 2001 financial results. TALX stated that they were cooperating fully with the investigation, and had voluntarily produced documents requested by the Commission and have made their employees available for interviews or testimony upon request. TALX stated that they believed that there is no basis for any action by the Commission.^[5]

TALX reported in August 2004 that it has reached an agreement in principle with the staff of the Securities and Exchange Commission to settle its ongoing investigation of the company's accounting of certain items, which was the subject of the company's restatements of its 2001 and 2002 financial statements. Under the agreement in principle, the company would pay a fine of $2.5 million. Separately, William W. Canfield, the company's president and chief executive officer, reached an agreement in principle with the SEC staff to settle its ongoing investigation against him in a related matter.^[6]

March 2005 TALX announced that the Securities and Exchange Commission (SEC) has accepted the previously announced offer of settlement submitted by TALX to resolve the SEC's investigation into its accounting for certain items. All financial statements in question have been previously restated to address the issues raised by the SEC. TALX agreed, without admitting or denying any liability, not to violate certain provisions of the Federal securities laws in the future. TALX also agreed to pay one dollar in disgorgement and $2.5 million in civil penalties. These amounts were paid into escrow by TALX in December 2004 and had been previously reflected in the company's financial statements. The SEC also accepted the offer of settlement submitted by William W. Canfield, TALX's president and chief executive officer, to resolve charges stemming from the same accounting issues. Canfield agreed, without admitting or denying any liability, not to violate certain provisions of the Federal securities laws in the future. He also agreed to pay $859,999 in disgorgement and $100,000 in civil penalties.^[7]

The SEC filed fraud charges March 2005 against TALX Corp.'s former chief financial officer. The SEC alleged that Craig N. Cohen, who resigned in January 2004, violated antifraud and other federal securities laws by causing TALX to meet its 2001 financial target through fraudulent accounting practices. As a result, TALX overstated its 2001 income by about $2.1 million, or 65 percent, which inflated its stock price. Cohen then sold TALX shares. He is also accused of making misleading statements to auditors. The SEC sought a permanent injunction against Cohen, an officer and director bar and civil penalties. Cohen had served as chief financial officer from January 1994 to May 2003, and was vice president of application services and software from May 1999 to May 2003. He resigned at the same time TALX said it would restate its earnings for the fiscal years 1999 to 2003 to correct errors in the way it accounted for revenue. April 2007 the US District Court dismissed six of the seven counts against Cohen. The Court found Cohen guilty of the allegation of insufficient internal controls. The Court stated that there was evidence that Cohen knew he was falsely recording two projects as bill-and-hold transactions. The Court imposed a civil penalty against Cohen in the amount of $5,000.

FTC Investigation of TALX

June 2006 TALX announced that it was voluntarily responding to an initial inquiry by the Federal Trade Commission to assess whether TALX acquisitions in the unemployment compensation and Work Number businesses had significantly reduced competition. TALX believed it has complied with applicable regulatory filing requirements and intends to cooperate with the inquiry.^[8]

The Federal Trade Commission announced April 2008 that it issued a complaint challenging a series of acquisitions by TALX Corporation that substantially lessened competition in the markets for outsourced unemployment compensation management (UCM) and verification of income and employment (VOIE) services. The Commission and TALX have reached an agreement settling the Commission's challenge. “TALX acted illegally,” says Jeffrey Schmidt, Director of the FTC’s Bureau of Competition, “by acquiring virtually all of its competition in a series of transactions. While each transaction individually may not have been problematic, the FTC looked at the cumulative effect of the acquisitions. This case sends a message that firms can’t get away with unlawful acquisitions just because they take place in relatively small increments.” The complaint alleges that TALX's acquisitions have enhanced its ability to increase prices unilaterally and to decrease the quality of services in the relevant markets. In addition, the complaint notes, TALX has alliance partners, including Automated Data Processing, Inc. (ADP), Convergys, Inc., and Ceridian, Inc., which have agreements with TALX to outsource to TALX some or all of the UCM services they provide for their clients.

According to the Commission, the relevant markets for outsourced VOIE and UCM services are highly concentrated, and TALX's acquisitions substantially increased concentration. The Commission alleges that entry into the relevant markets would not be timely, likely, or sufficient in magnitude, character, and scope to counteract the anticompetitive effects of the acquisitions. The complaint also alleges that entry and expansion in the outsourced UCM market for large, multi-state employers is made more difficult by the large number of customers tied to long-term contracts. Entry and expansion is also made more difficult by non-compete and non-solicitation agreements between TALX and its employees, which reduce the number of experienced persons available for hiring by potential competitors.

The proposed settlement, which is subject to final approval by the Commission following a 30-day public comment period, would foster market entry and expansion by current and future competitors. The settlement would allow long-term TALX customers to terminate their contracts and eliminate non-compete clauses for former and current TALX employees.^[9]

Criticisms of TALX

In April 2010, The New York Times published an article about TALX. In short, TALX was accused of contesting unemployment benefits claims regardless of their merit in an effort to reduce the funds their clients — the employers — would have to pay to state unemployment insurance pools. The article pointed out that some unemployed persons were denied benefits as a result of TALX's actions.^[10]

External links

• Official website

References