Q: A friend of mine was placed at our firm through an employment agency. She is now looking for a new job and contacted the same agency to see if they can help her. This agency let our office manager know that she is looking for a new job. I find this to be completely inappropriate and somehow illegal. Is there anything that can be done?
A: The intricacies of working with an employment agency can be complicated. First, let's look at how an employment agency is paid. Pay or income can often drive behavior! An employment agency usually works for the company or the employer. Often times, the agency has a written agreement with an employer that details the working relationship. Usually, the employment agency is NOT working for the candidate, or your friend. Your employer most likely paid a fee to hire your friend.
Now, let's discuss your specific questions. Your friend was placed at your company by an employment agency. Your employer likely paid a significant fee to the agency after your employer hired her. The employment agency probably has a written agreement with your employer. Sometimes that written agreement specifies a period of time where their placements are guaranteed. That means if the employee leaves within a certain time period (30, 60, 90 or 180 days), the agency may need to either replace the new hire (sometimes for free) or refund the fee (a full or partial refund).
The agency wants to retain the business of your employer, first and foremost. They are hoping to place other employees there and make more money. Their allegiance is likely to the employer, not your friend.
A detail that you didn't mention but would have been helpful to know: did the agency tell your friend that they would need to inform your employer before agreeing to work with your friend again? Ethically, this is probably the best approach. Then your friend can decide whether she wants to work with that agency again (and also understand that her current employer would know about her search for a new job) or choose to pursue other avenues to find a new job.
From what you have shared, what the agency has done is probably not illegal but unethical, maybe. If the agency advised your friend that they would have to inform your employer of her job search and she had taken steps to re-engage the agency to help her with her search, then, I am less likely to view them as unethical. After all, your employer is their client. However, if the agency called your employer without first discussing this with your friend, then I would be more concerned about the ethics of this agency.
One other factor is the length of service of your friend. If your friend has been employed with your company for several years, then the agency could probably work with your friend without compromising their current relationship with your employer. Agencies can not guarantee that a candidate will remain employed with a client indefinitely.