<PAGE>
 
                                                                    Exhibit 10.9

                             EMPLOYMENT AGREEMENT
                             --------------------

         THIS AGREEMENT, made this 27th day of August, 1998, by and between RMH
Teleservices, Inc., a Pennsylvania corporation (hereinafter called "Company"),
and Michael Scharff, an individual residing at 409 Militia Drive, Lansdale,
Pennsylvania, 19446 (hereinafter called "Employee").

                             W I T N E S S E T H:
                             - - - - - - - - - -

         Company wishes to continue to employ Employee and Employee wishes to
continue to be in the employ of Company on the terms and conditions contained in
this Agreement.

         WHEREAS, due to Company's desire to continue to employ Employee as
Executive Vice President and to gain the protections and benefits contained in
this Employment Agreement, Company and Employee agree to the covenants and
restrictions contained herein;

         WHEREAS, due to Employee's desire to continue employment with the
Company as Executive Vice President and obtain the protections and benefits
contained in this Employment Agreement, Employee agrees to the covenants and
restrictions contained herein;

         NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Employee agree as follows:

        1.    Definitions. As used herein, the following terms shall have the
              -----------
meanings set forth below unless the contexts otherwise require.

              "Affiliate" shall mean a person who (i) with respect to any
               ---------
entity, directly or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such entity; or (ii) with
respect to Employee, is a parent, spouse or issue of Employee, including persons
in an adopted or step relationship.

              "Annual Bonus" shall mean the bonus payments set forth in 
               ------------
Section 5(b), as such amount may be adjusted from time to time.

              "Base Compensation" shall mean the annual rate of compensation set
               -----------------
forth in Section 5(a), as such amount may be adjusted from time to time.

              "Board" shall mean the Board of Directors of Company.
               -----
<PAGE>
 
              "Business" shall mean the business conducted by Company or any
               --------
Subsidiary or corporate parent thereof or entity sharing a common corporate
parent with the Company on the date of execution of this Agreement, including
business activities in developmental stages, business activities which may be
developed by the Company, or by any Subsidiary or corporate parent thereof or
entity sharing a common corporate parent with the Company, during the period of
Employee's employment by Company, and all other business activities which flow
from a reasonable expansion of any of the foregoing during Employee's employment
with the Company and about which Employee had or has constructive or actual
knowledge.

              "Cause" shall include but not be limited to any one or more of the
               -----
following:

                    (a)   Employee breaches or neglects the material duties that
Employee is required to perform under the terms of this Agreement, including if
Employee performs his duties in an incompetent manner.

                    (b)   Employee is convicted of a felony or a crime of moral
turpitude or has entered a plea of nolo contendere (or similar plea) to a charge
of such an offense;

                    (c)   Employee uses alcohol or any unlawful controlled
substance while performing his duties under this Agreement and/or if such use
materially interferes with the performance of Employee' duties under this
Agreement;

                    (d)   Employee commits any act of criminal fraud, material
dishonesty or misappropriation relating to or involving the Company;

                    (e)   Employee materially violates a rule(s), regulation(s),
policy(ies) or plan(s) governing employee performance or express direction(s) of
the Board; or

                    (f)   Employee engages in the unauthorized disclosure of
Confidential Information;

                    (g)   Employee acts in a manner that is materially contrary
to the best interest of the Company.

              "Change of Control" shall be deemed to have occurred upon the
               -----------------
earliest to occur of the following events:

                          (a)   any "person" as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 ("the Exchange Act")
(other than the 

                                      -2-
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Company, any subsidiary of the Company, any "person" (as defined herein) acting
on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any "person" who, on the date the RMH Teleservices, Inc. 1996 Stock
Incentive Plan (the "Plan") is effective, shall have been the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act) of or have voting control over
shares of capital stock of the Company possessing more than thirty percent (30%)
of the combined voting power of the Company's then outstanding securities) is or
becomes the "beneficial owner" (as hereinabove defined), directly or indirectly,
of securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities;

                          (b)   during any period of not more than two
consecutive years (not including any period prior to the date the Plan is
effective), individuals who at the beginning of such period constitute the Board
of Directors, and any new director (other than a director designated by a
"person" who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this definition) whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority thereof;

                          (c)   the shareholders of the Company approve a merger
or consolidation of the Company with any other corporation or other legal
entity, other than (1) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or
(2) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (other than a "person" 
who, on the date the Plan is effective, shall have been the "beneficial owner"
of or have voting control over shares of capital stock of the Company possessing
more than thirty percent (30%) of the combined voting power of the Company's
then outstanding securities) acquires more than thirty percent (30%) of the
combined voting power of the Company's then outstanding securities;

                          (d)   the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets
(or any transaction having a similar effect); or

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                          (e)   a "change of control" as hereinafter defined by
the Board of Directors for the express purposes of this Plan has occurred.

              "Commencement Date" shall have the meaning specified in Section 4
               -----------------
hereof.

              "Confidential Information" shall have the meaning specified in
               ------------------------
Section 12(c) hereof.

              "Disability" shall mean Employee's inability, for a period of
               ----------
thirteen (13) consecutive weeks, or a cumulative period of 120 business days
(i.e., Mondays through Fridays, exclusive of days on which Company is generally
closed for a holiday) out of a consecutive period of twelve (12) months, to
perform the essential duties of Employee's position, due to a disability as that
term is defined in the American With Disabilities Act.

              "Principal Stockholders" shall mean Raymond J. Hansell, MarySue
               ----------------------
Lucci Hansell and Advanta Partners LP.

              "Restricted Area" shall have the meaning specified in 
               ---------------
Section 12(a) hereof.

              "Restricted Period A" shall have the meaning specified in 
               -------------------
Section 12(a) hereof.

              "Restricted Period B" shall have the meaning specified in 
               -------------------
Section 12(b) hereof.

              "Subsidiary" shall mean any company in which Company owns directly
               ----------
or indirectly 50% or more of the Voting Stock or 50% or more of the equity; or
any other venture in which it owns either 50% or more of the voting rights or
50% or more of the equity.

              "Term of Employment" shall mean the period specified in Section 4
               ------------------
hereof as the same may be terminated in accordance with this Agreement.

              "Voting Stock" shall mean capital stock of any class or classes
               ------------
having general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a company.

         2.   Employment. Company hereby employs Employee as Executive Vice
              ----------
President and Employee hereby accepts employment by Company for the period and
upon the terms and conditions specified in this Agreement.

                                      -4-
<PAGE>
 
         3.   Office and Duties.
              -----------------

              (a)   As Executive Vice President, Employee shall render such
services as are necessary and desirable to protect and advance the best
interests of Company, acting, in all instances, under the supervision of and in
accordance with the policies set by the Board. As Executive Vice President,
Employee shall be responsible for managing the day-to-day operations of the
business and shall have the responsibility and authority, subject to policies
set by and with the approval of the Board, to employ and terminate employees,
sign agreements and otherwise to implement the policies and directives of the
Board, all subject to the provisions of any operating budget or budgets as may
be approved from time to time by the Board and subject to the By-Laws of the
Company. Employee shall perform any other duties reasonably required by the
Board and reasonably related to his responsibilities as Executive Vice
President.

              (b)   For as long as Employee shall remain an employee of Company,
Employee's entire working time, energy, skill and best efforts shall be devoted
to the performance of Employee's duties hereunder in a manner which will
faithfully and diligently further the business and interests of Company.
Employee may engage in charitable, civic, fraternal, trade and professional
association activities that do not interfere with Employee's obligations to
Company, but Employee shall not work for any other for-profit business without
so disclosing such activity to the Board, in which event the Board may not
unreasonably withhold its consent to such activity.

         4.   Term. Employee shall be employed by Company for an initial Term of
              ----
Employment (the "Initial Term"), commencing August 27, 1998 (the "Commencement
Date"), and ending on August 31, 2002, unless sooner terminated as hereinafter
provided.

         5.   Compensation and Benefits.
              -------------------------

              (a)   For all of the service rendered by Employee to Company,
Employee shall receive Base Compensation at the gross annual rate of One Hundred
and Fifty Thousand Dollars ($150,000) payable in installments in accordance with
Company's regular payroll practices in effect from time to time. The Base
Compensation shall be reviewed annually, on or around the anniversary date of
the Commencement Date of this Agreement to ascertain, in the sole discretion of
the President and the Chairman of the Board, whether and to what extent, if any,
the amount the Employee's Base Compensation should be increased. In no event
shall the increase be less than the greater of five (5) percent of Employee's
Base Compensation or the minimum of the percentage increase of the Wage Increase
for the metropolitan statistical area of Philadelphia.

              (b)   In addition to the foregoing compensation, Employee may be
eligible to receive an annual bonus (the "Annual Bonus") in an amount, if any,
as shall be determined by the Board of Directors in its sole discretion. The
Annual Bonus, to the extent 

                                      -5-
<PAGE>
 
earned, shall be payable in a single lump-sum payment within ninety (90) days
after the end of each calendar year. No Annual Bonus is guaranteed. To be
eligible for an Annual Bonus, Employee must be actively employed by the Company
on the last day of the calendar year for which the Annual Bonus is at issue.

              (c)   Employee may be eligible for certain stock options pursuant
to the terms, conditions and restrictions of the RMH Teleservices, Inc. 1996
Stock Incentive Plan and pursuant to the grant as reflected in Attachment "A"
hereto.

              (d)   If there is a Change in Control, whether or not the Change
of Control causes Employee's termination;

                    (i)   the Company shall pay Fifty Thousand Dollars
 ($50,000), minus taxes and other deductions/withholdings, to Employee as a
 Change of Control Bonus. The Change of Control Bonus is in addition to any
 other Base Compensation, Annual Bonus, or any other compensation, severance or
 benefits otherwise provided herein and will be paid to Employee no later than
 the thirtieth (30) business day following the Change in Control.

                    (ii)  Employee shall not be required to mitigate the amount
of any payment provided for in this Section 5(d) by seeking employment or
otherwise.

              (e)   In the event that any payment or benefit received or to be
received by Employee in connection with a Change in Control or the termination
of Employee's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company) (collectively the "Total
Payments"), would not be deductible (in whole or in part) as a result of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), by the
Company, an Affiliate or other person making such payment or providing such
benefit, the payments or benefits shall be so reduced until no portion of the
Total Payments is not deductible. Employee shall be entitled to elect which
payments or benefits shall be so reduced. For purposes of this limitation, (1)
no portion of the Total Payments the receipt or enjoyment of which Employee
shall have effectively waived in writing prior to the date of payment shall be
taken into account, (2) no portion of the Total Payments shall be taken into
account which in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Employee does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, and (3) the value
of any noncash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Company's independent auditors in accordance
with the principles of Sections 280(d)(3) and (4) of the Code.

              (f)   Employee agrees and acknowledges that his employment and the
other protections and benefits of this Agreement are full, adequate and
sufficient consideration for the restrictions and obligations set forth in
Sections 11 and 12 of this Agreement.

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              (g)   Execution of this Agreement by Employee makes Employee
ineligible for any compensation or benefits under the two page Term Sheet given
to Employee on January 31, 1998 which allowed for the payment of $250,000 to
Employee on change of control as defined within the Term Sheet. More
specifically, the two page Term Sheet (attached as Attachment "B" to this
Agreement) is null and void upon Employee's execution of this Agreement. The
only other prior agreement which will survive this agreement is the Employee's
rights under the 1996 Stock Incentive Plan.

         6.   Fringe Benefits. As an inducement to Employee to commence
              ---------------
employment hereunder, and in consideration of Employee's covenants under this
Agreement, Employee shall be entitled to the benefits set forth below (the
"Fringe Benefits") during the Term of Employment:

              (a)   Employee shall be eligible to participate in any health,
life, accident or disability insurance, sick leave or other benefit plans or
programs made available to other similarly situated employees of Company as long
as the plans and programs are kept in force by Company and provided that
Employee meets the eligibility requirements and other terms, conditions and
restrictions of the respective plans and programs.

              (b)   Employee shall be entitled to four (4) weeks paid vacation
during each year, subject to Company's generally applicable policies relating to
vacations, and excluding standard Company holidays. Employee shall give the
President (or his or her designee) written notice at least seven (7) days prior
to the commencement of any vacation in excess of five (5) business days.

              (c)   Company will reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the performance of
Employee's duties hereunder upon receipt of documentation therefor in accordance
with Company's regular reimbursement procedures and practices in effect from
time to time.

              (d)   Company will continue to pay the premiums ("the Company Paid
Amount") on a life insurance policy to be owned by the Company in the face
amount of $100,000, insuring the life of Employee, subject to the restrictions
and limitations contained in the insurance agreement or agreements, and provided
that the Employee passes each insurance company's required medical examination
and is insurable at standard rates. Employee shall at all times, while the
policy is in existence, have the option to pay any premiums to acquire
additional coverage beyond the Company Paid Amount so long as the insurance
agreement allows.

              (e)   The Company will continue to pay the yearly premiums
($5,000) for the Section 162 Executive Bonus Plan for Michael Scharff ("Section
162 Plan") (Policy Number 9605245) as long as the terms, conditions and
restrictions of the Plan allow. However, 

                                      -7-
<PAGE>
 
the Board and/or CEO of the Company has the right to modify, eliminate or alter
the Executive Bonus Agreement under which the Company had agreed to pay the
Employee's premiums for the Section 162 Plan.

         7.   Disability. If Employee suffers a Disability as that term is
              ----------
defined herein, the Company may terminate Employee's employment relationship
with Company at any time thereafter by giving Employee ten (10) days written
notice of termination. Thereafter, Company shall have no obligation to Employee
for Base Compensation, Annual Bonus, Fringe Benefits or any other form of
compensation or benefit to Employee, except as otherwise required by law or by
benefit plans provided at Company expense, other than (a) amounts of Base
Compensation accrued through the date of termination, (b) vested Stock Options
and (c) reimbursement of appropriately documented expenses incurred by Employee
before the termination of employment, to the extent that Employee would have
been entitled to such reimbursement but for the termination of employment. Any
compensation Employee receives from any Company paid for insurance, benefit plan
or policy under which the Employee was covered at the time of his inability, due
to his disability, including but not limited to workers' compensation payments
and payments from a Company disability plan will be deducted from the Company's
Base Compensation payment to Employee.

         8.   Death. If Employee dies during the Term of Employment, the Term of
              -----
Employment and Employee's employment with Company shall terminate as of the date
of Employee's death. Company shall have no obligation to Employee or Employee's
estate for Base Compensation, Annual Bonus, Fringe Benefits, severance or any
other form of compensation or benefit, except as otherwise required by law or by
benefit plans provided at Company expense, other than (a) amounts of Base
Compensation that have accrued through the date of Employee's death, (b) vested
Stock Options and (c) reimbursement of appropriately documented expenses
incurred by Employee before the termination of employment, to the extent that
Employee would have been entitled to such reimbursement but for the termination
of employment.

         9.   Termination for Cause. Company may terminate Employee's employment
              ---------------------
relationship with Company at any time for Cause. Upon termination of Employee
under this Section 9, Company shall have no obligation to Employee for Base
Compensation, Annual Bonus, Fringe Benefits, severance or any other form of
compensation or benefits other than (a) amounts of Base Compensation accrued
through the date of termination, and (b) reimbursement of appropriately
documented expenses incurred by Employee before the termination of employment,
to the extent that Employee would have been entitled to such reimbursement but
for the termination of employment.

                                      -8-
<PAGE>
 
           10.    Termination without Cause.
                  ------------------------- 

                 (a)   Company may terminate Employee's employment relationship
with Company at any time without Cause upon thirty (30) days written notice.
Notwithstanding the termination of Employee under this Section 10(a):

                       (i)   Company shall continue to pay Employee's Base
Compensation, as such Base Compensation would have accrued through a seventeen
(17) month period following such termination, so long as Employee executes and
does not revoke a Separation Agreement and General Release Agreement acceptable
to Company which will be substantially in the form attached hereto as Attachment
"C". (Payments will be made in installments in accordance with the Company's
regular payroll practices); and

                       (ii)  Employee shall be entitled to all Fringe Benefits
described in 6(a) herein, except for sick time, subject to the terms, conditions
and restrictions of the specific plans, for seventeen (17) months after such
termination without Cause. During the 17 months, the Company shall use its best
efforts to arrange for and to pay for health coverage for Employee which is
substantially similar to the individual coverage which Employee was receiving
immediately prior to his termination without Cause. The Company will not be
responsible for paying the premiums for the coverage of any of Employee's
dependents. Fringe Benefits otherwise receivable by the Employee pursuant to
this paragraph (ii) will be reduced to the extent comparable benefits are
actually received by Employee during such period.

                 (b)   Employee may terminate his employment with Company for
any or no reason, upon thirty (30) days written notice. If such notice is
provided by Employee, Employer, in its sole discretion, may waive the notice
period or any portion thereof, without pay (Base Compensation, Annual Bonus,
etc.) or Fringe Benefits to Employee for the remaining notice period. The
Company shall then consider the Employee's employment terminated on the date on
which Employee first gave written notice to the Company. Upon termination by
Employee of his employment under the provisions of this Subsection 10(b), the
Company shall have no obligation to Employee for Base Compensation, Annual
Bonus, Fringe Benefits, severance or any other form of compensation or benefits
other than (a) amounts of Base Compensation accrued through the date of
termination, and (b) reimbursement of appropriately documented expenses incurred
by Employee before the termination of employment, to the extent that Employee
would have been entitled to such reimbursement but for his termination of his
employment.

                 (c)   Termination of Employee's employment pursuant to Sections
7 through 10 shall release the Company of all its liabilities and obligations
under this Agreement, except as expressly provided in Sections 7 through 10.
Termination of Employee's employment pursuant to this Section shall not,
however, release Employee from Employee's obligations and restrictions as stated
in Sections 11 and 12 of this Agreement.

                                      -9-
<PAGE>
 
                 (d)   Employee shall not be entitled to any payment or benefit
under any Company severance plan other than as reflected herein under Section
10, practice or policy, if any, in effect at or after the time of Employee's
termination since this Agreement supersedes all such plans, practices and
policies, including the two-page Term Sheet attached as Attachment "B".

          11.    Company Property. All advertising, sales, manufacturers' and
                 ----------------
other materials or articles or information, including without limitation data
processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind physically furnished to Employee by Company or
developed by Employee on behalf of Company or at Company's direction or for
Company's use or otherwise in connection with Employee's employment hereunder,
are and shall remain the sole property of Company, including in each case all
copies thereof in any medium, including computer tapes and other forms of
information storage. If Company requests the return of such materials at any
time during or at or after the termination of Employee's employment, Employee
shall deliver all copies of the same to Company immediately.

          12.    Noncompetition, Trade Secrets, Etc. Employee hereby
                 ----------------------------------
acknowledges that, during and solely as a result of his employment by Company,
Employee will have access to Confidential Information as that term is defined
herein. In consideration of such special and unique opportunities afforded by
Company to Employee as a result of Employee's employment and the other benefits
referred to within this Agreement, the Employee hereby agrees as follows:

                 (a)   From the date hereof until six (6) months following the
termination of Employee's employment with Company, for any or no reason, whether
initiated by Employee or Company, ("Restricted Period A"), Employee shall not,
for his own benefit or the benefit of any third party, directly or indirectly
engage in (as a principal, shareholder, partner, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any business
operating within the United States or Canada (the "Restricted Area"), which
provides telemarketing services materially the same as the services Company
provides to third parties, or any other business activities which are materially
the same as and which are in direct competition with the Business, or with any
business activities carried on by Company or being planned by Company, at the
time of the termination of Employee's employment, or any other business
activities which are materially the same as the Business for any of the
Company's past, present or prospective clients, customers or accounts; provided
however, nothing contained in this Section 12 shall prevent Employee from
holding for investment less than five percent (5%) of any class of equity
securities of a company whose securities are publicly traded on a national
securities exchange or in a national market system.

                 (b)   From the date hereof until twenty-four (24) months
following the termination of Employee's employment with the Company, for any or
no reason, whether

                                     -10-
<PAGE>
 
initiated by Employee or Company, ("Restricted Period B"), Employee shall not,
for his own benefit or the benefit of any third party, directly or indirectly,
induce or attempt to influence any employee, customer, independent contractor or
supplier of Company to terminate employment or any other relationship with
Company. During "Restricted Period B", while Employee is still employed by the
Company, Employee shall not, directly or indirectly, disclose or otherwise
communicate to any of the clients, customers or accounts of Company, its
Affiliates or any Subsidiary thereof that he has been terminated, is considering
terminating or has decided to terminate employment with Company.

                 (c)   Employee shall not use for Employee's personal benefit,
or disclose, communicate or divulge to, or use for the direct or indirect
benefit of any person, firm, association or company other than Company, any
"Confidential Information" which term shall mean any information regarding the
business methods, business policies, policies, procedures, techniques, research
or development projects or results, historical or projected financial
information, budgets, trade secrets, or other knowledge or processes of or
developed by Company or any names and addresses of customers or clients or any
data on or relating to past, present or prospective Company customers or clients
or any other confidential information relating to or dealing with the business
operations or activities of Company, made known to Employee or learned or
acquired by Employee while in the employ of Company. Confidential Information
shall not include (1) information unrelated to the Company which was lawfully
received by Employee free of restriction from another source having the right to
so furnish such Confidential Information; or (2) information after it has become
generally available to the public without breach of this Agreement by the
Employee; or (3) information which at the time of disclosure to the Employee was
known to the Employee to be free of restriction as evidenced by documentation
from the Company which the Employee possesses, or (4) information which Company
agrees in writing is free of such restrictions. All memoranda, notes, lists,
records, files, documents and other papers and other like items (and all copies,
extracts and summaries thereof) made or compiled by Employee or made available
to Employee concerning the business of Company shall be Company's property and
shall be delivered to Company promptly upon the termination of Employee's
employment with Company or at any other time on request. The foregoing
provisions of this Subsection 12(c) shall apply during and for a period of five
(5) years after Employee is an employee of Company and shall be in addition to
(and not a limitation of) any legally applicable protections of Company's
interest in confidential information, trade secrets and the like. At the
termination of Employee's employment with Company, Employee shall return to
Company all copies of Confidential Information in any medium, including computer
tapes and other forms of data storage.

                 (d)   Any and all writings, inventions, improvements,
processes, procedures and/or techniques which Employee may make, conceive,
discover or develop, either solely or jointly with any other person or persons,
at any time when Employee is an employee of Company, whether or not during
working hours and whether or not at the request or upon the suggestion of
Company, which relate to or are useful in connection with the Business or with

                                     -11-
<PAGE>
 
any business now or hereafter carried on or contemplated by Company, including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of Company. Employee shall make full disclosure to
Company of all such writings, inventions, improvements, processes, procedures
and techniques, and shall do everything necessary or desirable to vest the
absolute title thereto in Company. Employee shall write and prepare all
specifications and procedures regarding such inventions, improvements,
processes, procedures and techniques and otherwise aid and assist Company so
that Company can prepare and present applications for copyright or Letters
Patent therefor and can secure such copyright or Letters Patent wherever
possible, as well as reissues, renewals, and extensions thereof, and can obtain
the record title to such copyright or patents so that Company shall be the sole
and absolute owner thereof in all countries in which it may desire to have
copyright or patent protection. Employee shall not be entitled to any additional
or special compensation or reimbursement regarding any and all such writings,
inventions, improvements, processes, procedures and techniques.

                 (e)   Employee acknowledges that the restrictions contained in
the foregoing Subsections (a), (b), (c) and (d), in view of the nature of the
business in which Company is engaged, are reasonable and necessary in order to
protect the legitimate interests of Company, that their enforcement will not
impose a hardship on Employee or significantly impair Employee's ability to earn
a livelihood, and that any violation thereof would result in irreparable
injuries to Company. Employee and Company acknowledge that, in the event either
party believes the other party has violated any of the terms of this Agreement,
the other party shall be entitled to seek from any court of competent
jurisdiction, without attempting arbitration, preliminary and permanent
injunctive relief.

                 (f)   If the Restricted Periods ("A" or "B") or the Restricted
Area specified in Subsections (a) and (b) above should be adjudged unreasonable
in any proceeding, then the period of time shall be reduced by such amount or
the area shall be reduced by the elimination of such portion or both such
reductions shall be made so that such restrictions may be enforced for such time
and in such area as is adjudged to be reasonable. If Employee violates any of
the restrictions contained in the foregoing Subsections (a) or (b), the relevant
Restricted Period shall be extended by a period equal to the length of time from
the commencement of any such violation until such time as such violation shall
be cured by Employee to the satisfaction of Company. Employee hereby expressly
consents to the jurisdiction of any court within the Eastern District of
Pennsylvania for the purpose of seeking a preliminary or permanent injunction as
described above in Section 12(e), and agrees to accept service of process by
mail relating to any such proceeding. Company may supply a copy of Section 12 of
this Agreement to any future or prospective employer of Employee or to any
person to whom Employee has supplied information if Company determines in good
faith that there is a reasonable likelihood that Employee has violated or will
violate such Section.

                                     -12-
<PAGE>
 
                 (g)   Any prior non-competition agreement entered into by
Employee is null and void as this covenant supersedes and replaces any such
agreements, including the non-competition provision of the Grant of Option.

          13.    Prior Agreements. Employee represents to Company that there are
                 ----------------
no restrictions, agreements or understandings, oral or written, to which
Employee is a party or by which Employee is bound that prevent or make unlawful
Employee's execution or performance of this Agreement.

          14.    Miscellaneous.
                 -------------

                 (a)   Indulgences, Etc. Neither the failure nor any delay on
                       ----------------
the part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

                 (b)   Controlling Law. This Agreement and all questions
                       ---------------
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, notwithstanding any conflict-of-laws doctrines of
such jurisdiction to the contrary, and without the aid of any canon, custom or
rule of law requiring construction against the draftsman.

                 (c)   Notices. All notices, requests, demands and other
                       -------
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
personally delivered, on the day specified for delivery when deposited with a
recognized national or regional courier service for delivery to the intended
addressee or two (2) days following the day when deposited in the United States
mails, first class postage prepaid, addressed as set forth below:

                       (i)      If to Employee:

                                Mr. Michael Scharff
                                409 Militia Drive
                                Lansdale, PA  19446

                                with a copy, given in the manner prescribed
                                above, to:

                                     -13-
<PAGE>
 
                                    -------------------------
                                    -------------------------
                                    -------------------------

                           (ii)     If to Company:

                                    RMH Teleservices, Inc.
                                    40 Morris Avenue
                                    Bryn Mawr, PA 19010
                                    Attention:  MarySue Lucci

                                    with a copy, given in the manner prescribed
                                    above, to:

                                    Jay Dubow, Esquire
                                    Wolf, Block, Schorr and Solis-Cohen LLP
                                    Twelfth Floor Packard Building
                                    111 South 15th Street
                                    Philadelphia, PA 19102-2678

                           In addition, notice by mail shall be by air mail if
posted outside of the continental United States. Any party may alter the address
to which communications or copies are to be sent by giving notice of such change
of address in conformity with the provisions of this Section for the giving of
notice.

                     (d)   Binding Nature of Agreement. This Agreement shall be
                           ---------------------------
binding upon Company and shall inure to the benefit of Company, its present and
future Subsidiaries, Affiliates, successors and assigns including any transferee
of the business operation, as a going concern, in which Employee is employed and
shall be binding upon Employee, Employee's heirs and personal representatives.
None of the rights or obligations of Employee hereunder may be assigned or
delegated, except that in the event of Employee's death or Disability, any
rights of Employee hereunder shall be transferred to Employee's estate or
personal representative, as the case may be. Company may assign its rights and
obligations under this Agreement in whole or in part to any one or more
Affiliates or successors, but no such assignment shall relieve Company of its
obligations to Employee if any such assignee fails to perform such obligations.

                     (e)   Execution in Counterparts. This Agreement may be
                           -------------------------
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.

                                     -14-
<PAGE>
 
                  (f)   Provisions Separable. The provisions of this Agreement
                        --------------------
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.

                  (g)   Entire Agreement. This Agreement contains the entire
                        ---------------- 
understanding among the parties hereto with respect to the employment of
Employee by Company, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing. Notwithstanding the foregoing, nothing herein shall limit
the application of any generally applicable Company policy, practice, plan or
the terms of any manual or handbook applicable to Company's employees generally,
except to the extent the foregoing directly conflict with this Agreement, in
which case the terms of this Agreement shall prevail. Both parties agree that
the two-page Term Sheet, attached to this Agreement as Attachment "B", is null
and void.

                  (h)   Section Headings. The Section headings in this Agreement
                        ---------------- 
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.

                  (i)   Number of Days. Except as otherwise provided herein, for
                        --------------
example, in the context of vacation days, in computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or such holiday.

                  (j)   Gender, Etc. Words used herein, regardless of the number
                        -----------
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.

                  (k)   Dispute Resolution. In the event of any disagreement of
                        ------------------
any nature whatsoever between the parties to this Employment Agreement in any
way relating to this Employment Agreement, except for the ability of the parties
to seek a preliminary or permanent injunction as described above in Sections
12(e) and (f), which need not be discussed between the parties or arbitrated,
the parties shall meet to attempt to resolve such disagreement. In the event of
their failure to do so within fifteen (15) days or such longer period of time as
shall be mutually agreed upon by the parties, either party may serve notice in
writing upon the other party requesting arbitration, which notice shall specify
in reasonable detail the nature of the dispute. Any arbitration under this
Section shall be held in Philadelphia, Pennsylvania or such

                                     -15-
<PAGE>
 
other place as shall be mutually agreed to by the parties, and conducted in
accordance with the procedures set forth hereafter and, to the extent not
inconsistent with this Section, in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association in effect on the date
of this Agreement. Company shall have the right and remedy to ask the arbitrator
to require Employee to account for any pay over to Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
Employee as the result of any transactions constituting a breach of Section 12,
and Employee shall account for and pay over such amounts to Company upon the
arbitrator's determination thereof.

                           (i)    Any arbitration under this Section shall be
before an arbitrator who shall be experienced in the area of employment law. The
arbitrator shall be selected by the parties from lists provided by the American
Arbitration Association.

                           (ii)   Within 60 days of the production of all
documents, evidence and witness list as outlined in the preceding section, the
arbitrator shall conduct the arbitration hearing. Each party will have one day
to present its case, unless, upon request the arbitrator determines that more or
less time is appropriate. Within 60 days of the arbitration hearing, the
arbitrator shall render a decision in writing to each party.

                           (iii)  Any arbitration award must (i) be rendered in
accordance with applicable law as described in this Employment Agreement and
(ii) be set forth in a written decision which sets forth the reasons (including,
without limitation, the conclusions of fact and/or law) upon which such award is
rendered. Judgment upon an arbitration award may be rendered in any court of
competent jurisdiction or application may be made to any such state or federal
court of competent jurisdiction for judicial acceptance of an order to
enforcement of an arbitration award, as the case may be. Any arbitration award
shall be final and binding on the parties. Once an issue has been arbitrated
pursuant hereto, the decision of the arbitrator shall be res judicata with
respect to such issue.

                           (iv)   The arbitrator shall have the power to issue
subpoenas compelling testimony and/or the production of documents from any
person whether or not a party hereto, which subpoenas shall be enforceable in
all courts of competent jurisdiction in the Eastern District of Pennsylvania. In
addition, the arbitrator and attorney-of-record shall have the power to request
through the above-mentioned courts of competent jurisdiction the taking of
depositions from any person, not a party or a director, officer, employee or
agent of a party, who cannot be subpoenaed or is unable to attend the
arbitration, whose testimony the arbitrator deems both important and relevant to
the resolution of the issues presented for arbitration.

                           (v)    The cost of the arbitration and all attorney
fees shall be borne by the parties in such proportion as the arbitrator shall
direct, with such arbitrator to give due consideration to the fault of the
parties.

                           (vi)   Notwithstanding the foregoing, the parties
need not arbitrate any request for preliminary or permanent injunctive relief,
may be brought by either 

                                     -16-
<PAGE>
 
party in any state or federal court in the Eastern District of Pennsylvania.
Such litigation will toll the Restricted Periods beginning on the alleged date
of Employee's violation until the date the dispute is resolved.

                  (l)   Jurisdiction of Courts. Any legal suit, action, claim,
                        ----------------------
proceeding or investigation arising out of or relating to Sections 11 or 12 of
this Agreement may be instituted in any state or federal court in the Eastern
District of Pennsylvania, and each of the parties hereto waives any objection
which party may now or hereafter have to such venue of any such suit, action,
claim, proceeding or investigation, and irrevocably submits to the jurisdiction
of any such court. Any and all service of process and any other notice in any
such suit, action, claim, proceeding or investigation shall be effective against
any party if given by registered or certified mail, return receipt requested, or
by any other means of mail which requires a signed receipt, postage prepaid,
mailed to such party as herein provided. If for any reason such service of
process by mail is ineffective, then (i) Company shall be deemed to have
appointed Jay Dubow, Esquire, Wolf, Block, Schorr and Solis-Cohen LLP, Twelfth
Floor Packard Building, 111 South 15th Street, Philadelphia, Pennsylvania 19102
as the authorized agent of Company to accept and acknowledge, on behalf of
Company service of any and all process which may be served in any such suit,
action, claim, proceeding or investigation; and (ii) Employee shall be deemed to
have appointed ___________________ as Employee's authorized agent to accept and
acknowledge, on Employee's behalf, service of any and all process which may be
served in any such suit, action, claim, proceeding or investigation. Nothing
herein contained shall be deemed to affect the right of any party to serve
process in any manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any jurisdiction other than
Pennsylvania.

                  (m)   Survival. All provisions of this agreement which by
                        --------
their terms survive the termination of Employee's employment with Company,
including without limitation the covenants of Employee set forth in Sections 11
and 12 and the obligations of Company to make any post-termination payments
under this Agreement, shall survive termination of Employee's employment by
Company and shall remain in full force and effect thereafter in accordance with
their terms.

         IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement in Philadelphia, Pennsylvania as of the date first above written.



By: /s/ Michael Scharff                    By: /s/ Raymond J. Hansell
   ------------------------------             -----------------------------
   Michael Scharff                            Raymond J. Hansell
                                              Chief Executive Officer 
                                              RMH TELESERVICES, INC.


Date: August 27, 1998                      Date: August 27, 1998
     ----------------------------               ---------------------------

                                     -17-
<PAGE>
 
Witness:                                   Witness:                         
        --------------------------                 -------------------------







                                     -18-