Non solicitation clause in contract

[kilburnpup]

The clause:

"
12. NON-SOLICITATION
For the duration of this Agreement and for 12 months after its termination, the
Intermediary (contractor limited company) shall not and shall ensure that the Contractor shall not:

12.1
solicit, interfere with or endeavour to entice from the Agency or the Client any
person, firm, employee or company who was at any time during the
period of this Agreement an employee, client or customer of the Client;
and

12.2
solicit additional or further work from the Client with the intention of
performing services for the Client otherwise than directly through the Agency.

"

So the situation is this:

1. Currently contract via Agency to public sector body.
2. Due to IR35 changes in public sector and public sector body giving a blanket "IN IR35" status to all contractors Agency has given notice to terminate all contracts and will no longer be engaging any contractors via Personal Service Limited companies for this public sector Client.
3. Agency has offered to retain contractors via umbrella or PAYE directly.
4. Public sector body is in talks with an alternative service provider who will class all contractors as OUTSIDE of IR35.
5. At suggestion of public sector body ("Client") have engaged in talks with alternative provider, who propose to employ contractor to provide a packaged service not based on man hours but deliverables to public sector body.

Personal situation of contractor (and possibly a number of others included in this proposal) makes it more or less impossible to work as PAYE or via umbrella and seriously considering taking up offer of the new service provider.

Contractor has not directly solicited "Client" but rather is responding to suggestion proposed by "Client". The "Client" is looking into this with the hopes to retain a number of critical resources to guarantee continued service and delivery of key IT systems.

Would be interested to have your views on this please.

What type of evidence from "Client" or otherwise would be required to protect contractor (if at all possible) against this clause?

Would "Client" become liable if it accepts responsibility for this?

[SueEllen]

How large is Is the public sector body? Is it a large one like HMRC or the DWP? Or are they small like the UK Hydrographic office?

[northernladuk]

On the face of it the agency is still making money from the client so if you move the agency will be able to prove tangible loss so the handcuff is almost certainly in place. If the client is looking at changing agents I would expect the agency to present them with a price to buy them out. If they don't I'd think the agent will pull the clause on you.

Take away the complexity of the IR35 thing it's still a matter of an agent having dibs, client wants another agent because they are offering better terms. Old agent is going to be out of pocket for it so the handcuff looks like it will stick.

Up to your client to sort this one I would say.