Exclusivity Clause enforcement (Newbie)

[Vaprak001]

Hi, I'm a contractor working in Belgium, but I'm hoping to find any relevent UK legal advice that will apply in my case:

I have been threatened with legal action by my previous agency for breach of contract based on their exclusivity clause. It was the standard contract where I couldn't work for the same client for 12 months after termination. However, I believe this clause was a 'Restraint of Trade' - do I have a case based on the following:

1. The agency was informed that my contract was coming to an end with 4 months notice. During which time they didn't contact me with one single replacement role.
2. Left to my own devices, I applied for several positions on external websites for numerous roles with a number of other agencies, which I was entitled to do. However, during an interview with one agency I was informed that the contract was at my current company but an entirely different role in a different division.
3. I immediately investigated whether my existing agency were also advertising the role and they had no such available. The new agency was exclusively advertising it (subsequently my old agency has said it wasn't exclusive - I doubt this but if so surely they were using the exclusivity clause to restrict my work by not telling me about it?)
4. My interviews were successful and I was offered the new role. This was the only employment possibility for me as other applications hadn't gone well. So I either breached a contract or faced unemployment.

I don't see how this clause couldn't be considered restraint. My old agency found no role for me, had no access to the new role and would have happily left me unemployed. The new role is entirely different to the old one, indeed my old department has even been merged with another team. Please provide any advice you can as they are threatening to sue for a substantial amount.

Thanks

[Bluebird]

Hi, I'm a contractor working in Belgium, but I'm hoping to find any relevent UK legal advice that will apply in my case:

I have been threatened with legal action by my previous agency for breach of contract based on their exclusivity clause. It was the standard contract where I couldn't work for the same client for 12 months after termination. However, I believe this clause was a 'Restraint of Trade' - do I have a case based on the following:

1. The agency was informed that my contract was coming to an end with 4 months notice. During which time they didn't contact me with one single replacement role.
2. Left to my own devices, I applied for several positions on external websites for numerous roles with a number of other agencies, which I was entitled to do. However, during an interview with one agency I was informed that the contract was at my current company but an entirely different role in a different division.
3. I immediately investigated whether my existing agency were also advertising the role and they had no such available. The new agency was exclusively advertising it (subsequently my old agency has said it wasn't exclusive - I doubt this but if so surely they were using the exclusivity clause to restrict my work by not telling me about it?)
4. My interviews were successful and I was offered the new role. This was the only employment possibility for me as other applications hadn't gone well. So I either breached a contract or faced unemployment.

I don't see how this clause couldn't be considered restraint. My old agency found no role for me, had no access to the new role and would have happily left me unemployed. The new role is entirely different to the old one, indeed my old department has even been merged with another team. Please provide any advice you can as they are threatening to sue for a substantial amount.

Thanks

do you know whether you were opted in or out of EB regulations ?

[Vaprak001]

Thanks for the quick response.

Sorry, I'm a bit of a newbie to the board and contracting - what are the EB regulations?

[Bluebird]

Thanks for the quick response.

Sorry, I'm a bit of a newbie to the board and contracting - what are the EB regulations?

Employment Business Regulations.
http://www.opsi.gov.uk/si/si2003/20033319.htm

Basically the terms about not working for the same client within a specified period of time are AGAINST the the EB regs - unless of course your agency convinced you to OPT OUT of the regs in which case they can apply.

However, it's not as straight forward as that:

There are specific rules that apply to the opting in /out which mean that even if you do opt out it may not mean that you have opted out depending on when you did opt out and your relationship with the agency / cleint at that time. There are a number of posts on here which go into it further.

Confused yet ? Not surprised.

Do you remember signing an "opt out" form ?
Ask your agency if you did opt out - if you didn't they can't enforce the clause - let them know thats why you want the info - that might make them back down.

[Vaprak001]

Thanks Bluebird (its a shame you narrowly missed out on having to play Swansea in the Championship next season, eh)

I have no recollection of having to opt-out of EB regulations, or an equivalent. I suppose my next course of action is to find out if these regulations have any foundation in Belgium - do you have any idea? I won't contact the agency about this yet as I don't want them to have advanced notice of what I'm working on.

[Bluebird]

Thanks Bluebird (its a shame you narrowly missed out on having to play Swansea in the Championship next season, eh)

I have no recollection of having to opt-out of EB regulations, or an equivalent. I suppose my next course of action is to find out if these regulations have any foundation in Belgium - do you have any idea? I won't contact the agency about this yet as I don't want them to have advanced notice of what I'm working on.

Damn bloody shame

The EB regs are specific to the UK, although I'd be surprised if there are not equivilents in Belgium.

As a starting point I'd point out to the agency in writing that you don't think that clause can apply and give a couple of reasons [ differnt role, restraint of trade etc ], also make the point that you require explanation of their stance in order to pass onto your legal advisors who have already advised you to write this letter.

That shjould let you know whether they are trying it on or truely believe that they are correct in what they say.

If you are a member of the PCG they could also give you legal advise, failing that you'll probably at some point need to get the advise of an employment law legal firm in Belgium - depending on their fees and the amount the agency are claiming will give you an idea of which way to proceed.

Depending on your relationship with the client you could also ask them to "exert" pressure on the agency, or tell the agency [ in your letter ] that you intend to seek the client help in overcoming this problem.

[ASB]

All argument about is bluster initially. The only way to get a restraint upheld is for a restrainer to take the restrainee to court. The court will always start from the view that the restraint is neither reasonable nor justified. The restraint is intended to protect the restrainers business interests, a lot fail because they are two wide. The restraint will be allowed in its entirity or not at all. The court can't say "well 6 months would have been OK so we'll infer that".

A court will not generally allow a restraint which impinges on somebodys ability to earn a living.

In your case it appears the role you are now doing was not available through the original agent, there does not seem to be much of a related business interest between the agency and the client. I would think you are likely to be OK.

They can threaten to sue as much as they like, but in the final analysis there is absolutely nothing they can do until they actually sue. Given the circumstances they will probably have to find a solution that benefits then, gets the restraint OK'd by a judge and also is compliant with Belgian law.

I would be inclined to get a professional legal opinion, then tell them to put up or shut up.

[tim123]

I agree 100% with ASB

tim

[fzbucks]

In the same situation

Hello I'm in the same situation as the first poster on this board.

Under my limited company I signed a contract that included a clause that I could not work directly with the client for a period of 4 months from the end of my contract.
My contract with theclient came to an end towards the end of february this year and I subsequently took a contract with a company that jointly provides the IT support with the client through another agency.

The first agency has since contacted me stating they intend to sue my company for breach of contract, I have argued that I am not working directly for the client and working through the company who the client jointly outsouces the support to but they are adament that this still counts as working directly for the client.

The position I am working in is different as I now work shifts and under a different line manager but it is in the same department.

The position I work in and the Outsourcing client that I work for have confirmed that the original agency could not provide them with a contractor for the position as they only use certain agencies as approved suppliers.

I did opt out of the regulations so I am not covered by the DTI - does anybody know where I could obtain legal advice on this issue as the agency have stated they intend to sue my company for breach of contract unless I work through them on this contract (which is not possible as they are not an approved supplier) or that I have to quit the contract which would put me out of work. If I don't do either of these they will sue my company for the losses they have made.

Thanks for any advice in advance.