Breach of Contract

[fzbucks]

Hello guys, Help required - my company is potentially being sued for damages by the agency claiming a financial loss due to my contract ending at a client them me going with an outsourcing company that the client uses:

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 the client 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.

[rootsnall]

I'm surprised they are pursuing you for 4 months margin, they must of been frozen out at the client altogether and are trying to prove a point. Have you discussed it with the client as they will be breaking a similar restriction in their agreement ? Try fobbing them off and they may go away for that amount of money. Did they follow the opt out rules properly, could be a fob off excuse ? One solution is pay them the 4 months margin but wait until you've earned it first.

[malvolio]

If you work for the oustource provider, you don't work for the client. That's what "outsource" means. Tell them to stop being childish and go learn their contract law, then threaten to counter-sue for restraint of trade.

If you are in the PCG, use their legal helpline. If you aren't, either join up now or get hold of a decent solicitor such as Egos.

[gingerjedi]

I have a similar situation here, as far as I understand if the agency is no longer an approved supplier then you have nothing to worry about, I would threaten to sue them for trying to restrict your ability to work where they have no jurisdiction.

If they can't supply then they don't have a leg to stand on.

[fzbucks]

Thanks for the quick replies - I've tried talking to the agency and they said the options are that I work through them again on the current role - explained to them that this is not possible as the Outsource provider does not deal with them.

I enquired about buying myself out of the contract and they said it would be at a price of their margin for 12 months - argued that surely it would only be for four months but they are adament that it is 12 months???

They are pursuing the client in addition to myself as there are apparently a few contractors who left them after I did - due to them no longer being on a preffered supplier list for the client.

They don't seem to want to let go of this issue even after I've offered to buy out based on four months of their margin - they insist 12 - can't see why they would be legally entitled to 12 months.

Tried getting legal insurance but as this is an issue that is potentially agoing to go legal have been told by one of the companies that they wouldn't cover it - will have a look at PCG and do a search for Egos.

Thanks again.

[ASB]

"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."

I doubt that is all it said (but if it did you can probably tell them to go stuff themselves). I would imagine however that it was a bit wider than that.

It may well be that a court would find the 4 month restraint reasonable. There are only 2 ways to enforce the restraint. Either you agree terms with them or they sue. If they somehow manage to force you out then you can counter sue.

Take advice and if your chosen advisors think you have a decent case tell them to put up or shut up. Problem is good advice might cost nearly as much as settlement. Equally the other team know that they can only enforce by court hearing so if they truly beleive it is headed that way they will probably negotiate.

They are basically just assuming you'll do a deal because they think their threats will frighten you.

[gingerjedi]

Feck me, they cannot supply as they are not on the list what part of that don't they get? I can't see how thy can possibly pursue this? Why not call their bluff and ask them to produce a contract? I bet they can't.

In my situation the IT support company I contracted for has changed but the client we serve has not, the new support co. took us on as we know the site and the system but the agency most of us are with is not a preferred supplier, at the end of this contract period I fear I'm going to be in the same situation.

You're not working for Atlas are you?

[rootsnall]

Sounds like the client and outsourcer need to sort it out or atleast brief you on what their approach is. If you are sure 4 months margin is all they can possibly demand, you've offered that and they have refused, then I'd ignore them and wait for something official from them. Agents are good at threats but if the numbers don't stack up I would doubt they'd start running up legal bills.

[malvolio]

Disagree. I had the reverse situation - contract with an outsource consultancy then within a month joined their end client. Agency claimed I'd btroken the handcuff, consultancy argued that I had no previous contract with the end client so go away.

It is not easy to argue on a level palaying field, and it will help to get your current and previous clients on side, but they have a very weak case. Do not offer to buy anything out, why should you, you havn't broken any contractual agreements, unless they are trying to claim the outsourcer is a connected company or subsidiary of the client, and I suspect the relevant Boards will have something to say about that.

[Lockhouse]

You are being too nice.

You should say "Go on then - sue". 99 times out of 100, that's the last you'll hear of it. They know you are a soft touch and they are using your own fear against you.

Most of the times these things don't stand up in court anyway and I would argue that as they couldnt have placed you themselves it's effectively restraint of trade.

I would tell them to take a running jump.