Release from restrictive covenant within a contract

[foolishboy]

Have been contracting for a company now for more than 4 renewals but rate has not changed, still sub market value.

Found another role internally via another agency at higher rate for another business area. New Agency are insisting they cannot progress unless first agency "release" me from the restrictive covenant within current contract that prevents me from dealing direct with end company.

Existing agency refuse to "release" me despite my protestations of unreasonableness and demonstration of restraint of trade.

It seems there is nothing I can do about this - I have told the new agency that I am prepared to take the risk but they insist on it being formalised. This smacks of agencies protecting each others backs. The question is how do I get the first agency to see sense and "release" me. Are they being reasonable by not playing ball - their argument is based on financial loss, ignoring the financial gain of 4 renewals.

All comments most welcome

[NonnyMouse]

It's not in agency a's interest to release you from the covenant. I'd suggest either finding a new role elsewhere or come the next renewal demand a higher rate and walk away if you don't get it.

[TykeMerc]

I have to ask, did you Opt Out of the regulations? If so then in essence there's nothing you can do.

If you didn't there's still basically very little you can do.

Your current agency has nothing to gain by releasing you and since the old role is via an agency that clearly doesn't have the new role the fall back of using them for the new role appears cut off.

Literally speaking without taking it to court (or threatening to and meaning it) you've very little chance of making major progress and the court route wouldn't be quick or good for reputations at the client.

[northernladuk]

Couple of things strike me here. It's not often clients have different rates for different areas and they don't really tend to really vary rates around a general skill level so am a bit surprised to hear this is the case at your client. I am wondering if a) the new agent is lying about the rate and it will mysteriously get cut if you could apply or b) your current agent is taking a bigger cut. First thing to do is to get it in writing from your current agent that they are on a fixed margin. If not have a chat with the client about rates. It's not advised but if you are thinking of leaving what have you got to lose.

Also why do you not speak to your current agent and see if they can put you forward for the role. If they can't then you are in an interesting situation. It's not going to help you but it's interesting none the less. If the old agent cannot put you forward and have no chance of making any money from this new role then the handcuff clause is invalid. Handcuffs are only enforceable if the they are fair. An agent stopping you working for a client where they have absolutely no interest and can prove no loss then they are on a hiding to nowhere. Problem is agents don't want to get in a to a legal bun fight so even pointing this out isn't going to help.

You could also ask your old agent how much they want to release you. Highly unlikely but the sums might work out in your favour if the rate is higher. Point out to them they can't put you forward for the role so their handcuff isn't valid and bung them a few hundred quid or something.

[TheFaQQer]

Ask the agency to name a price for you to buy your way out of the contract. If they will, and it's amenable to you then pay it; if not then either stay there or leave and find something else.

Those are your three options, really.

[foolishboy]

Couple of things strike me here. It's not often clients have different rates for different areas and they don't really tend to really vary rates around a general skill level so am a bit surprised to hear this is the case at your client. I am wondering if a) the new agent is lying about the rate and it will mysteriously get cut if you could apply or b) your current agent is taking a bigger cut. First thing to do is to get it in writing from your current agent that they are on a fixed margin. If not have a chat with the client about rates. It's not advised but if you are thinking of leaving what have you got to lose.

Also why do you not speak to your current agent and see if they can put you forward for the role. If they can't then you are in an interesting situation. It's not going to help you but it's interesting none the less. If the old agent cannot put you forward and have no chance of making any money from this new role then the handcuff clause is invalid. Handcuffs are only enforceable if the they are fair. An agent stopping you working for a client where they have absolutely no interest and can prove no loss then they are on a hiding to nowhere. Problem is agents don't want to get in a to a legal bun fight so even pointing this out isn't going to help.

You could also ask your old agent how much they want to release you. Highly unlikely but the sums might work out in your favour if the rate is higher. Point out to them they can't put you forward for the role so their handcuff isn't valid and bung them a few hundred quid or something.

Thanks for the response. Current agency are not on a fixed margin, but I know they are on 12% of gross. Current agency cannot put me forward for the new role as they know nothing about it and your thought process is the same as mine - its unenforceable imo. The real pain is the new agency insisting on a formal release statement, as without this I would be happy to take the risk and give the finger to the current agent.

Its the usual story with agents - 17 years contracting and have never met a decent honest one in that time.

I have come to the conclusion that its not worth fighting over, despite the questionable legality of it, and will spend my efforts looking externally, as a previous poster suggested.

[jmo21]

No chance of just speaking directly to someone in the new business area about taking you on through your existing agency.

Seems strange that a different business area in the same company can't or won't use them.

You're already on the books and introduced to the end client, so new agency haven't introduced you to the company.

[foolishboy]

No chance of just speaking directly to someone in the new business area about taking you on through your existing agency.

Seems strange that a different business area in the same company can't or won't use them.

You're already on the books and introduced to the end client, so new agency haven't introduced you to the company.

Well thats the other confusing part. The new agency, who appear to be the main agency for the end client, are telling me that current agency are not on the PSL and that they are not sure how I have even been able to use them. Its seems complex and I dont trust the info either of these agents are telling me.
I cant speak to anyone on the new business side as I have no contacts there and havent had interview yet - this is early days.

[BolshieBastard]

Surely the simplest solution here is for the OP to discuss the opportunity to move internally within the client with their lead \ PM \ whoever they are reporting into and the lead \ PM \ whoever in the other area?

Why do people make dramas out of molehills? There's a serious risk he'll hack off his current area if he's not careful.

Im not surprised the original agency wont play ball and the OP is serously taking the piss expecting the agent to move aside in these circumstances.

[the_rangdo]

FWIW I had a very similar situation this year.

Existing contract was coming to an end with no chance of extension. 2 weeks before I walked off site another role popped up, different business area (25% rate increase too)

Phoned old agent to ask if they'd put me forward (albeit I was referred internally anyway through contacts), they advised me they weren't on the PSL for the other business area so nothing they could do, cheerio.

Phoned new agent, advised of the situation. They checked with ClientCo that there was no issue as far as they were concerned. All hunky dory, off I popped to the new role.

Old agent found out, kicked up a verbal fuss so I drafted a letter basically pointing out how I attempted to continue the relationship with them but it's hardly reasonable to expect me to park my bum on the bench so I can stick to a clause that's effectively nonsense if they are unable supply services to the new business area.

They spoke to the client, more or less got told to shut up of f-off

5 months later, nothing's happened. I did take some legal advice at the time and while nothing could be guaranteed it was felt the old agent was acting unreasonably. It could still rear its ugly head again at some point I suppose but I'll deal with that as and when it arises.

YMMV of course.