Changing agency at the end of a contract but still working for the same customer

[Fundamental Testing]

Hi All,
I'm just coming to the end of a contract and there is no extension. I work for an agency who have an agreement with a large consultancy who have an agreement with the (finally) end client. I've been approached by a different agency with possible work for the end client.
The challenge I have is that there is a clause in my original contract that says I can't work for the 'Client (or the Client's customer)' without paying them 25% of the total renumeration for the new contract.
Is this legal? It's not my fault the agency/consultancy didn't win the bid for a different piece of work and I can't see how this is enforceable.
Any advice would be much appreciated.

[Elliegirl]

Gordon Bennett! not seen that one before, quite innovative. The usual position (as in my case) was that you are banned from working for client and related for six months and sometimes longer. It's not really clear to me whether such clauses are enforceable. From what I read it depends on whether the agency can be bothered to enforce it. I was in a similar position to yours and in the end didn't need the threat of possible court action hanging over my head and went elsewhere. Be interesting to see what others think of this 25% renumeration approach. And if for some reason the contract ends two months in you still owe them for the length of the original contract???

[TheFaQQer]

If you didn't opt out, then you can go with whomever you like after eight weeks from the end of the contract without anyone needing to pay the fee specified in the contract.

[northernladuk]

Handcuffs are very enforceable if they are fair and reasonable. Switching agents when the first will lose money on the situation means the handcuff is rock solid. If they agent doesn't stand to lose anything then it's shaky to say the least. The biggest danger is not the agent actually taking it to court. It's the agent raising a stink with the client who doesn't want to know and will just drop you and have done with all parties.

[BlasterBates]

Have a look at this:

How contractors should handle restrictive covenants: part 1 - the agencies

How contractors should handle restrictive covenants: part 2 - the law

The fact that there is little case law speaks volumes. I would interpret that agencies use it as a deterrent, but would only enforce when it's clear cut, i.e. they offer you a fair renewal but you go direct. In all other cases the law is so vague and unclear I can't imagine an agency chasing it up other than a bellicose telephone call.

[SueEllen]

Actually the reason there is little case law using agencies is because the claims are cut and dry as they have been tested with other individuals and companies.

I've personally met someone who lost in court and know many others including contractors were it was unenforceable so didn't get further than a lawyers' desk.

If the agency you are with has definitely not won the work with the consultancy or been dropped by them, and you have seen a document/got the consultancy's word on this then go with the new agency.

If you haven't then depending on what the exact wording of the handcuff clause is in the contract it is a risk.

The reason why your exact wording is important is lots of unenforceability of the clauses is due to the poor wording.

In cases like this it generally helps if the consultancy and client are large e.g. like BT as it means unless the clauses are carefully written they are unreasonable and unfair.

Also larger consultancies/companies will have their own legal expert who maybe willing to tell your old agency to go away.