Non disclosure agreement (NDA) and handcuff clauses

[ContractorBanking]

What's the general opinion on signing NDA and typically how long would you expect the handcuff clause to be?
ie you cannot work for x client for x length of time.

And is it even enforceable, if say, months later (but within the handcuff clause) you apply for a totally different position in the firm via another agency/consultancy?

Does it make a material difference if you signed the NDA but never worked for the end client?

[northernladuk]

Well if the client won't let you work without an NDA you've kinda got your answer. Just make sure you read and understand it and keep a copy. Signed but didn't work? But you didn't see anything to disclose?? Again Just understand the document, your answers will be in the detail.

On the Handcuff 12 months in pretty unenforceable but 6 months seem to be the norm. It can't be too generic else it will become unenforceable as well. Sounds like a get out for you but it isn't as a woolly clause will Just cause problems down line.

Your options in/out status affects the handcuff so make sure you reading in that and understand it as well.

[Antman]

That 6 month limit, is that based on anything? I'm not aware of it being tested in court (- but that doesn't mean much - me that is, not the court d'uh!) Is there something similar in employment law you can point to, or is it just the CUK consensus?

Just asking like.

[ContractorBanking]

Just to add some colour to my query...

Its an assignment with an Investment Bank, through a consultancy.

Now, normally I wouldn't entertain the idea of going through the consultancy but I really like the spec I've been given.

Normal confidential clauses are fine, but this one has a 2 year handcuff clause, which is ridiculous. Especially, if I apply it, don't get it - then for 2 years I can't work for that firm! Not sure of the practicalities of trying to enforce such action..

[NibblyPig]

My current gig is 12 months, I didn't question it and I doubt I'll work for this client again.

In the future since recruiters tend to ask you to opt out after you've got an offer, I'll probably say I'm not opting out at the last second unless you reduce it to 12 weeks, if it looks like a good gig (location, rate) that has a chance of hiring direct in the future.

I believe 12 weeks is the maximum if you are not opted out.

But every situation will be different.

[czakky]

I've mentioned this before, and I will again - your handcuff clause is only one side of the issue.

The client contract (which chances are, you will never see) also will have a handcuff clause in it, involving taking you back in any capacity, and this is something that's totally out of your control; especially as its generally not the line manager who signs off these terms, its often HR, who LOVE process based crap.

Also, the NDA being for 2 years into banking - could it be that the consultancy are building something totally new, and they don't want the bank to cut them out and deliver it themselves, which means for the next 2 years, if they want support they have to use the consultancy, and can't take you direct to help them? (cutting out the fat consultancy fee?) This makes total business sense for the consultancy, as its a guaranteed revenue stream for them.

[northernladuk]

Just to add some colour to my query...

Its an assignment with an Investment Bank, through a consultancy.

Now, normally I wouldn't entertain the idea of going through the consultancy but I really like the spec I've been given.

Normal confidential clauses are fine, but this one has a 2 year handcuff clause, which is ridiculous. Especially, if I apply it, don't get it - then for 2 years I can't work for that firm! Not sure of the practicalities of trying to enforce such action..

I think we are getting mixed up with the handcuff and NDA durations which might not be the same but if we are talking about the handcuff then the general rule is that it should be fair and reasonable. If a handcuff is well worded and there is a valid reason why it must be this long then it will stand up.
If we are talking about a greedy agent wanting to keep dibs then anything over 6 months hasn't a snowballing hell's chance of standing up. In my experience most handcuffs are so broad they don't pass the fairness test anyway. An example of this is where an agent tries to invoke when you go for a gig with the client you've already worked for they are not currently representing. No loss can be proven so it fails.

That said if you are working for an R&D heavy client like a pharma on say a cancer treatment you could argue a 12 months or more handcuff to stop you working on cancer treatments at another pharma is quite reasonable as they have patents and IP to protect. This handcuff will NOT stand up if you go work on stop smoking drugs at a rival though. See what I am getting at.

I suspect it's not tested in court for a number of reasons...
1) Poorly worded clauses that don't stand up to scrutiny (I'd say this is the case in a large majority of issues)
2) Agreement is reached before court via through negotiation or through legal advice
3) The handcuff never achieves what it was meant to do as per the example above so they just forget it

[BlasterBates]

Handcuff clauses are there to deter, primarily to stop you jumping ship mid contract. The lack of court cases just shows you how enthusiastic agencies are in chasing this up.

My conclusion is anything beyond the blindingly obvious such as switching agencies mid-contract won't be chased up, backed up by what I've read on this.