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Handcuff clause - again...

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    Handcuff clause - again...

    Hi,

    I have 8 weeks contract working trough Agency (A), for Service Provider (SP) but services are carried for big Client (BC).

    My contract is with A and SP is mentioned there as Client and BC is not mentioned there at all.

    I opted-out and here is the handcuff clause:

    "The Consultancy shall not and shall procure that the Consultancy Staff shall not during the Assignment or for a period of 6 months following the termination of the Assignment supply the services of the Consultancy Staff directly, or through any other person, firm or company, to any Client for whom it has carried out the Assignment at any time during the previous 6 months."

    where

    "Consultancy" is my LTD
    "Client" is Service Provider

    Now, as you can imagine, BC offering me direct contract immediately after current one will end - this big move for my career and potentially long-term assignment. I already used search and went trough tens of similar cases, but was unable to find the same.

    My questions are:

    1. Does the wording of this clause matters? For example contract end referred in the contract as "expiration" and termination is used when one of the parties terminate it before end date:

    "This Agreement shall commence on the date set out in the Schedule and shall continue until completion of the Consultancy Services to the reasonable satisfaction of the Client at which time this Agreement shall expire automatically unless previously terminated by the Employment Business or the Consultancy giving the other party the period of notice specified in the Schedule."

    To me it seems as the handcuff clause above only applicable if either party terminates contract before its end. Or the wording is irrelevant here?

    2. Am I correct assuming that in court Agency can only claim reasonable money - so if they getting now 50 pounds a day, they will be unable give reason to claim any more?

    3. Is there any way to get legal representation for such cases (IPSE, Qdos or any other)? - I don't even know if Agency will try to sue, just want to be prepared?

    Sorry for raising this question again, just wanted to ask community opinion on it...

    #2
    Don't know how well this will work after only 8 weeks on the job, but it is possible to negotiate around these things; depends on how important the relationship with SP is to A, and how important the relationship with BC is to SP; it's possible that it's in no-one's interest to rock the boat.

    Comment


      #3
      Originally posted by Sub View Post
      Hi,

      I have 8 weeks contract working trough Agency (A), for Service Provider (SP) but services are carried for big Client (BC).

      My contract is with A and SP is mentioned there as Client and BC is not mentioned there at all.

      I opted-out and here is the handcuff clause:

      "The Consultancy shall not and shall procure that the Consultancy Staff shall not during the Assignment or for a period of 6 months following the termination of the Assignment supply the services of the Consultancy Staff directly, or through any other person, firm or company, to any Client for whom it has carried out the Assignment at any time during the previous 6 months."

      where

      "Consultancy" is my LTD
      "Client" is Service Provider

      Now, as you can imagine, BC offering me direct contract immediately after current one will end - this big move for my career and potentially long-term assignment. I already used search and went trough tens of similar cases, but was unable to find the same.
      I can't imagine.. Cause handcuffs and antipoaching agreements mean this shouldn't happen. Not sure why you couldn't find the same as it looks pretty straight forward.

      My questions are:

      1. Does the wording of this clause matters? For example contract end referred in the contract as "expiration" and termination is used when one of the parties terminate it before end date:

      "This Agreement shall commence on the date set out in the Schedule and shall continue until completion of the Consultancy Services to the reasonable satisfaction of the Client at which time this Agreement shall expire automatically unless previously terminated by the Employment Business or the Consultancy giving the other party the period of notice specified in the Schedule."

      To me it seems as the handcuff clause above only applicable if either party terminates contract before its end. Or the wording is irrelevant here?
      Erm.. The wording of clauses tend to matter. It's the basis of the whole thing and sets out the whole contract. The wording says reasonable satisfaction and contract expires. How on earth do you come to the conclusion it only relates to termination. The wording is important, not irrelevant.

      2. Am I correct assuming that in court Agency can only claim reasonable money - so if they getting now 50 pounds a day, they will be unable give reason to claim any more?
      They can claim any losses incurred. Anything they spent advertising and sourcing the role you took, the charge that is normally associated with buying people out of contract, hurt feelings whatever. What they will actually get then who knows. Not sure where you are going with this one but your new client will drop you the moment the threat of legal action appears. You are a contractor and not important enough to risk legal action for.
      3. Is there any way to get legal representation for such cases (IPSE, Qdos or any other)? - I don't even know if Agency will try to sue, just want to be prepared?

      Sorry for raising this question again, just wanted to ask community opinion on it...
      Interesting question. I am sure if you pay them they will represent you but can't see why either would represent you when you are clearly breaching the terms of the contract. Any contract lawyer will do I guess as your only hope is to try prove the handcuff is unfair and believe me... Your client will have binned you well before that.

      Am sorry to say but you appear to have an air of self importance here when really you are just another contractor with less than 2 months with the client under your belt.

      You've also forgotten there are two handcuffs here. The SP will have anti poaching clause. The agent is going to kick up a fuss and the SP is going to kick up a fuss. The client isn't going to get embroiled in a legal dispute over a contractor with a 2 month relationship.

      Best you can do is speak to all concerned and see if you can negotiate your way through it. They may not care so happy days... But as you are potentially taking revenue from not one but two parties then good luck with that.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        There are loads more things that occurred to me while posting this but it's such complex situation you are not going to get a full answer on here.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post
          There are loads more things that occurred to me while posting this but it's such complex situation you are not going to get a full answer on here.
          Thanks for the reply!

          In this case I am not seeking for an answer, as it probably not exists at this moment of time - I just want to hear what other contractors would do. I am trying to figure out approach how to handle the situation - offer is just really good (both money and career-wise), so I considering every option including legal action.

          My relationship with BC is years-long, worked for them trough other agencies but usually there were some gap between. Despite I am getting lots of support from BC, in case of legal action from SP (which is unlikely, but still possible) they will just walk away - here I can only agree with you.

          For now I think that best scenario is to try to settle this with A and ask BC to help me out and if that will not work - then I will find another gig and will sleep well.

          Comment


            #6
            Originally posted by Sub View Post
            Thanks for the reply!

            In this case I am not seeking for an answer, as it probably not exists at this moment of time - I just want to hear what other contractors would do. I am trying to figure out approach how to handle the situation - offer is just really good (both money and career-wise), so I considering every option including legal action.

            My relationship with BC is years-long, worked for them trough other agencies but usually there were some gap between. Despite I am getting lots of support from BC, in case of legal action from SP (which is unlikely, but still possible) they will just walk away - here I can only agree with you.

            For now I think that best scenario is to try to settle this with A and ask BC to help me out and if that will not work - then I will find another gig and will sleep well.
            From your posts I am not sure whether you have actually been offered a new contract directly with BC ? If so then according to the contract wording you gave you should in theory be free to accept it. BUT it is very common for agencies to state that SP AND SP's clients are covered by the handcuff, are you sure that's not stated elsewhere in your contract ?

            A's losses are restricted to the profit they would have made if they were the intermediary in your contract with BC minus any of the costs they would have incurred during its execution.

            But as stated by others, the first whiff of legal action by A will most likely have BC drop you like a hot potato...

            <Edit: Note also, that SP will likely have a handcuff clause with BC that will restrict BC's freedom for action too</Edit>

            Best of luck,

            Boo
            Last edited by Boo; 9 April 2016, 10:34.

            Comment


              #7
              Originally posted by Boo View Post
              From your posts I am not sure whether you have actually been offered a new contract directly with BC ? If so then according to the contract wording you gave you should in theory be free to accept it. BUT it is very common for agencies to state that SP AND SP's clients are covered by the handcuff, are you sure that's not stated elsewhere in your contract ?

              A's losses are restricted to the profit they would have made if they were the intermediary in your contract with BC minus any of the costs they would have incurred during its execution.

              But as stated by others, the first whiff of legal action by A will most likely have BC drop you like a hot potato...

              Best of luck,

              Boo
              Yes, I will be invoicing BC directly. The are few things that make my case look strong: offered position at BC never been on the market, A does not have opportunity to supply staff directly to BC, only trough SP and clause wording seems to be preventing me to work for SP not for BC. There are no other clauses covering this in the contract.

              Unfortunately, I am getting just about 60% of what BC pays - rest ending up on SP and A accounts, so they potential claim can be quite large.

              Regardless of all above it seems that handcuff here is somehow enforceable and both SP (less probably) and A (probably) can try to make some money of it. So I will try to talk with them, and if their ask will be reasonable - maybe just pay it.

              Comment


                #8
                Originally posted by Boo View Post
                From your posts I am not sure whether you have actually been offered a new contract directly with BC ? If so then according to the contract wording you gave you should in theory be free to accept it.
                That was my take. If SP is "the Client" in the wording you gave, you aren't handcuffed from a contract with BC. But if "the Client" is defined more broadly elsewhere in the contract to include their clients, then you might have difficulty. You've not given us enough to know for sure, and we aren't lawyers anyway.

                That's the legal question as it pertains to you. But there may be restrictions on poaching in the contract between A and SP and/or the contract between SP and BC. So A may have recourse that would mess this up, anyway. Or A may be able to make a claim against SP who may be able to make a claim against BC.

                And even if there is none of that, A may be able to make enough noise to mess it up, even if there is no real legal recourse.

                Add to that the general business principle of not burning bridges if you don't have to. The agency will feel aggrieved if they only got 8 weeks of fees and then you go direct on a 6 month contract.

                In this situation, I'd be inclined to discuss with the agency, and say, "My contract keeps me from contracting directly with SP, but I can't see that it does with BC." If they claim it does, ask them to explain which clauses show that. If they seem to have a case, negotiate a fee. If they don't have a case, but express that it's unfair, blah, blah, maybe say, "Well, I understand why you feel that way, but the contract doesn't restrict me. But in the interests of good relationships, I'll pay you £1K for a signed release statement that you raise no objection to the contract." If their case is weak, maybe say, "That's a pretty weak case, but in the interests of good relationships..." and offer them £2K, or £3K.

                I certainly wouldn't offer them £50 / day, they aren't going to be doing anything to earn that kind of money. But I'd be more than willing to give them something to maintain the relationship, who knows when it will pay off for you? And by getting a signed release, you can take it to BC and say, "Sorted, let's get to work."

                Everything's negotiable, and giving the agent something is better for them than leaving them with nothing if you walk away from the contract because they wouldn't do business. Maybe they are stupid enough to refuse to do a deal, but few would be.

                Edit: Didn't see your latest before posting this. Why do you say this?
                Originally posted by Sub View Post
                Regardless of all above it seems that handcuff here is somehow enforceable
                Because they say so? They would, you know.

                It may make sense to "just pay" something, but if it isn't enforceable, not very much.
                Last edited by WordIsBond; 9 April 2016, 10:50.

                Comment


                  #9
                  Originally posted by WordIsBond View Post
                  Edit: Didn't see your latest before posting this. Why do you say this?

                  Because they say so? They would, you know.

                  It may make sense to "just pay" something, but if it isn't enforceable, not very much.
                  Even they will not be successful in their claims, the claim itself may be quite damaging for my relationship with BC. So if we can agree some reasonable sum, I will take it as business expense and if no, then there will be another opportunity to decide if I walk or prepare for legal with A.

                  Comment


                    #10
                    I would talk to the client first and see what clauses they have in contracts along the chain. I would even be prepared to show my contract if they had their own lawyer.

                    Then I would seek out my own lawyer if the client didn't have legal expertise and finally talk to the agency once I've established how enforceable my side thinks their handcuff clause is.

                    This is because without knowing the clients' involved, seeing your contract in full, the other contracts in full, knowing what the role is, etc no one can say "yes the agency would have a good case if they took it to court. "

                    In some cases the unenforceable of the clause rests on the actual clients involved while in others the wording along the chain is more important.

                    I know both contractors and permies who legally ignored handcuff clauses. The agency and their employer put up no fight once a legal opinion was sought by the person wanting to do the move, and handed to them to look into.
                    "You’re just a bad memory who doesn’t know when to go away" JR

                    Comment

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