Transfer Restrictions

[pelican1]

Until last Oct, I had a contract with a client via DataSource Computer employment. When the contract expired I started a new contract with a different agency. However, I've just received a solicitor's letter and invoice for DataSource's supposed loss of earnings because I went with the new agency. My contract did have a Transfer Restriction clause indicating that I should not take a new contract for the same or similar work with the client for up to 6mths after contract completion. However, the role I am now doing is different to the original contract and is one that DataSource could not have put me into, so I'm more than a little bemused about what is going on. All the more because I've long heard that such clauses are a restriction of trade and non-enforceable anyway (at least that's what DataSource told me when they tried to poach me in the first place!). Appreciate any comments on this.
Cheers

[NickNick]

What to do indeed

I've had one of these letters when i was in a very similar situation to you and I jsut ignored it and it went away. A colleague did the same with his and is currently in the courts over a €150K invoice fro the old agency.

It's an area that is a bit grey and depending on who you talk to, you'll get different answers. If it were me, and it's not, I'd leave it till the next letter (if one appears) before contacting a solicitor and preparing to cough up.

But, this isn't me, and i'm not a legal expert.
NN

[oracleslave]

How much was the invoice for i.e. how worth their while is it going to be for them to pursue this to the end?

[XLMonkey]

unfortunately, it looks like you have been badly advised (particularly by DataSource).

Restriction of trade clauses are difficult to enforce on an individual who is moving from one employer to another (e.g. Joe moves from working for Accenture to working for CSC, and then delivers services to the same end client). The courts don't generally think its fair to restrict someone's right to earn a living.

However, they are generally enforceable on a company. The courts think a company should be able look after itself (or go bust trying).

I assume that you were not a permie for the original client? In which case, the odds are reasonably high that DataSource have a case against yourco (or the umbrella that you are operating through).

You would be well advised to get some legal advice on it before doing anything else. I also know a few people who have come unstuck on this, to their cost.

[Ardesco]

Were you opted in with your original contract. If so they can't enforce a handcuff clause. A quick phone call to remind them of thier faux pas will should sort everything out if this is the case.

[NotAllThere]

Was the original restrictive contract with your personally or with your company? Likewise, who is the letter threatening - you or your company?

...My contract did have a Transfer Restriction clause indicating that I should not take a new contract for the same or similar work with the client for up to 6mths after contract completion...

Would it be obvious that the new work is not the "same or similar"?

and is one that DataSource could not have put me into,

How exactly did you get it? Was it in someway connected with you already being at the client?

[oracleslave]

Restriction of trade clauses are difficult to enforce on an individual who is moving from one employer to another (e.g. Joe moves from working for Accenture to working for CSC, and then delivers services to the same end client). The courts don't generally think its fair to restrict someone's right to earn a living.

Presuming the OP has a Ltd company and a contract with an Agency could you not use this argument if you substitute Accenture and CSC with the 2 agencies and the end client being the same?

[NotAllThere]

Were you opted in with your original contract. If so they can't enforce a handcuff clause. A quick phone call to remind them of thier faux pas will should sort everything out if this is the case.

Who is it who regularly contends that 99.99% of us are opted in, since you can't choose to opt out once you've met the client, or suchwise?

[XLMonkey]

Presuming the OP has a Ltd company and a contract with an Agency could you not use this argument if you substitute Accenture and CSC with the 2 agencies and the end client being the same?

you could - which is rather the point. Accenture could sue CSC for damages if Joe moved from one to the other (assuming that there was ever a contract between Accenture and CSC that had a restraint clause in it). The courts would see that as a contract between two companies that should know better.

However, Accenture couldn't sue Joe personally, since that would be a restraint of his right to earn a living.

The problem with one-person contracting companies is that you and yourco are a lot more difficult to separate than CSC and Joe!

[Ardesco]

Who is it who regularly contends that 99.99% of us are opted in, since you can't choose to opt out once you've met the client, or suchwise?

Well it would be me regulary saying that you can't opt out once you have met the client, I don't think I have ever said that 99.99% of us are opted in though. I'm sure a lot of people have opted out by checking the out box when they applied for a gig and there will be some agents who have a clue.

This being said there are also a hell of a lot of poeple who haven't specifically opted out, if the OP is one of these people he can use it as a get out of jail free card in this case.