Agency contract clause

**TheFaQQer** · 28 January 2008, 15:42

Yes.

This is contract law rather than employment law, so it could be held as a reasonable restriction. If they EB could prove that they have suffered a consequential loss, then they could sue your company and win.

I'd also be surprised if there was nothing even more restrictive in the contract between EB and client that allows them to go after the client as well.

**oracleslave** · 28 January 2008, 15:44

Originally posted by Emily View Post

Hi,
Can anyone advise on how enforceable restriction clauses are on Agency contracts?

Scenario:
Contractor works through agency for client for a couple of years. Poor service.
Restriction clause says he cannot work for the client directly or indirectly within 6 months of said contract ending
Contractor's agreement comes to an end - client asks another company to act as the contractor's agent for a new contract

Are Agency's able to enforce this clause, bearing in mind they were not offering him further work with the client and thus by enforcing this clause they will be restricting his right to work?!

I thought as someone who was once a recruiter you would know the answer to this or are you just trolling?

http://forums.contractoruk.com/busin...tml#post414119

**Ardesco** · 28 January 2008, 15:55

Are you opted in or opted out of the Conduct of the Employment Agencies and Employment Businesses Regulations 2003?

If you are opted in they cannot enforce the handcuff clause, If you have opted out they can enforce it and will.

**Emily** · 28 January 2008, 16:21

Originally posted by oracleslave View Post

I thought as someone who was once a recruiter you would know the answer to this or are you just trolling?

http://forums.contractoruk.com/busin...tml#post414119

Indeed I was a recruiter, not come across this before though, I wasn't too involved in this side of things. The company I worked for used to sue anything that moved - nice! but I never saw any action against a candidate breaching a restrictive covenant. I work for an IT Company now and we are looking to take on a contractor for a project with a particular client, problem is that he worked for the client through an agency until fairly recently and he has this 6 month restriction.
It's so annoying because the agency didn't offer him any more work, and we have the work for him but may not be able to use him.

**Ardesco** · 28 January 2008, 16:26

Originally posted by Emily View Post

It's so annoying because the agency didn't offer him any more work, and we have the work for him but may not be able to use him.

Tell them to offer him the work then. I would be shocked if an agency refused to supply somebody for a gig, they get money that way....

**oracleslave** · 28 January 2008, 16:29

Originally posted by Emily View Post

Indeed I was a recruiter, not come across this before though, I wasn't too involved in this side of things. The company I worked for used to sue anything that moved - nice! but I never saw any action against a candidate breaching a restrictive covenant. I work for an IT Company now and we are looking to take on a contractor for a project with a particular client, problem is that he worked for the client through an agency until fairly recently and he has this 6 month restriction.
It's so annoying because the agency didn't offer him any more work, and we have the work for him but may not be able to use him.

I was pursued by an agency when in a similar situation to this. After the exchange of a number of legal letters the agency went away (well they have for now but I think it's 6 years before they have no further recourse) as they had soured the relationship with the end client to such a degree there was no chance of them getting any further work there and thus their "loss of revenue" argument was moot. If you want the contractor badly enough it would probably be best to get his contract reviewed by a lawyer to be on the safe side. In addition there is every possibility of the agency pursuing the end client as well.

**Emily** · 28 January 2008, 16:35

Originally posted by oracleslave View Post

If you want the contractor badly enough it would probably be best to get his contract reviewed by a lawyer to be on the safe side. In addition there is every possibility of the agency pursuing the end client as well.

I've just instructed our legal beavers to come up with a gameplan. If there are any decent options, I will let you all know.
Yeah, really do not want the end client getting sued - that's no good for anyone. Although, I beleive their contract simply says they cannot take the guy on direct, but says nothing about him going via another third party. So we may be safe on that side of things.

Thanks guys, will let you know how it turns out.

**DodgyAgent** · 28 January 2008, 17:14

I have yet to see any agency successfully sue a contractor for this. Many threaten but to be honest all they can sue for is loss of margin, and over 6 months they will be advised that it becomes restriction of trade.

**TheFaQQer** · 28 January 2008, 17:31

One EB I was dealing with told me at one stage "we'll be annoyed if you go direct, but at the end of the day, we'll need you at some stage in the future so will wish you the best of luck". I know a couple of people who did this, and true to his word, they were wished the best of luck.

(It was strange that both sets of brakes failed at the same time though....)

Agency contract clause