Handcuff clause again

[willwander]

Here is what I'm being asked to sign...

"Neither the service provider and its directors or consultants shall enter into any agreement to supply services of a similar nature to the client or a subsidiary or associated company of the client or to the clients client or the clients customers for a period of 12 months.......otherwise a contract violation fine equivalent to 12 weeks worth of fees...."

Since i'm contracting for a large supplier whose client is the uk govenment (NHS) as far as i can see that rules out pretty almost every company in the country.

Anyone got suggestions on a 'reasonable' handcuff for both parties?

[Turion]

They just don't want you ditching them to go direct with the client or the end client. The end client being the NHS. It's standard stuff. I'd worry more about not working now, than the slim possibility that a virtually unenforceable clause (restriction on trade) would possibly prevent me from working in the next year.

[HeliCraig]

At a recent meeting with senior management at ClientCo recently a somewhat "newbie" contractor asked why his contract had a Handcuff clause which prevented him working for the same ClientCo through another provider...

... although he didn't realise it was a handcuff clause, and was generally a bit inept! The reason he was asking is that ClientCo has a new favourite provider of "services" and some new projects they have been "given" sound interesting.

Anyway, interesting was ClientCo's CIO's reply: "Move, you work for yourself. They won't sue you - its not worth their effort."

Interesting point of view! Wonder if any single contractor has ever actually been successfully sued for breaking a Handcuff clause??

[The Agents View]

7 times in the last 5 months we've found our contractors on site with the original client - they just let the contract lapse, then took them direct.

This was all seperate incidents with the same client....the total charge for trying to cut the agency out? £180,000....in one invoice - paid in full.

Sadly nothing to do with me - agents get paid on fee's gained from sueing clients too ya know

[The Agents View]

Oh and 12 months is unreasonable - 6 months is most common. Is the agent PCG approved?? I thought 6 months was standard in the contracts - unless its changed since ours were approved?

[Another Dodgy Agent]

At a recent meeting with senior management at ClientCo recently a somewhat "newbie" contractor asked why his contract had a Handcuff clause which prevented him working for the same ClientCo through another provider...

... although he didn't realise it was a handcuff clause, and was generally a bit inept! The reason he was asking is that ClientCo has a new favourite provider of "services" and some new projects they have been "given" sound interesting.

Anyway, interesting was ClientCo's CIO's reply: "Move, you work for yourself. They won't sue you - its not worth their effort."

Interesting point of view! Wonder if any single contractor has ever actually been successfully sued for breaking a Handcuff clause??

Hmm, CIO clearly not been contracting recently. Trust me an agency will chase down a Ltd Co for losses if needs be, we've done it twice in the last 4 years, we are after all a business.

[SueEllen]

Here is what I'm being asked to sign...

"Neither the service provider and its directors or consultants shall enter into any agreement to supply services of a similar nature to the client or a subsidiary or associated company of the client or to the clients client or the clients customers for a period of 12 months.......otherwise a contract violation fine equivalent to 12 weeks worth of fees...."

Since i'm contracting for a large supplier whose client is the uk govenment (NHS) as far as i can see that rules out pretty almost every company in the country.

Anyone got suggestions on a 'reasonable' handcuff for both parties?

Best to leave it in because the clause is unenforceable if you use your common sense and don't work for exactly the same part of the NHS in the same location.

Just make sure you have legal insurance cover so if you are threatened you can answer back telling them you are happy to go to court.

If it goes to court the judge may do the pen test and strike out the unreasonable parts of the clause meaning the points the agent are fighting on can't be enforced and if you are lucky even more.

[Another Dodgy Agent]

Best to leave it in because the clause is unenforceable if you use your common sense and don't work for exactly the same part of the NHS in the same location.

Just make sure you have legal insurance cover so if you are threatened you can answer back telling them you are happy to go to court.

If it goes to court the judge may do the pen test and strike out the unreasonable parts of the clause meaning the points the agent are fighting on can't be enforced and if you are lucky even more.

Well it's a thought isn't it. In actual reality the clause is very much enforceable otherwise it wouldn't be in there.

Think about it, what would be the point of writing huge, boring contracts, with multiple clauses and extants if they did not in some way inhibit or by voalition create control over the person(s) involved.

As for the "pen test" I have witnessed that on two occasions and it went badly for the defendant's. What you have to bare in mid is if you sign the contract you are beholden to it, if you don't then I guess you forgo the gig.

[SueEllen]

Well it's a thought isn't it. In actual reality the clause is very much enforceable otherwise it wouldn't be in there.

Your an agent not a lawyer.

I am lucky enough to have access to contract lawyers and on occasions barristers.

The basic premise is that if you want a contact to be enforceable you make sure it covers exactly what you want it to restrict and no more.

In the case of the NHS which covers virtually every bit of healthcare in the UK writing such a wide clause means it's unenforceable as it doesn't distinguish doing work for a hospital trust or a website for a dentist who does NHS work.

Think about it, what would be the point of writing huge, boring contracts, with multiple clauses and extants if they did not in some way inhibit or by voalition create control over the person(s) involved.

Companies do it all the time. Mainly large companies and agents.

Smaller companies if they do a bit of research tend to make their clauses so they are legally enforceable. It's as hard as rocket science to work out what you need to do.

As for the "pen test" I have witnessed that on two occasions and it went badly for the defendant's. What you have to bare in mid is if you sign the contract you are beholden to it, if you don't then I guess you forgo the gig.

A company that has one or two locations can easily enforce a clause like that. Companies or organisations that have lots of clients, suppliers, ways of working and covers the entire UK can't easily enforce a clause like that.

To put it bluntly the OP clause as it stands states they can't work in healthcare in the UK for 12 months after leaving the contract as anyone they work for will have links with the NHS. Bit of a restriction of trade don't you think particularly if they have specialist skills only applicable to healthcare.

Oh and some company tried this on me with their lawyers. They backed down when I pointed this out. I didn't even have to get a lawyer involved.

[Ardesco]

Well it's a thought isn't it. In actual reality the clause is very much enforceable otherwise it wouldn't be in there.

Think about it, what would be the point of writing huge, boring contracts, with multiple clauses and extants if they did not in some way inhibit or by voalition create control over the person(s) involved.

As for the "pen test" I have witnessed that on two occasions and it went badly for the defendant's. What you have to bare in mid is if you sign the contract you are beholden to it, if you don't then I guess you forgo the gig.

The point is to scare people into thinking it is a clause that is enforcible. A 12 month handcuff clause is never enforcible, a 6 month is dodgy ground and 3 months is acceptable. Then you take into account the other terms of the clause and most of the time that makes it unenforcible as well.

The number of time agents have given me contracts with terms that are not enforcible is much higher than you would think.