What is Agency Restrictive Covenant?

[xyz]

I am coming to the end of my first contract with very a large banking institution. I'm looking for my next contract and am applying away. A different agency from the one I'm with now have a vacancy with the same large banking institution but have told me that they cannot consider me for the role as Agency Restrictive Covenant prevents me from returning to the same insitution but with a different agency?

I've never heard of this. What is it all about?

Most of the contracting jobs around here are with this same large banking institution but I don't want to be beholden to one agency for years on end.

Is there any way round it?

Thanks

[AlfredJPruffock]

I am coming to the end of my first contract with very a large banking institution. I'm looking for my next contract and am applying away. A different agency from the one I'm with now have a vacancy with the same large banking institution but have told me that they cannot consider me for the role as Agency Restrictive Covenant prevents me from returning to the same insitution but with a different agency?

I've never heard of this. What is it all about?

Most of the contracting jobs around here are with this same large banking institution but I don't want to be beholden to one agency for years on end.

Is there any way round it?

Thanks

Offer the new agent a cash incentive to turn a blind eye, that will work.

[Not So Wise]

Never heard that exact phrase but at a guess he is talking about the T&C's in your contract with agency and client's contract with agency also.

There is normally something in there to prevent someone basiclly just cutting the agency out of the deal come extension time (or even mid contract) by basiclly saying the contractor cannot return to work for the client direct (or though another agency) for X amount of time after contract termination. Sure can be idiotic with large multinationals where two sections of the same company might not even know the other exists but they still do come under the same header and what one signs binds the other.

The duration of time lock out clause can vary, check your contract and check your opt in/out status. But no matter what expect to find the 2nd agency is correct and that you cannot just go from one role to another with the same company and change agency at same time.

Only real ways to solve it would be either buy off the first agency (client unlike to risk litigation even if you are, so just going for it and hoping first agency will not find out is not really an option) or to screw the 2nd by informing the first of the position (if you know where job is and who they contract)

Neither really recommended

[XLMonkey]

Legally, your company is in a bind, as the first agency almost certainly has clauses restricting the company from accepting another contract at the same client. Your options are (v. broadly)

- Tell your current agent and get them to offer you for the position (follows the strict rules of the contract you have, but potentially pissing off the second agent)
- Go with the second agent and hope that the first doesn't find out (pretty high risk, as the grapevine on these things is usually too good to beat)
- miss the opportunity

or

set up a new company use that for the new contract. The new company is not bound by the Restrictive Covenant. The only question that then remains is whether you as an employee of your original company are bound by the covenant. On this point, you would need to get some advice specific to your situation, but there are some on-line resources that will help you understand the issues, e.g.

http://www.oneclickhr.com/hrguide/ar...146&section=31
is simple and easy to understand, but written for US employment law

http://www.industriallawsociety.org.uk/papers/gould.htm
is not simple or easy to understand, but written for UK law and v. comprehensive.

From what you've said - provided that the new contract is not related to your current contract, then it is unlikely that the agency could make a case either against the new company or you individually, but you would really need to take specialist advice on your circumstances before doing this.

[boredsenseless]

Legally, your company is in a bind, as the first agency almost certainly has clauses restricting the company from accepting another contract at the same client. Your options are (v. broadly)

- Tell your current agent and get them to offer you for the position (follows the strict rules of the contract you have, but potentially pissing off the second agent)
- Go with the second agent and hope that the first doesn't find out (pretty high risk, as the grapevine on these things is usually too good to beat)
- miss the opportunity

or

set up a new company use that for the new contract. The new company is not bound by the Restrictive Covenant. The only question that then remains is whether you as an employee of your original company are bound by the covenant. On this point, you would need to get some advice specific to your situation, but there are some on-line resources that will help you understand the issues, e.g.

http://www.oneclickhr.com/hrguide/ar...146&section=31
is simple and easy to understand, but written for US employment law

http://www.industriallawsociety.org.uk/papers/gould.htm
is not simple or easy to understand, but written for UK law and v. comprehensive.

From what you've said - provided that the new contract is not related to your current contract, then it is unlikely that the agency could make a case either against the new company or you individually, but you would really need to take specialist advice on your circumstances before doing this.

Most of these contracts now pass the restrictions on to the directors of the company personally as well so you'd have to set up a new company but not as a director if this is the case, or go umbrella

[xyz]

Thanks for all your help guys.

Think I'll just have to bypass this opportunity for just now. I can't find out exactly which department it's in so no chance of feeding it to my current agency.

There's more to this contracting malarky than meets the eye!

[XLMonkey]

Most of these contracts now pass the restrictions on to the directors of the company personally as well so you'd have to set up a new company but not as a director if this is the case, or go umbrella

Yes and no... You're absolutely right that the contracts pass the restrictions on to the directors, but that does not mean that these restrictions are enforceable.

The reason is that the courts generally regard clauses that restrain the right of an individual to go about their business as being unfair and illegal. Unless the complainant (in this case, the agent) can show a demonstrable loss to their business, they tend to rule that the restraint clause is unreasonable and strike it from the contract. If the agent wasn't involved in tendering for the other contract, then they will struggle to show demonstrable loss.

That's what the long and rather tedious legal case I linked to was all about.

So, although the company can't enter into the new contract, the individual often can.

...as with all these things, do your own research and so forth. Employment and restrictive trade law is a, scuse the pun, law unto itself....

[Not So Wise]

Yes and no... You're absolutely right that the contracts pass the restrictions on to the directors, but that does not mean that these restrictions are enforceable.
....

While legally it is debateable if such restrictions are enforceable, at the end of the day that has little to do with anything because main problem is not that the contractor has to take the risk but the client has to as welll and unless the contractor is something like only 1 of 3 people in the country capable of doing the job (and other 2 are engaged) it quite simply is not worth the risk/hassle to the client.

Many clause's in contracts of all types are unenforceable or maybe even totally invalid but unless the benefit of breaking them outweighs the potencial hassle/risk of a court case (even if you are garanteed a win there will still be cost and hassle) majority will comply with them because of that alone...and thats why the lawyers put them in.