Restrictive Covenant ... more on this.

[Fred Bloggs]

Think a little laterally. You have no income right now but the client wants the work doing and the agency wants his margin. Lets say the marging is 10%. Tell the client you want (say) £350 a day to do the job. Then agree with the agency that you'll pay them their 10% out of what you get, so they get their £35 a day. OK, they may not agree, but everyone wins with this, don't they? Going down the legal route is the last thing you want to do. Good luck.

[SueEllen]

Think a little laterally. You have no income right now but the client wants the work doing and the agency wants his margin. Lets say the marging is 10%. Tell the client you want (say) £350 a day to do the job. Then agree with the agency that you'll pay them their 10% out of what you get, so they get their £35 a day. OK, they may not agree, but everyone wins with this, don't they? Going down the legal route is the last thing you want to do. Good luck.

Actually it's not a case of suing the agency it's simply telling them that their clause can't be enforced due to it's scope.

It's always better to do these negotiations before you take on a contract. As you can simply get your solicitor to tell them with a restrain of trade clause you can leave it like that but my client will ignore it totally.

However in suewood27 case she hasn't stated what the end-client has agreed with the agency. So if the end-client has a handcuff clause as well prohibiting them from hiring people for a time period as well, there is little she can do even if she tells the agency they can't enforce the clause on her side.

[rd409]

This can be impossbile to enforce if you are working through a limited company. The contract that the agency has is with ltd company, and it does not mention anywhere the contractor's name (this is true atleast in my case, as I only put my name as director of the ltd Company). So the ltd company cannot supply resources directly to the client bypassing the agency. But what is to stop another ltd company to supply the same contractor to the client?

I can surely get a mate to sign a contract with the client directly through their ltd company and pay you. I am sure this is workable.

HTH.

[Fred Bloggs]

Actually it's not a case of suing the agency it's simply telling them that their clause can't be enforced due to it's scope.

It's always better to do these negotiations before you take on a contract. As you can simply get your solicitor to tell them with a restrain of trade clause you can leave it like that but my client will ignore it totally.

However in suewood27 case she hasn't stated what the end-client has agreed with the agency. So if the end-client has a handcuff clause as well prohibiting them from hiring people for a time period as well, there is little she can do even if she tells the agency they can't enforce the clause on her side.

That's why I suggest that in the last resort, the compromise I outlined might just work in everyone's favour.

[suewood27]

This is how the contract reads ..... (my Ltd Co named as the service provider and me named as the Consultant)


2. SERVICE PROVIDER'S OBLIGATIONS
The Service Provider shall:
....
2.# procure that the Consultant shall comply with the provisions of Clauses 2, 4, 5, 6, 7, 8 and 12 as if the Consultant were a party to this Agreement in place of the Service Provider.


7 PROTECTION OF ABC’S BUSINESS
7.1 The Service Provider shall not alone or jointly with another or others in any capacity and whether or not for its benefit and whether directly or indirectly:
7.1.1 either during the term of this Agreement or for a period of twelve calendar months after the date of termination or expiry of this Agreement:
7.1.1.1 enter into (or approach with a view to entering into) a similar contract of service or for services with:
(a) the Client; or
(b) any member of the Client’s Group; or
(c) any other person for whom, or with whom, the Service Provider and/or the Consultant had material contact in the course of its, his or their supply of the Services at any time either in the six months prior to such termination or expiry or during the term of this Agreement if such term is a period of less than six months;
1.1.1.2 induce (or seek to induce) the Client to engage the services of any other person in competition with ABC;
1.1.1.3 canvass, solicit or seek to entice away the business of the Client from ABC;
1.1.1.4 deal with or accept any instructions from the Client or any member of the Client's Group other than in connection with the performance of the Services;
1.1.1.5 introduce or provide the services of any third party to the Client or any member of the Client's Group other than via ABC; or
1.1.1.6 induce (or seek to induce) to leave or cease performing service(s) for any member of ABC’s Group or of the Client’s Group, any contractor or employee of any member of ABC’s Group or of the Client’s Group with which or whom the Service Provider or the Consultant had material contact in the course of its, his or their supply of the Services at any time either in the six months prior to such termination or expiry or during the term of this Agreement if such term is a period of less than six months;


(numbering has gone ascew but you get the drift)

So that rules out me working through another Ltd Co. As I understand it, the client contract states the same 12 month period for sourcing me as a resource outside of the agency (I haven't seen the client contract).

I'm not out to do anything illegal or contrary to a contract that I have signed ... and I agree that I'm at fault for signing up for this in the first place. The reason for my post (or rant as some would call it) was to see what other's opinions were, and maybe highlight the issues to others entering into contracts for the first time.

I would like to think that court would rule the clause (particularly 7.1.1.1 (c)) is unreasonable.

Is it worth pursuing the legal path?? I'm not sure of that.
Is it worth taking note to make sure I don't end up in the same predicament again? YES.
Would I ever work for or recommend the agent again? ABSOLUTELY NOT.


Thanks to all who posted here .. your advice and your opinions are invaluable.

[b0redom]

I may have missed this, but you didn't answer if you have opted out before being introduced to the client? Assuming you didn't the agency doesn't have a leg to stand on anyway as far as you're concerned.

The client may have handcuff clauses, but that's for them to sort out.

[suewood27]

I may have missed this, but you didn't answer if you have opted out before being introduced to the client? Assuming you didn't the agency doesn't have a leg to stand on anyway as far as you're concerned.

The client may have handcuff clauses, but that's for them to sort out.

You know that's a really hard one to answer ... I had interviewed with this client six months prior to this contract starting, the interview was for a different role (and through a different agent), I was offered but, for various reasons, I turned it down and chose to stay where I was.

Six months later when I was put forward for this contract the agent didn't tell me who the client was (typical of most agents), so when the client saw my CV they recognised it, remembered me from the previous interview and hired without the need for another interview.

The opt-out notice was signed before I started the contract though ....

[SueEllen]

You know that's a really hard one to answer ... I had interviewed with this client six months prior to this contract starting, the interview was for a different role (and through a different agent), I was offered but, for various reasons, I turned it down and chose to stay where I was.

Six months later when I was put forward for this contract the agent didn't tell me who the client was (typical of most agents), so when the client saw my CV they recognised it, remembered me from the previous interview and hired without the need for another interview.

The opt-out notice was signed before I started the contract though ....

Then it's worth asking a lawyer if you are opted-in or out.

I know from others I've worked with if they client knows them anyway, they ask for restrictive clauses to be removed.

I think one thing you are learning is to read, ask questions and then negotiate your contracts properly before signing them.

[TykeMerc]

Name me one business reason why the agency shouldn't enforce this clause - not from your perspective, but from theres.

From the agencies perspective they're prevented from getting further work and earning opportunities in the future because of a client restriction on external hires via agencies. It would make far better business sense for them to step aside in this case (as they won't be asked to fill the role anyway) and gain a feather in their cap by being cooperative. That feather may pay off when the clients restriction is lifted.
Either way they won't earn a bean from this opportunity, the only plus the agency can gain is client goodwill, by blocking the client and contractor they just annoy both and risk being dropped from the client PSL.

[The Agents View]

From the agencies perspective they're prevented from getting further work and earning opportunities in the future because of a client restriction on external hires via agencies. It would make far better business sense for them to step aside in this case (as they won't be asked to fill the role anyway) and gain a feather in their cap by being cooperative. That feather may pay off when the clients restriction is lifted.
Either way they won't earn a bean from this opportunity, the only plus the agency can gain is client goodwill, by blocking the client and contractor they just annoy both and risk being dropped from the client PSL.

1, There's ALWAYS a way past a PSL - it's a PREFERRED suppliers list, not an exclusive.
2, Point taken re: goodwill, and this IS important, but in equal measures, so is standing up for your business. Which one will stand you in good stead? well that's a close call - if you roll over, the individuals will expect you to do it again and again - if you don't, you're obstructive.
3, The agent should be earning from this - there's no two ways about it. If the client can't engage the resource, then they can't have the contractor - it really is that simple.
4, Go back to the annalogy of a supermarket. They won't sell you an item at cost, just because your wife says that the shopping budget is a bit tight this month - it's the same thing - you want something, you have to pay for it - negotiate by all means, but have more ammunition than "oooh moneys a bit tight".
5, The OP SIGNED THE CONTRACT - there's no "unreasonable" clauses in there - THE CONTRACT IS SIGNED, AND THEREFORE AGREED - it's not like they've changed it and not told the OP - that's the contract!!