Handcuff clause

[limiteddeveloper]

I've been approached by a client who I was working for 4 month ago, with the offer a new contract. I was previously terminated since they projects I was working on simply finished.

My contract with the agent had a non-solicitation clause for 12 months.

I did sign an opt out form, but this was after I'd met the client and had been offered the contract (although I am not 100% sure if I agreed to opt out via phone or email previously).

I'm now in a dilemma as to whether the client and I should approach the agent and inform them, or whether I should be contracting directly for the client. I've been able to negotiate a better rate with the client, but this is dependant on me contracting directly.

The client believe that the contract they have with the agent allows them to bypass them after a set period of time (which I passed the first time I was with them). They have left it up to me as to whether we go through the agent or not.

I can't help but begrudge giving the agent a cut for doing nothing since the contract was terminated. I'm wondering where I stand legally, and if the agency find out / remember the dates (from future cv's), what they could try to do, whether they are likely to succeed.

Thanks.

[SueEllen]

Firstly it depends on the exact wording of the handcuff clause.

However generally if you don't want to play by the rules then you and the client can just do business and ignore the agency. This will work as long as there is no chance of the agent finding out i.e. they don't have other contractors on-site with big mouths, they don't visit the client in person.

I know people who done this with the clients blessing and the agent never got wind. Though there is a risk of you getting caught and threatened by the agent with legal action unless you stop working regardless of the legality of the contract and opt-out you sign.

If you want to play by the rules then get a solicitor to send a politely worded letter to the agent informing the agent that the contract term is unenforceable, the opt-out is invalid, and if they act to your detriment in any way you will take them to court.

In future when you deal with agents don't sign the opt-out (there are ways to get around this) and get contract clauses you don't like rewritten before you agree to the contract and start on-site. If you don't have the legal training to rewrite them yourself then pay a solicitor to do it. The solicitors I've dealt with are very happy to tell the agents with badly worded contracts that terms are being changed as those agents tend to be the ones who are too mean and too cheap to hire a solicitor.

[limiteddeveloper]

Thanks for the great reply. It's very unlikely that the agent will find out, since there is only one other contractor on-site. If they do then I suppose it's down to luck as to how likely the agent is to pursue it.

I'll have to take more care with contract negotiations in the future, I fell for the BS regarding opting-in and IR35. From reading these forums recently there is a lot more scope for changing terms of a contract than I originally thought. I just need to get better at negotiating!

Have many others been in a similar situation / heard of agents pursuing this?

[pmeswani]

Thanks for the great reply. It's very unlikely that the agent will find out, since there is only one other contractor on-site. If they do then I suppose it's down to luck as to how likely the agent is to pursue it.

I'll have to take more care with contract negotiations in the future, I fell for the BS regarding opting-in and IR35. From reading these forums recently there is a lot more scope for changing terms of a contract than I originally thought. I just need to get better at negotiating!

Have many others been in a similar situation / heard of agents pursuing this?

Just out of interest, did you opt out before or after you were introduced to the client? If after, on your CV and LinkedIn profile, can you get away with saying Private Company?

[limiteddeveloper]

Just out of interest, did you opt out before or after you were introduced to the client? If after, on your CV and LinkedIn profile, can you get away with saying Private Company?

I think it was after I'd been offered the role and was signing the ontract. That's the only record I have of opting out in writing. I think saying 'Private Company' is a good idea, at least in the short-term.

[pmeswani]

I think it was after I'd been offered the role and was signing the ontract. That's the only record I have of opting out in writing. I think saying 'Private Company' is a good idea, at least in the short-term.

Unless I am mistaken, if you have been introduced to the customer prior to opting out, then you are opted in. From what I understand, opting out after being introduced is not worth the paper it is signed on. If I am wrong, then I apologise.

[Wanderer]

The client believe that the contract they have with the agent allows them to bypass them after a set period of time (which I passed the first time I was with them). They have left it up to me as to whether we go through the agent or not.

How much value will the agency add to the business deal? None.
How much value will the agency take away? About 15% of your contract value!

The client is willing to do it which is the deciding factor so it's a no brainer - cut out the agency.

If they ever come after you with some bluff and bluster then tell them straight up that you are bringing the client into the dispute and watch them backtrack for fear of alienating a client. If it ever gets that far, tell them you will see them in court where you can argue the opt out was invalid and restraint of trade.

[limiteddeveloper]

How much value will the agency add to the business deal? None.
How much value will the agency take away? About 15% of your contract value!

The client is willing to do it which is the deciding factor so it's a no brainer - cut out the agency.

If they ever come after you with some bluff and bluster then tell them straight up that you are bringing the client into the dispute and watch them backtrack for fear of alienating a client. If it ever gets that far, tell them you will see them in court where you can argue the opt out was invalid and restraint of trade.

Great. Thanks for the advice all. It's good to have a come back IF the agent ever finds out and decides to kick up a fuss.

[AussieDigger]

if the client approached you, make them aware of the conflict and handcuff clause and then make it their issue to sort if they want to. At the end of the day, if the agent tries anything on, they risk not getting further business with the client.

[SeekingIT]

Excellent!!!

How much value will the agency add to the business deal? None.
How much value will the agency take away? About 15% of your contract value!

The client is willing to do it which is the deciding factor so it's a no brainer - cut out the agency.

If they ever come after you with some bluff and bluster then tell them straight up that you are bringing the client into the dispute and watch them backtrack for fear of alienating a client. If it ever gets that far, tell them you will see them in court where you can argue the opt out was invalid and restraint of trade.

Well Said That Man!!!