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Non-solicitation of Client clause.

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    Non-solicitation of Client clause.

    Hi there.

    Here's the situation:

    I am a contractor working with my own ltd company for a large agency.
    My current contract is for a services company.
    I never goto this companies office I am based at home or on their own customers sites.
    One regular customer advertised a perminant role that I thought would be a great career move.
    This role was advertised to market, externally. The role is not the same role I am doing as part of my work with the services company, its a senior managment role.
    I applied, interviewed and have been transparent with thie company that has the role available.
    I got offered the job, subject to the clauses in my contract with the agency.

    I am keen for any input to allow me to escape this clause without paying the 20% fee to the agency.

    Could I just dissolve the ltd company and walk away?

    I've renamed the clause numbers and agency name to protect the innocent, they

    CONTRACT DETAILS:

    The "contractor" is me, by name.

    99. Non-solicitation of Client

    99.1 Throughout the Assignment Term and for a period of 6 months afterwards the Contractor will not and will procure
    that the Personnel will not, other than with the written consent of AGENCY X, provide services similar to
    the Services or any information technology related services in any capacity either directly or indirectly to:

    99.1.1 the Client;

    99.1.2 to any of the Client’s subsidiary or associate companies in respect of which it provided Services during
    the Assignment Term; and

    99.1.3 to any Customer of the Client with whom the Contractor has had direct dealings with (including in the
    provision of Services) during the Assignment.

    99.2 The Contractor shall not discourage the Client from dealing with AGENCY X.

    99.3 The Contractor acknowledges and agrees that:

    99.3.1 each of the sub-paragraphs contained in Clause 99.1 constitutes an entirely separate, severable and
    independent covenant and restriction, which may be enforced by AGENCY X;

    99.3.2 the duration, extent and application of each of the restrictions contained in Clause 99.1 are fair,
    reasonable and necessary for the protection of the goodwill and business interests of AGENCY X.

    99.4 In the event of a breach of clause 99.1 by the Contractor, a fee in the amount of 20% of the annual emoluments
    payable to the Contractor shall become immediately payable by the Contractor to AGENCY X. This fee
    represents a genuine pre-estimate of the loss that would be suffered by AGENCY X as a result of a breach of
    this clause.

    99.5 If before the first Assignment, during the course of an Assignment or within 6 months of the end of the Assignment
    the Client wishes to employ the Contractor or Personnel direct or through another employment business, the
    Contractor acknowledges that AGENCY X will be entitled to charge the Client a fee. In addition AGENCY X will be entitled to charge a fee to the Client if the Client introduces the Contractor/Personnel to a third
    party who subsequently engages the Contractor/Personnel.
    Last edited by NotAllThere; 20 October 2012, 15:51. Reason: Edited out the agency name

    #2
    What does your solicitor say?

    Comment


      #3
      I believe dissolving the company will not work for various reasons and means they can still take legal action against you. Whether they actually will is a different issue. Do they have the stomach for a legal fight?

      EDIT: didn't spot the line about your contract naming you by name? That means that disolving definately won't work and also you are probably screwed for IR35 as well. Did you not get it checked by QDOS or the like?
      Last edited by northernladuk; 19 October 2012, 11:15.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        ...

        Originally posted by wibbleman View Post
        Hi there.

        Here's the situation:

        I am a contractor working with my own ltd company for a large agency.
        My current contract is for a services company.
        I never goto this companies office I am based at home or on their own customers sites.
        One regular customer advertised a perminant role that I thought would be a great career move.
        This role was advertised to market, externally. The role is not the same role I am doing as part of my work with the services company, its a senior managment role.
        I applied, interviewed and have been transparent with thie company that has the role available.
        I got offered the job, subject to the clauses in my contract with the agency.

        I am keen for any input to allow me to escape this clause without paying the 20% fee to the agency.

        Could I just dissolve the ltd company and walk away?

        I've renamed the clause numbers and agency name to protect the innocent, they

        CONTRACT DETAILS:

        The "contractor" is me, by name.

        ....Stuff.....


        99.5 If before the first Assignment, during the course of an Assignment or within 6 months of the end of the Assignment
        the Client wishes to employ the Contractor or Personnel direct or through another employment business, the
        Contractor acknowledges that AGENCY X will be entitled to charge the Client a fee. In addition Agency X will be entitled to charge a fee to the Client if the Client introduces the Contractor/Personnel to a third
        party who subsequently engages the Contractor/Personnel.
        Didn't protect them too well did you?

        Do a search on restraint of trade, agency regs etc then compare the advice with the contract that you have signed.

        If the client is leaving you to resolve it with the agent it is up to you to do just that. Given that the client is aware of the obligations that you seem to be under, they are unlikely to just tell the agent to stuff it and risk being sued.
        Last edited by NotAllThere; 20 October 2012, 15:51. Reason: Removed agency name

        Comment


          #5
          I've switched to dealing directly in the past, by just doing it.

          It's not worth the agents time or money to contest this, and risk upsetting the client too.

          Comment


            #6
            Check the Opt in/out thread at the top of this forum as well. Your status may or may not affect the lenght of time for the restraint of trade.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by northernladuk View Post
              Check the Opt in/out thread at the top of this forum as well. Your status may or may not affect the lenght of time for the restraint of trade.
              Originally posted by northernladuk View Post
              I believe dissolving the company will not work for various reasons and means they can still take legal action against you. Whether they actually will is a different issue. Do they have the stomach for a legal fight?

              EDIT: didn't spot the line about your contract naming you by name? That means that disolving definately won't work and also you are probably screwed for IR35 as well. Did you not get it checked by QDOS or the like?

              I've just found this - the "contractor" is the ltd company...

              Contractor The limited company referred to in the Assignment Schedule who will perform the Services for the Client.

              Comment


                #8
                ....

                Originally posted by wibbleman View Post
                I've just found this - the "contractor" is the ltd company...

                Contractor The limited company referred to in the Assignment Schedule who will perform the Services for the Client.
                "99.1 Throughout the Assignment Term and for a period of 6 months afterwards the Contractor will not and will procure
                that the Personnel will not, other than with the written consent of AGENCY X, provide services similar to
                the Services or any information technology related services in any capacity either directly or indirectly to:"

                And the Contractor is responsible for and financially liable for the actions of the 'personnel' which is probably you at a guess.

                Comment


                  #9
                  Originally posted by tractor View Post
                  "99.1 Throughout the Assignment Term and for a period of 6 months afterwards the Contractor will not and will procure
                  that the Personnel will not, other than with the written consent of AGENCY X, provide services similar to
                  the Services or any information technology related services in any capacity either directly or indirectly to:"

                  And the Contractor is responsible for and financially liable for the actions of the 'personnel' which is probably you at a guess.
                  Seems fairly water tight then...

                  Comment


                    #10
                    Originally posted by tractor View Post
                    "99.1 Throughout the Assignment Term and for a period of 6 months afterwards the Contractor will not and will procure
                    that the Personnel will not, other than with the written consent of AGENCY X, provide services similar to
                    the Services or any information technology related services in any capacity either directly or indirectly to:"

                    And the Contractor is responsible for and financially liable for the actions of the 'personnel' which is probably you at a guess.
                    But if Contractor is the WibbleCo Ltd and Wibbleman is no longer a Director or employee there is very little that WibbleCo can do to stop Wibbleman going direct.

                    I helped a friend in a similar situation. Agency basically withheld payment for last few invoices and said they were keeping the money due to breach of contract. They sent a few "scary" letters via solicitor. We sent one back outlining our case and invoking late payments charges for the overdue invoices and they paid in full (with late payment charges) a couple of days later.

                    A couple of questions:

                    1. Are you opted out of the Agency Regulations?

                    2. Will you be terminating your contract early to move positions or will you be doing it at natural termination point of contract?

                    Comment

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