Restrictive covenant - working for third party clients

[Wanderer]

The 50% thing was in the small print on page 4/5 of their contract, under a limitations section. I did think at the time it was excessive, but I felt it was a chicken and egg thing where by I could not get the contract unless I signed up for it, I also missed the 3rd party bit.

Actually that's probably pretty good for you. If the amount represented a realistic pre-estimate of loss of margin that would occur in the event that you breached the covenant, then they may have a case. Since it's an outlandish amount (unless they were actually taking a 50% margin!) it's probably not going to stand up in court.

You might want to get legal advice on that but I think most of us would just ignore the agent. By the way, DO NOT make any offer to settle with the agent without taking legal advice either.

[beachcomber]

I wouldn't say you have. Most contractors don't know what Opt in/out means and just do as told so can't be blamed for that. An expensive lesson unfortunately but this is pretty rare hence most people not being bothered about opt in/out. If this happened a bit more often then everyone would be much more aware of it.

The fact you signed the opt out AFTER you have been given the role means it is invalid which is great(ish) news for you. The handcuff is now virtually worthless. You can only be tied to 14 weeks after start or 8 weeks after end of contract.

Details are...



As quoted from this page...

Opt-in, opt-out?Legal specialist Egos comments :: Contractor UK

Send this to the agent and point out the author is Roger Sinclair from Ergos who is a contract specialist.

So you have a couple of outs here...

Fight the agency and point out their handcuff is invalid as they have no further business with the client and start with your client immediately..

or point out the Opt Out is invalid as you had started and have 8 weeks off before starting with your client again.

Could you clarify the 14 / 8 weeks split please?

My original contract here started the day after the august bank holiday.

I had trouble with my home PC so I was only able to print/sign/scan/send my contract and opt out etc back to them at about lunchtime on my first day. Checking my gmail confirms this.

Does this mean that because my contract has been running since that date (even although this is my 3rd or 4th stint here, I have only ever signed the original contract, and they've gotten me to sign extension notices to the original contract) that I would be free to move without fear of being restricted by their covenants or do I have to wait an additional 8 weeks?

[Wanderer]

Could you clarify the 14 / 8 weeks split please?

"8 weeks commencing on the day after the last day on which the work-seeker worked or 14 weeks commencing on the first day on which the work-seeker worked", whichever one is later.

In your case, it would be 8 weeks from the last day you worked.

It also means that any loss suffered by the agency would be limited to 8 weeks worth of their markup on the contract....

[northernladuk]

Could you clarify the 14 / 8 weeks split please?

My original contract here started the day after the august bank holiday.

I had trouble with my home PC so I was only able to print/sign/scan/send my contract and opt out etc back to them at about lunchtime on my first day. Checking my gmail confirms this.

Does this mean that because my contract has been running since that date (even although this is my 3rd or 4th stint here, I have only ever signed the original contract, and they've gotten me to sign extension notices to the original contract) that I would be free to move without fear of being restricted by their covenants or do I have to wait an additional 8 weeks?

Hmm, now there is an interesting conundrum. The fact you delayed the signing could mean that by turning up you implicitly agreed the opt out. If that was the verbal agreement and expected outcome by all parties then it could stand. I have a feeling that by delaying it to make it invalid won't stand up in court as it could be deemed as devious. That would cast some doubt on the situation so would be interested to see what others say.

There is always the argument about signing it before introduction OR before starting with the client as well. That bit has never been tested so you are in no mans land on that one.

My advice could have been wrong. I was assuming they hadn't asked you to sign until you had started. I didn't think it had just been delayed. Not sure where you stand now.

[beachcomber]

Hmm, now there is an interesting conundrum. The fact you delayed the signing could mean that by turning up you implicitly agreed the opt out. If that was the verbal agreement and expected outcome by all parties then it could stand. I have a feeling that by delaying it to make it invalid won't stand up in court as it could be deemed as devious. That would cast some doubt on the situation so would be interested to see what others say.

There is always the argument about signing it before introduction OR before starting with the client as well. That bit has never been tested so you are in no mans land on that one.

My advice could have been wrong. I was assuming they hadn't asked you to sign until you had started. I didn't think it had just been delayed. Not sure where you stand now.

Have just re read the legal opinion regarding opting out and it states that the opt out must happen before the introduction to the client. so the fact that I signed it on my first day is irrelevant.

If I understand things correctly the opt-out should have been signed as part of the engagement process of getting me on their books. Rather than when I actually started the contract?

[Wanderer]

The fact you delayed the signing could mean that by turning up you implicitly agreed the opt out.

Well spotted!

As northernladuk says, the client could argue that the contract existed through Course of Dealing and the terms were accepted when work started.

Conversely, the worker could argue that the opt out didn't happen "before the introduction or supply" as required by the law so there can be no way to opt out of the agency regulations.

I'd love to see that one come up in court.

[beachcomber]

Have just re read the legal opinion regarding opting out and it states that the opt out must happen before the introduction to the client. so the fact that I signed it on my first day is irrelevant.

If I understand things correctly the opt-out should have been signed as part of the engagement process of getting me on their books. Rather than when I actually started the contract?

My contract does state that I can opt back in at any point however, it will not take effect till the end of my assignment - which is the end of the month. the question is does that automatically negate the 6 month term of their restrictions?

[northernladuk]

Have just re read the legal opinion regarding opting out and it states that the opt out must happen before the introduction to the client. so the fact that I signed it on my first day is irrelevant.

If I understand things correctly the opt-out should have been signed as part of the engagement process of getting me on their books. Rather than when I actually started the contract?

The actual working is 'Introduction or supply' and I can bet my last penny the agents think the supply bit is the one they are conforming to. I know for a start the last agent I got in to a fight with were quite happy for me to ignore the Opt Out option until it came to signing the contract at which point we got in to a fight as I didn't want to Opt Out. Reading through all this now it would appear it was too late by then which would lead me to think they don't realise. This point is very badly worded indeed and can see why the agents think this. I would be willing to bet everyone one that are opted out that has been for an interview didn't sign the Opt Out before it.

Roger Sinclair makes the point about what the 'supply' option means but it is the only reference I can find after searching pretty hard.

In circumstances where the contractor has an existing relationship with a client, and is then requested by the client to contract via the client’s preferred agency, the contractor may still retain the option to opt out of the conduct regulations, until the point of ‘supply; by the agency, on the basis that the agency did not in fact introduce the contractor to the client.

Contractors can circumvent poor agents that fail to adhere to the Conduct Regulations

It seems then this is a very grey area and if you do have to fight an agent on this point you would not blame them for thinking they are right, which is going to make the fight harder. No case law, not well discussed etc isn't going to give you much evidence.

It would appear you are correct but as I say I am sure the agent thinks they are also right. Not a nice situation.

Anyway, you still have an out... The agenct won't get any more money from the client so handcuff won't stand... that way you can avoid this horrible situation with the opt in and out.

[GB9]

Just for clarification, you are not going to the client are you? You are going to their client?

If the above is the case the agency doesn't stand a cat in hell's chance. It is restrictive trade. Is there even actually a clause that says you can't work for the client's client?

As above, if they do get shirty then tell them you will sue for the loss of the entire contract.

And get some real legal advice. I can provide a good contact if required.

[SueEllen]

Any letters you send to the agency send by registered delivery AND email.

I tend to find agents behave when they have received a letter by registered post as they realise they cannot deny receiving them and be believed.

Recorded delivery doesn't work as well and first class post is useless for contract disputes with agents who like threatening people.