Restrictive Clauses...

[neily]

Are these actually enforceable in a court of law ??

Before renewal I requested an increase in my daily rate, but neither the recruitment agency nor the 'service provider' between them and the end Client, were willing to review their large piece of the pie, without them also getting an increase from the End Client Naturally the End Client refused and we hit stalemate...So the Contract expired.......

However I did re-sign to the same End Client via their preferred Agency. This allowed the End Client to reduce their outgoings (preferred Agency had a far lower flat rate), and for me to increase my daily rate..Everyone a winner

However, the original service provider have found out about this via 'a mole' and are threatening me with the restrictive clause and claiming reimbursement for potential future loss of their 'slice of the pie'.

My arguement is that I gave both them and the recruitment agency an opportunity to re-negioatate and they were not willing to reduce their profit margins (a total of 40% of the gross amount charged to the End Client !).
They have prioced themselves out of the market and are now whinging about loss of future potential fees...

Any comments/thoughts please

[Cowboy Bob]

Are these actually enforceable in a court of law ??

Before renewal I requested an increase in my daily rate, but neither the recruitment agency nor the 'service provider' between them and the end Client, were willing to review their large piece of the pie, without them also getting an increase from the End Client Naturally the End Client refused and we hit stalemate...So the Contract expired.......

However I did re-sign to the same End Client via their preferred Agency. This allowed the End Client to reduce their outgoings (preferred Agency had a far lower flat rate), and for me to increase my daily rate..Everyone a winner

However, the original service provider have found out about this via 'a mole' and are threatening me with the restrictive clause and claiming reimbursement for potential future loss of their 'slice of the pie'.

My arguement is that I gave both them and the recruitment agency an opportunity to re-negioatate and they were not willing to reduce their profit margins (a total of 40% of the gross amount charged to the End Client !).
They have prioced themselves out of the market and are now whinging about loss of future potential fees...

Any comments/thoughts please

IANAL, but as far as I know the "handcuff" clause is legal but it needs to be shown to be "reasonable" or the courts are likely to throw it out. If the handcuff is 3 months and your original contract is 6 months or less, then this can be interpreted as reasonable. If the contract was over 6 months, the up to 6 months can be considered reasonable.

I had a slightly different situation to you, but in the end I had to buy out the contract as I didn't want it to get to court and the client wanted me to carry on with the project. The agency wanted compensation of £15k for "potential future loss" just as in your situation and they were likely to get an injunction and take MyCo to court over it from what I understood. Because, like you, the client wanted out too, we agreed to split the difference so it only cost me £6k. If the profit from your new contract is greater than the cost to you to pay up, you might be better off doing that rather than risk getting sued.

[Diestl]

The courts can see through the spineless agents, you choose the best agent, they have no leg to stand on. It's a competitive market and the best agent wins. They will try and bulltulip you with the "we sent your CV first" but you can choose who your agent is.

[Cowboy Bob]

The courts can see through the spineless agents, you choose the best agent, they have no leg to stand on. It's a competitive market and the best agent wins. They will try and bulltulip you with the "we sent your CV first" but you can choose who your agent is.

But the OP has already signed with one of them.