Non-solicitation agreement addressed to individual rather than Ltd

[Lance]

. Should I sign it?

Yes.

Unless you hate the role and want to be dropped without breaching the contract at your end.

Forget the legalese discussion.
The client wants to make sure you don't rip them off (or EndClient doesn't rip them off), and a narrow restrictive covenant is very enforceable. And people buy people which is why they want YOU to sign it not your company.

[SueEllen]

The fact of the matter is you work for the end client - you, not your company. On this channel we all may join in the groupthink/self delusion that we are businesses but people whose income is at stake - in this case agencies - have to be more down-to-earth.

Your company is just twenty quids' worth of paper.

Agencies know full well you can walk away from all of your company obligations by just spending £20 and becoming a new company.

I was working at an agency in the 1980s and they were demanding named people sign things even then. The agency would walk away from the potential revenue if the contractor cut up rough. Agencies have to have principles otherwise they would just get taken to the cleaners.

There are companies consisting of husband and wife, or two siblings with the same skill set*.

If one of the named individuals signs the non-solicitation agreement as themselves, then there is nothing legally to stop the wife or other sibling working with the end-client.

If the non-solicitation agreement is signed as the company and worded properly then no director or employee of that company can work for that end client.

*These are just the people I've worked alongside and met the other person. Some of them have substituted for one another on-site, while others have helped but stayed off-site.

[northernladuk]

Wrong. The law can see past the company and look at the person. It's called piercing the corporate veil. The web page before has exactly what are suggesting as an example.

en.m.wikipedia.org/wiki/Piercing_the_corporate_veil

[Cirrus]

? I feel uncomfortable signing something as John Smith rather than MyCo Ltd, considering John Smith has no legal relationship with ClientCo, AgentCo or EndClientCo.

The fact of the matter is you work for the end client - you, not your company. On this channel we all may join in the groupthink/self delusion that we are businesses but people whose income is at stake - in this case agencies - have to be more down-to-earth.

Your company is just twenty quids' worth of paper.

Agencies know full well you can walk away from all of your company obligations by just spending £20 and becoming a new company.

I was working at an agency in the 1980s and they were demanding named people sign things even then. The agency would walk away from the potential revenue if the contractor cut up rough. Agencies have to have principles otherwise they would just get taken to the cleaners.

[northernladuk]

(sorry, I wasn't the original poster, I was just giving an example from my Agency contract)

Ahh. Had me confused as well. Yes. That's a standard one nearly all of us have. It's to stop you cutting the agent out and going direct with the client so protects the agent. I don't think it protects the client from you going to the end client.

[yMyjgT]

You need to talk to your client, explain why their non-solicitation agreement is invalid and say if they want one that is valid they need to give you one similar to the agency.

(sorry, I wasn't the original poster, I was just giving an example from my Agency contract)

[northernladuk]

All that said I'd probably ask if I can do it thought my LTD, if they say no and give a reasonable answer as to why not then I'd sign it.

[SueEllen]

Checked my contract with agency, and it says:

So that sort of thing would with the agency would already cover what they're now asking you to sign.

You need to talk to your client, explain why their non-solicitation agreement is invalid and say if they want one that is valid they need to give you one similar to the agency. Then leave it up to them to sort out an agreement that covers you, all your company's employees and your company.

If they want a strong one it's up to them to specifically name the end-client(s) otherwise again you could find a way of wiggling out of it. I've been on sites where permies have managed to wiggle out of non-solicitation clauses because either the end client(s) were not named or the time period was too long.

[northernladuk]

Checked my contract with agency, and it says:

So that sort of thing would with the agency would already cover what they're now asking you to sign.

Yeah but that's covering you cutting the agent out, not protecting the client form the end client poaching you I would have thought.

[northernladuk]

Surely they should be asking your company not to engage with endclientco ?
Or are they quite happy for your company to send another contractor to endclientco?

Possibly but the individual could leave the company and then go work for the end client. If the individual is named the handcuff applies to that individual, not whatever method he is engaged under. His company also doesn't have any relationship with the client. His contract is between his LTD and Agent so client just see's him as a personal entity not a company.

If it's you as a named individual, that's exercising direction/control over you I guess, i.e. it would have IR35 implications.

It's not D&C, it's a restriction. Using that argument having an individual sign H&S and Security Policies could be seen as D&C. So I don't think its an issue.

If it is in the contract I expect it's too woolly to be enforceable and the client recognizes it. Also this is the contract between you and the agent. It's not with the client so I can see why they want you to sign one to cover them and their end client.

Do the people that asked you to sign it know you are a contractor and do they understand how you are engaged i.e. via a LTD?

[yMyjgT]

Just as an example for the OP, I checked my contract with agency, and it says:

MyCo Ltd shall not, and MyCo Ltd's representative shall not, directly or indirectly, through any company, partnership or person, solicit or enter into any contract with the Client or any 3rd party introduced to MyCo Ltd or the MyCo Ltd Representative by the client, to provide any services of the same or similar nature .....blah blah...during the Assignment or the restriction period

So that sort of thing would with the agency would already cover what they're now asking you to sign.

[yMyjgT]

Surely they should be asking your company not to engage with endclientco ?
Or are they quite happy for your company to send another contractor to endclientco?

If it's you as a named individual, that's exercising direction/control over you I guess, i.e. it would have IR35 implications.

[SueEllen]

Has your agency contract got a non-solicitation agreement in it which covers the employees of your company?

[aytri]

MyCo Ltd is contracted to ClientCo via AgentCo. ClientCo's end-client is EndClientCo.

ClientCo has just given me a non-solitication agreement to sign, addressed to me as an individual at my home address (rather than MyCo at MyCo's registered address), which restricts me (as an individual) from working for EndClientCo for a period of six months following the end of the performance of the services by "you", where "you" is defined as me as an individual (e.g. "John Smith of My Address, My Road, My Town, AB12 1CD, UK).

I am now midway through the term of MyCo's contract with ClientCo.

It feels like an IR35 risk... but I'm not sure. Should I sign it? I feel uncomfortable signing something as John Smith rather than MyCo Ltd, considering John Smith has no legal relationship with ClientCo, AgentCo or EndClientCo.