Reply to: Non-Solicitation Issue

[gjltd]

Thanks all for your replies.

It appears this is quite a difficult issue, as I'd predicted. I'll likely have to escalate this to a lawyer who specializes in Employment Law to ensure I've covered all bases.

Thanks again for your help.

[SueEllen]

As an aside, there is the possibility of working for another Client next year, whilst remaining at the same facility (essentially working for a client that Company X has had no previous dealings with). Could this be a solution with regards to negating the non-solicitation clause? Or could Company X contest that as I'd still be working on the same project, albeit through a different client, it'd still remain valid?

Depends on what the clause exactly says.

You have already been told to take your contract to an employment solicitor for a view.

[LondonManc]

As an aside, there is the possibility of working for another Client next year, whilst remaining at the same facility (essentially working for a client that Company X has had no previous dealings with). Could this be a solution with regards to negating the non-solicitation clause? Or could Company X contest that as I'd still be working on the same project, albeit through a different client, it'd still remain valid?

No. You've worked with them; they're regarded as a current customer. If you particularly want to leave and go and work for the other company, you many have to approach your manager and discuss it. If they were looking at making redundancies because of losing the contract with target client then you may save them a job. Others may recommend against it because it's showing more of your hand/indicating that you're not staying there long term but I think it's a case of how much you've got your heart set on leaving.

[gjltd]

As an aside, there is the possibility of working for another Client next year, whilst remaining at the same facility (essentially working for a client that Company X has had no previous dealings with). Could this be a solution with regards to negating the non-solicitation clause? Or could Company X contest that as I'd still be working on the same project, albeit through a different client, it'd still remain valid?

[TheFaQQer]

It there is no non poaching clause in the agreement between company and x and client y, it would be the first time in the history of IT services.

It does happen. When I was a consultant, one client was looking to recruit me as a contractor instead (and save £1000 a day over the consultancy fees).

But when they looked into it, they found that there was a handcuff clause - but it was them (or rather their parent company) that insisted on it being in place, rather than my employer.

[LondonManc]

It there is no non poaching clause in the agreement between company and x and client y, it would be the first time in the history of IT services.

It's the main clause in any professional services contract as it obviously makes sense to cut out the intermediary.

I suspect your own employment contract will also be rock solid in restricting you from going to direct to a client of your companies.

It's a bit naive to expect Company X will be cool with this unless they are in financial distress.

No, it wouldn't.

We lost a great lad because of it 15 years ago when I was on the same perm team as him. I'd imagine those that have suffered loss or have similar experiences have covered it but not all of them.

[SueEllen]

It there is no non poaching clause in the agreement between company and x and client y, it would be the first time in the history of IT services.

It's the main clause in any professional services contract as it obviously makes sense to cut out the intermediary.

I suspect your own employment contract will also be rock solid in restricting you from going to direct to a client of your companies.

It's a bit naive to expect Company X will be cool with this unless they are in financial distress.

Just because there is a no poaching agreement in the contract doesn't mean it's enforceable.

IT companies and consultancies often don't properly check their clauses for each role with lawyers. So while it's enforceable for a sales bod it's not enforceable for an IT bod who doesn't have a direct revenue raising relationship with clients.

I know many people who walked out of their employer and took up work with the employer's client they had been doing project work for. The ex-employers then discovered that the clause they put in is unenforceable due to not being specific enough for the IT role. One had a 12 month clause in and was told that it was too long. However that employer wanted to stop the person moving to the client full-stop as he was the only person doing work for that client and they legally couldn't due to how the clause was written.

On the other hand the enforceable clauses I know about are all outside IT. The majority for generic skilled not directly revenue raising roles are for 3-4 months and the person is normally put on gardening leave.

One I know was enforced in court was for a healthcare practitioner in a rural area who was not allowed to work within 5 miles for 12 months. However talking to a healthcare manager I was told they couldn't put this clause in their contracts as in the urban area their practice was in they had a higher population density and no issues with getting patients. In fact they had to turn people away.

[Kanye]

It there is no non poaching clause in the agreement between company and x and client y, it would be the first time in the history of IT services.

It's the main clause in any professional services contract as it obviously makes sense to cut out the intermediary.

I suspect your own employment contract will also be rock solid in restricting you from going to direct to a client of your companies.

It's a bit naive to expect Company X will be cool with this unless they are in financial distress.

[gjltd]

All,

Thanks for your detailed response so far.

Just to shed a little more light on my situation and my current position:

- As mentioned in the OP I am employed as a consultant by Company X, working on secondment as a consultant for Client Y for the past 18 months.
- Due to my close working relationship with Client Y, I have raised the potential of 'going solo' from 2016 onwards, in full knowledge that the existing PO between Company X and Client Y is due to end at the end of the year. Client Y is fully supportive of the potential switch and is unaware of any formal 'non-poach' clauses that may exist in the T&C's between Client Y and Company X.
- I've yet to raise this issue with Company X as it's still in the idea stage, but I just want to be sure that once I raise the potential switch that I will be in a solid legal position to justify my move from employed to contractor.
- As for circumstance, I work on the project on behalf of Company X as I'm the only consultant who could feasibly work on the project (location, work hours, experience, availability etc). That said, I'm sure they could argue that they could just employ a new consultant to fill my space? All hypothetical but I'm just playing Devils advocate to myself here.

Again, responses majorly appreciated

Cheers

[LondonManc]

Client Co doesn't exist. This is dealing with their permanent employer - if there isn't work, then they would be looking at redundancy proceedings.

And if that's the path, then the OP may very well be best off taking that pay off instead.

Ah, right. My mistake, presumed it was a contractor as a consultant arrangement.

Makes it more complicated but if PermCo are potentially going to make redundancies as a result of losing ClientCo, taking VR as soon as it's offered is the best route I can think of. They've made you redundant which negates the solicitation clause so all is good. If no redundancies are in the offing then it's a more complex negotiation.

[TheFaQQer]

I'd front up to the Client Co and ask them if there's work for you beyond the end of the year.
Then if they offer nothing you're free to work for End Client Co.

EDIT: The timing of this is probably important - Client Co may not know at the moment and you need to manage End Client Co expectations accordingly. Your honesty will probably be appreciated by ECC

Client Co doesn't exist. This is dealing with their permanent employer - if there isn't work, then they would be looking at redundancy proceedings.

And if that's the path, then the OP may very well be best off taking that pay off instead.

[LondonManc]

I'd front up to the Client Co and ask them if there's work for you beyond the end of the year.
Then if they offer nothing you're free to work for End Client Co.

EDIT: The timing of this is probably important - Client Co may not know at the moment and you need to manage End Client Co expectations accordingly. Your honesty will probably be appreciated by ECC

[MrMarkyMark]

Interesting comments gents, will be interested in others take on this.

Good point, if this is through a consultancy, the handcuff clause would hold water.

[TheFaQQer]

Saying that I just had a thought. If Company X then expect you to go to a different client and make money they will still be losing out so maybe it will still stand as this is generally exactly what these clauses are for, to stop clients taking Company X's employees...

Yep, this.

Plus there may well be something in the contract between X and Y which means that Y has to pay X some money anyway for inducing their employee to breach their contract.

You need to talk to an employment lawyer, they need to talk to a contract lawyer.

[northernladuk]

Saying that I just had a thought. If Company X then expect you to go to a different client and make money they will still be losing out so maybe it will still stand as this is generally exactly what these clauses are for, to stop clients taking Company X's employees...

Sorry for the confusion. I kept getting mixed up with an agency situation.