Reply to: Restriction Clause help needed

[mike67]

Isn't that what your PI insurance is for? That's different to any monies you've earned being held back.

No, it was specifically as part of the restriction, ie if I went to the client directly or through another agency, they would lose the commission they make on me for three months and so would charge it to me, and this was coupled with a set off clause that said that they would set off anything I owed them (including these liquidated damages) against my invoices. The PI would not cover that, the PI would cover if I screwed something up and they made a claim against me, not if I breached the restrictive covenant.

[northernladuk]

Yes, seen one last year in a proposed contract from an agency. It was worse than that, it had a liquidated damages clause that said that if I broke the terms they would charge me something like 15% of the day rate for three months as an estimate of their losses and then there was a clause saying they could set off anything I owed them against what they owed me. I told them this was unacceptable, they said it was not negotiable, I walked away.

Isn't that what your PI insurance is for? That's different to any monies you've earned being held back.

[mike67]

Has anyone else ever seen a setting off clause in their contracts? I've never seen or heard of one.

Yes, seen one last year in a proposed contract from an agency. It was worse than that, it had a liquidated damages clause that said that if I broke the terms they would charge me something like 15% of the day rate for three months as an estimate of their losses and then there was a clause saying they could set off anything I owed them against what they owed me. I told them this was unacceptable, they said it was not negotiable, I walked away.

[northernladuk]

Has anyone else ever seen a setting off clause in their contracts? I've never seen or heard of one.

[ComplianceLady]

It's become apparent to agencies that the handcuff clauses are increasingly unenforceable and so penalties & setting off have become more prevalent. As one agency finds they can't place someone because they're in a contract with a handcuff & penalty clause they add similar to their contracts. They're difficult to enforce as they have to be written narrowly enough to only protect the agencies interest and not become unreasonably restrictive but generally the effect deters contractors from switching supply and that's sufficient (rather than being tested in court)

A setting off clause is standard in most contracts, it's usually within the payment clause i.e. 'we'll pay your valid invoices less any costs incurred under the contract.' The change is through contracts are becoming more explicit about a penalty i.e. if you breach the handcuff clause we'll charge you X amount. That makes it easier to enforce, you don't have to demonstrate a loss to do so.

It might be but it's so badly written in many contracts it's virtually unenforceable. In ours anyway.


It might be but I very much doubt it's in his contract. I've never seen it or heard of anyone that has this in our line of work

Probably

I very much doubt this. Again, I've never seen it.


Which there isn't so it's for the agent to prove.. which in most cases they can't so it's unenforceable. I've forgotten the situation in this thread to comment on the actual.


Generallyy not in our cases. We don't have the penalty and we certainly don't have the setting off clause so it's pretty clear that the agency need to pay the contract and then set out legal proceedings for breach.

[MrButton]

Better get a good spot on the bench. You’ll be there a while.

[themindseye]

You have still failed to explain your outbursts about how you will never get any job in any industry as a contractor ever again, all because you didn’t read the contract.

Simply put if the restriction could be enforced then it would be the end but it is so broad it couldn't be enforced.
Exactly as the lawyer said

[WTFH]

I'm not making noise over nothing considering I already received lawyers letters from them requesting I leave my new contract now, pay them a large sum of money and no longer work for them or all affiliates for 6 months.

It's in the hands of my lawyer now and he's instructed to raise court proceedings.

You have still failed to explain your outbursts about how you will never get any job in any industry as a contractor ever again, all because you didn’t read the contract.

[themindseye]

That still doesn't mean your a career is over and you'll never work in the industry again which is the topic we are discussion at the moment.

The pace to which the industry moves does mean that it would be difficult for me to find a job in my field and with the rate of pay.
When made redundant it took 14 months for me to find a job in the industry so yes it would be difficult.

[northernladuk]

That still doesn't mean your a career is over and you'll never work in the industry again which is the topic we are discussion at the moment.

[themindseye]

This. Plus, as has already been mentioned, it's only enforceable if any loss can be incurred by the party putting the clause in really in most cases you either don't need to bother informing them but if there is any doubt they are still most likely to let you go ahead.

So you are making one hell of a lot of noise over next to nothing.

I'm not making noise over nothing considering I already received lawyers letters from them requesting I leave my new contract now, pay them a large sum of money and no longer work for them or all affiliates for 6 months.

It's in the hands of my lawyer now and he's instructed to raise court proceedings.

[northernladuk]

6 months does not equal “never again”.

And if you only ever have one client, you’re a disguised employee, not a contractor.

Your career is not done because you have a 6 month exclusion on working for one client.

This. Plus, as has already been mentioned, it's only enforceable if any loss can be incurred by the party putting the clause in really in most cases you either don't need to bother informing them but if there is any doubt they are still most likely to let you go ahead.

So you are making one hell of a lot of noise over next to nothing.

[WTFH]

ok it says:

you will not at any time during the period of the contract or within 6 months following termination of the contract, knowingly service or deal with xxxxxxxxxx or any group or associate companies of xxxxxxxx without the written permission of our company.

That basically covers every single vendor the client uses which means effectively stopping me working for anyone again. Name a Software company and they use them so basically my programming career is done.

They were never going to get a contract again as they were not allowed to bid for it, what they did hope for was the original company who was allowed to bid would simply offload the contract to them for a fee.

6 months does not equal “never again”.

And if you only ever have one client, you’re a disguised employee, not a contractor.

Your career is not done because you have a 6 month exclusion on working for one client.

[themindseye]

Where does it say you will never work in the industry again?

ok it says:

you will not at any time during the period of the contract or within 6 months following termination of the contract, knowingly service or deal with xxxxxxxxxx or any group or associate companies of xxxxxxxx without the written permission of our company.

That basically covers every single vendor the client uses which means effectively stopping me working for anyone again. Name a Software company and they use them so basically my programming career is done.

They were never going to get a contract again as they were not allowed to bid for it, what they did hope for was the original company who was allowed to bid would simply offload the contract to them for a fee.

[northernladuk]

Ok so basically since this company had no way of getting the contract and I in effect have another contract, different role with the same end client I lose the ability to ever work in the industry again.
Considering also they are a recruitment agency and have multi skilled people in many jobs my leaving is not detrimental to them but I assure you if the clause is upheld I will never work again and that's guaranteed.
There was no setting off clause in the contract

Where does it say you will never work in the industry again?