Reply to: Restrictive covenant

[Boo]

If you get your contracts through agents (and half of mine have been) then you can't really accuse them of being useless.

If there were no agents then people would get their contracts direct - it's not like the requirements will go away. Hence agents are useless.

Boo

[Spacecadet]

Judges rule on the law and what is written in the contract. This means they will look at the technicalities and rule on that not what you wish it to say.*

In this case the supplier is different and so the old supplier is not liable for penalties. The representative is not liable for any penalties in that clause.

However there may be other clauses in the contract where the representative is liable, plus the contract may not define the word "supplier" strictly.

I think the courts will sometimes look at the substance rather than just the technicalities.

For example, they may lift the 'corporate veil' to see who is behind a company, where there is a 'fraud or sham' and someone is trying to do something they would be prevented from doing. There's a whole body of caselaw some of which may be relevant to these circumstances. I'm not saying it is the whole picture as usually the legals depend on the detail but in lay person's terms -

Gilford Motor Co Ltd v Horne (1933)
H was a car salesman, and left G. His contract stated that he wasn’t
allowed to sell to G’s customers for a period after leaving. H set up a
company which then approached his former customers; H argued that
firstly his company was approaching the customers, not him; and
secondly, if thee was wrongdoing, his company was liable and not him.
The courts held that the company was sham, and granted an injunction
against his company as well as him.

WHS

However there may be other clauses in the contract where the representative is liable, plus the contract may not define the word "supplier" strictly.

We've not seen the rest of the contract, so it does n't matter

I do however have a problem with agencies trying to bulltulip me over legal aspects of my contracts including putting clauses that are unenforceable if they were tested in a court of law.

I would not say that this is an unenforceable clause, poaching customers is under hand behaviour.

[Spacecadet]

I'd feel I should have picked a career which is actually useful in some way, then I'd find a quiet corner and blow my brains out. But then, I'm not an agent so what should I know ?

Boo

If you get your contracts through agents (and half of mine have been) then you can't really accuse them of being useless.

[Boo]

How would he feel if having successfully got one contractor on site and planning to get another 3 or 4 on board he then finds out that contractor #1 has gone to the client with a bunch of his own mates CVs and the client co now wants them instead?

I'd feel I should have picked a career which is actually useful in some way, then I'd find a quiet corner and blow my brains out. But then, I'm not an agent so what should I know ?

Boo

[PSK]

I think the courts will sometimes look at the substance rather than just the technicalities.

For example, they may lift the 'corporate veil' to see who is behind a company, where there is a 'fraud or sham' and someone is trying to do something they would be prevented from doing. There's a whole body of caselaw some of which may be relevant to these circumstances. I'm not saying it is the whole picture as usually the legals depend on the detail but in lay person's terms -

Gilford Motor Co Ltd v Horne (1933)
H was a car salesman, and left G. His contract stated that he wasn’t
allowed to sell to G’s customers for a period after leaving. H set up a
company which then approached his former customers; H argued that
firstly his company was approaching the customers, not him; and
secondly, if thee was wrongdoing, his company was liable and not him.
The courts held that the company was sham, and granted an injunction
against his company as well as him.

[SueEllen]

If he's not involved how is it going to happen?

Yes, he could go machiavellian and hide behind shell companies and "unrelated" intermediaries but he will still be cheating agency out of their income and the courts would see it the same way.

Judges rule on the law and what is written in the contract. This means they will look at the technicalities and rule on that not what you wish it to say.*

In this case the supplier is different and so the old supplier is not liable for penalties. The representative is not liable for any penalties in that clause.

However there may be other clauses in the contract where the representative is liable, plus the contract may not define the word "supplier" strictly.

Regardless if you win your case it doesn't stop the judge telling you off and making you pay your own legal fees/or the other sides if s/he knows yours are less.

I don't see why people have such an issue with agencies trying to make a profit. If finding clients was so easy they wouldn't exist.
Or if you think that finding clients is so simple then go and find your own.

I don't have problem with agencies making a profit.

I do however have a problem with agencies trying to bulltulip me over legal aspects of my contracts including putting clauses that are unenforceable if they were tested in a court of law.

*I knew people doing some high profile civil cases and that's what the arguments boiled down to.

[perplexed]

Just throwing something out there if that was his real desire.

[Spacecadet]

Surely though, with a new company supplying the different service, having AN Other wouldn't fall into that category as it wouldn't be a substitute for the services being supplied to the client already? Basically, completely different company supplying totally different service to the end client without involvement of the op?

Should the OP then take over control later on, well, that's up to the op...

If he's not involved how is it going to happen?

Yes, he could go machiavellian and hide behind shell companies and "unrelated" intermediaries but he will still be cheating agency out of their income and the courts would see it the same way.

I don't see why people have such an issue with agencies trying to make a profit. If finding clients was so easy they wouldn't exist.
Or if you think that finding clients is so simple then go and find your own.

[perplexed]

The supplier being his ltd co. The representative being him (or his substitute should he use one)

Surely though, with a new company supplying the different service, having AN Other wouldn't fall into that category as it wouldn't be a substitute for the services being supplied to the client already? Basically, completely different company supplying totally different service to the end client without involvement of the op?

Should the OP then take over control later on, well, that's up to the op...

[Spacecadet]

What about setting up a new company to handle this and having a family member as Director / Manager ( figurehead, of course ). Create an email account in their name, handle it all that way?

that way your hands would be clean? Once a time period over, then you take it over...

Not really

"The Supplier and the Representative

The supplier being his ltd co. The representative being him (or his substitute should he use one)

[perplexed]

What about setting up a new company to handle this and having a family member as Director / Manager ( figurehead, of course ). Create an email account in their name, handle it all that way?

that way your hands would be clean? Once a time period over, then you take it over...

[Wanderer]

"The Supplier and the Representative shall not during the contract term or thereafter for a period equivalent to the period of this agreement (but not being less than 3 months nor more than 12 months) either directly or indirectly (whether under a contract of services or contract for services or through any third party) provide any services to the Client or End User except by contract through AGENCY NAME unless the Supplier shall first have paid to AGENCY NAME a fee of 20% of the total renumeration including the value of benefits attributed by the Inland Revenue agreed to be paid or provided by the Client or End User for the relevant period of provision of such services (but not exceeding 12 months) plus VAT."

What I'd like to know is whether this is enforceable

You know that "Opt Out" of the Conduct of Employment Egency Regulations where the agency were so anxious for you to sign your rights away when you started working for the client? Did you sign it? Was it signed separately to your contract? Was it signed before you were introduced to the client?

If you didn't opt out or perhaps the opt out wasn't properly done before the introduction then this clause in your contact is probably not valid.

Don't expect the agency to bend over and take it though , they are going to fight like a wild cat over this one. Probably the weakest link is the client. If the client buckles under pressure from the agency then you will lose. If the agency try and take your LTD on without bringing the client into the legal dispute (in order to not prejudice their place on the PSL) then you have a fair chance of winning in my opinion.

The best thing to do is to keep it as quiet as you can, the longer it is before the agency find out what you're doing the better.

[dreammeister]

Going back to the OP

How would he feel if having successfully got one contractor on site and planning to get another 3 or 4 on board he then finds out that contractor #1 has gone to the client with a bunch of his own mates CVs and the client co now wants them instead?

Thanks for everyone's replies this is really helpful. To answer the good point that Spacecadet made, any contractors placed by me I would expect to get paid for, any contractors placed by anyone else (even by the people I had originally placed) I would not expect to get paid for. I guess it comes down to who can fill the role. I honestly would not feel hard done by if someone I had placed started trying to place staff, I don't expect any freebies.

[SueEllen]

The client, agency and the op need to start negotiating an exit from the agency. If the agency won't play ball, then go down the route of starting up a new company (having first checked for any personal liability due to the convenant).

The clause has no financial penalties for the representative only the supplier.

As the supplier is not the same as the representative then there is nothing stopping the representative resigning from the original supplier, and working for a new supplier that provides services to the client.

There is also no rule that you have to be the director of the new supplier, and there is also nothing stopping the old supplier from going out of existence.

[Spacecadet]

Going back to the OP

How would he feel if having successfully got one contractor on site and planning to get another 3 or 4 on board he then finds out that contractor #1 has gone to the client with a bunch of his own mates CVs and the client co now wants them instead?