Consultant to Contractor - Restrictive Covenants? Consultant to Contractor - Restrictive Covenants?
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  1. #1

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    Default Consultant to Contractor - Restrictive Covenants?

    I’m currently working for a large professional services firm and am considering setting up on my own and going contracting - focussing on similar role to those that I currently perform (project/programme/portfolio management, PMO etc.).

    I’m keen to ascertain if there will be any restrictions to the potential clients I could approach in the future. I’ve unearthed my signed contract and can see that it says the following on the topic of restrictive covenants:

    Accordingly, you agree that, for a period of six months after the date of termination of employment with [Company], you will not:
    Canvass of solicit the business of any person, firm, company or other organisation who or which is or was at any time during the period of six months before the end of your active employment a client of [Company] with whom or which you had dealings in the 12 months prior to the end of your active employment with us.


    My question is; can I therefore work for ANY current client of [Company], as long as I’ve not personally worked on an engagement with that client during the past 12 months?

  2. #2

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    Default what penalty

    Quote Originally Posted by ppm View Post
    I’m currently working for a large professional services firm and am considering setting up on my own and going contracting - focussing on similar role to those that I currently perform (project/programme/portfolio management, PMO etc.).

    I’m keen to ascertain if there will be any restrictions to the potential clients I could approach in the future. I’ve unearthed my signed contract and can see that it says the following on the topic of restrictive covenants:

    Accordingly, you agree that, for a period of six months after the date of termination of employment with [Company], you will not:
    Canvass of solicit the business of any person, firm, company or other organisation who or which is or was at any time during the period of six months before the end of your active employment a client of [Company] with whom or which you had dealings in the 12 months prior to the end of your active employment with us.


    My question is; can I therefore work for ANY current client of [Company], as long as I’ve not personally worked on an engagement with that client during the past 12 months?
    does your contract have a penalty associated with above?

  3. #3

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    Quote Originally Posted by ppm View Post
    I’m currently working for a large professional services firm and am considering setting up on my own and going contracting - focussing on similar role to those that I currently perform (project/programme/portfolio management, PMO etc.).

    I’m keen to ascertain if there will be any restrictions to the potential clients I could approach in the future. I’ve unearthed my signed contract and can see that it says the following on the topic of restrictive covenants:

    Accordingly, you agree that, for a period of six months after the date of termination of employment with [Company], you will not:
    Canvass of solicit the business of any person, firm, company or other organisation who or which is or was at any time during the period of six months before the end of your active employment a client of [Company] with whom or which you had dealings in the 12 months prior to the end of your active employment with us.


    My question is; can I therefore work for ANY current client of [Company], as long as I’ve not personally worked on an engagement with that client during the past 12 months?
    It's saying if client A has been associated with Company in the last 6 months, AND you had involvement with them in the last 12 months you cant go to them.

    So if the client hasn't done business with the company for 7 months then you can work for them.
    Whether it would hold up in court.......... A 6 month restriction clause is usually considered narrow enough to be enforceable, and this is 6 month restriction. So I'd be inclined to avoid these clients for 6 months.

    Consider a current client high risk. A client who's not done any business for 7 months low risk. And anyone over 12 months no risk.

    That's not precisely answered your question but this is about risk. It's not black and white.
    Last edited by Lance; 8th February 2018 at 12:29.
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    Quote Originally Posted by tarbera View Post
    does your contract have a penalty associated with above?
    A penalty in an employment contract is unenforceable. The only ones I've seen that come close, are about refunding training costs, and they fail any legal challenge.

    HTH
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    Quote Originally Posted by Lance View Post
    It's saying if client A has been associated with Company in the last 6 months, AND you had involvement with them in the last 12 months you cant go to them.
    I read it that the OP can't canvass or solicit business in that period. But if the OP is approached...
    Where there's muck there's brass.

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    Quote Originally Posted by northernladyuk View Post
    I read it that the OP can't canvass or solicit business in that period. But if the OP is approached...
    You're right. That is what it says.
    Seems odd unless it's worded like that to make it less restrictive and therefore more enforceable.
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    Quote Originally Posted by Lance View Post
    You're right. That is what it says.
    Seems odd unless it's worded like that to make it less restrictive and therefore more enforceable.
    I have a similar clause. They just don't want me going after the business.
    Where there's muck there's brass.

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