Trying to understand handcuff clause details / Consultancy

**ladymuck** · 27 February 2020, 21:59

So you're ignoring the reference to a third party?

**northernladuk** · 27 February 2020, 22:00

Originally posted by cyborg1337 View Post

I see a grey area in that clause. I get that I'm not allowed to provide the same or similar services to ClientCo and there is a 6 month cool-off period. I assume this implies direct services to ClientCo?

If I switch to a new Consultancy (letting contract end naturally with Agency and old Consultancy) I will then be providing services to the new Consultancy. The relationship with ClientCo would be an indirect one. .

Why do you assume that?

Everyone sees a grey area when it affects them and they don't want to. Odd that innit.

**SimonMac** · 27 February 2020, 22:15

So different consultancy for the same end client?

I’d double check that new consultancy is ok starting a turf war with old consultancy. I’ve seen some places where this is tolerated but not actively encouraged, I’ve seen it go the other way and as you’re stuck in the middle you inevitably lose

**Old Greg** · 27 February 2020, 22:16

Originally posted by cyborg1337 View Post

This is the set up: MyCo > Agency > Consultancy > ClientCo

The handcuff clause between MyCo and Agency says:

...or with any third party introduced to the Contractor or Personnel by the Client to provide any services of the same or similar nature to the Services during the term of the Assignment and for a period of 6 months

I see a grey area in that clause. I get that I'm not allowed to provide the same or similar services to ClientCo and there is a 6 month cool-off period. I assume this implies direct services to ClientCo?

If I switch to a new Consultancy (letting contract end naturally with Agency and old Consultancy) I will then be providing services to the new Consultancy. The relationship with ClientCo would be an indirect one.

I'm really unsure what legal situation that puts me in. What are your thoughts?

PS: Also keep in mind that in all circumstances i'm onsite at ClientCo.

Inside or outside IR35?

**cyborg1337** · 27 February 2020, 23:31

I'm not ignoring reference to third party I'm fully aware it's referring to ClientCo in this case.

What I'm saying is that when I change the consultancy, technically I'm providing the service directly to the new consultancy. Third party is ClientCo, not competitor consultancy.

When you have clauses like these, I'd assume it makes them quite to difficult to enforce.

New consultancy appears willing.

IR35 status not clear yet.

**Old Greg** · 28 February 2020, 07:57

Originally posted by cyborg1337 View Post

I'm not ignoring reference to third party I'm fully aware it's referring to ClientCo in this case.

What I'm saying is that when I change the consultancy, technically I'm providing the service directly to the new consultancy. Third party is ClientCo, not competitor consultancy.

When you have clauses like these, I'd assume it makes them quite to difficult to enforce.

New consultancy appears willing.

IR35 status not clear yet.

If inside IR35, go via a brolly and close down your Ltd.

**ladymuck** · 28 February 2020, 09:37

Originally posted by cyborg1337 View Post

I'm not ignoring reference to third party I'm fully aware it's referring to ClientCo in this case.

What I'm saying is that when I change the consultancy, technically I'm providing the service directly to the new consultancy. Third party is ClientCo, not competitor consultancy.

When you have clauses like these, I'd assume it makes them quite to difficult to enforce.

New consultancy appears willing.

IR35 status not clear yet.

The out of context snippet was not clear as to which entity fulfils which role in the chain.

So the client in the contract is not the client in the chain. Ok, so the client is the third party and has no idea who you are as you're just a body dropped in by any old consultancy (who is the client in the contract).

The consultancy that did have the work to deliver project X is no longer delivering that work and the End Client (who you call a third party) has awarded that work to a new consultancy and, despite it being a packaged service they bought, they know who all the staff are and have asked you to move to the new consultancy to continue delivering the product that the old consultancy couldn't deliver?

**cyborg1337** · 28 February 2020, 18:50

Originally posted by ladymuck View Post

The out of context snippet was not clear as to which entity fulfils which role in the chain.

So the client in the contract is not the client in the chain. Ok, so the client is the third party and has no idea who you are as you're just a body dropped in by any old consultancy (who is the client in the contract).

The consultancy that did have the work to deliver project X is no longer delivering that work and the End Client (who you call a third party) has awarded that work to a new consultancy and, despite it being a packaged service they bought, they know who all the staff are and have asked you to move to the new consultancy to continue delivering the product that the old consultancy couldn't deliver?

Almost there! There are multiple consultancies that provide the same services to the end client! Anyway, my plan is to jump to one of them AFTER my contract ends. The old one will still be around.

Because work is always done indirectly for the third party (end client), and the terms are not crystal clear, I'm not sure what situation that puts me in legally. Perhaps I need to get professional advice.

**eek** · 28 February 2020, 18:52

Originally posted by cyborg1337 View Post

Almost there! There are multiple consultancies that provide the same services to the client! Anyway, my plan is to jump to one to one of them AFTER my contract ends.

If that's the case you are about to be the piggy in the middle of an all out turf war - which won't work out for you unless it's the end client insisting you move consultancy and thus agency.

Trying to understand handcuff clause details / Consultancy