HELP – Working for a Big Client through another agency and “Restraint of Trade”

[2uk]

I am waiting for PCG help line on that , but here it goes :

I had a standard “Restraint of trade” clause in my contract with Agent A . Now I have Agent B offering me a gig with the same client.

It has been less than 2 months since I have done the contract through Agent A and the “Restraint of trade” clause with Agent A is for 12 months.


Agent B is arguing that the clause in unenforceable in court solely because the client is a large company with multiple offices and departments. According to Agent B, because my contract with Agent A mentions only the main trade name of the client and DOES NOT mention any specific departments within that large client – I can work safely through Agent B – EVEN WITHIN THE SAME DEPARTMENT .

The work with Agent B is indeed for a different department , but I might end up working even in the same building.

I haven’t found support for Agent B’s claims on either the PCG or CUK forums.

I haven’t opted out with Agent A ( nor I was presented this option ) , nor opting out is mentioned in my contract with Agent A.

My “Restraint of Trade” clause with Agent A is worded like that:

The Contractor cannot , except through the Company(Agent), provide or procure the provision of any services or carry out or procure the carrying out of any other business activity, work or
services for the Client or any Affiliate of the Client or for any third party
directly or indirectly introduced by the Client if the activity, work or services
are either the same as or similar to or competitive with the services provided
by the Contractor under this Agreement.

[Gonzo]

I am waiting for PCG help line on that , but here it goes :

I had a standard “Restraint of trade” clause in my contract with Agent A . Now I have Agent B offering me a gig with the same client.

It has been less than 2 months since I have done the contract through Agent A and the “Restraint of trade” clause with Agent A is for 12 months”


Agent B is arguing that the clause in unenforceable in court solely because the client is a large company with multiple offices and departments. According to Agent B, because my contract with Agent A mentions only the main trade name of the client and DOES NOT mention any specific departments within that large client – I can work safely through Agent B – EVEN WITHIN THE SAME DEPARTMENT .

The work with Agent B is indeed for a different department , but I might end up working even in the same building.

I haven’t found support for Agent B’s claims on either the PCG or CUK forums.

I haven’t opted out with Agent A ( nor I was presented this option ) , nor opting out is mentioned in my contract with Agent A.

My “Restraint of Trade” clause with Agent A is worded like that:

1. The last person's advice that you should listen to in this situation is Agent B's.

2. The second to last person's advice that you should listen to in this situation is ours.

However, I think, but I am not making any promises, it is the case that if you were not opted out of the Agency Regulations for your contract through Agent A, then the handcuff clause is unenforceable after 8 weeks of you finishing with the client on the assignment through Agent A.

Best get the PCG's advice on this as they know quite a lot about this.

[dude69]

take the job and tell them to bring it on. They won't sue you, they have better things to do, plus they don't want to upset their client.

Bottom line is restraint of trade clauses are contrary to public policy because they leave you unemployed and potentially sucking off the public teat.

They are only relevant in very special cases, such as senior directors with trade secrets.

Doing different work in the same company, it's just not relevant. The second agent got you the gig, it's got nothing to do with the first one. If you left agent 1 and carried on the same job without paying their commission, that would be different.

[TheFaQQer]

If agency B are so confident that you can go back, then it should be straightforward for them to provide you with an indemnity that says that they will pay for any damages you must pay to Agency A.

If you are opted in, then after 8 weeks (I think - it could be 6) then you can go back with no problems.

FWIW, I think that agency B is telling you a load of cr@p (shock!) to get you to sign up, but you should be able to get out of it by being opted in.

[2uk]

FWIW, I think that agency B is telling you a load of cr@p (shock!) to get you to sign up, but you should be able to get out of it by being opted in.

Agent B is telling me that he is dealing with cases like that all the time. So he is saying that he had confirmed this with solicitors , etc .

However , I will do what the PCG says.

[2uk]

Bottom line is restraint of trade clauses are contrary to public policy because they leave you unemployed and potentially sucking off the public teat.

They are only relevant in very special cases, such as senior directors with trade secrets.

That is quite a brave statement. So the reason every contractor has one is just to scarecrow us ?

[NotAllThere]

That is quite a brave statement. So the reason every contractor has one is just to scarecrow us ?

Yes, mainly.

[TheFaQQer]

take the job and tell them to bring it on. They won't sue you, they have better things to do, plus they don't want to upset their client.

Brave advice - this is an open and shut case that they are guaranteed to win. They could easily get £5k just be going to small claims court - and it would inconvenience them a lot less than it would inconvenience the OP, and have no impact on the client.

Bottom line is restraint of trade clauses are contrary to public policy because they leave you unemployed and potentially sucking off the public teat.

A clause that says that your company cannot deal directly with another company means that you would be left sucking off the money in your company, not the public teat.

There are plenty of precedents of companies having this kind of clause, which have been upheld in the courts. If the courts deem it reasonable, then you can't go direct without breaching your contract.

[TheFaQQer]

Agent B is telling me that he is dealing with cases like that all the time. So he is saying that he had confirmed this with solicitors , etc .

However , I will do what the PCG says.

That's good news - if he's so confident, and has had it confirmed, then he'll have no problem with guaranteeing that they will cover any costs and damages incurred if the other agency sue you.

[dude69]

Brave advice - this is an open and shut case that they are guaranteed to win. They could easily get £5k just be going to small claims court - and it would inconvenience them a lot less than it would inconvenience the OP, and have no impact on the client.

Easily?

Firstly:

(a) They would have to prove they have suffered an actual financial loss (b) They have to prove the clause has been breached
(c) They have to prove the clause is enforceable

And also they would have to engage a lawyer, which will cost them quite a lot of money, and also take staff off the actual business of making money while managing it, whereas the OP can defend the case himself.

No judge is going to just hand out £5k - you can only claim what you can prove you have lost.

A clause that says that your company cannot deal directly with another company means that you would be left sucking off the money in your company, not the public teat.

Nonsense, you stand up in court, explain how the company is your only source of income, and that they are putting a one-man business out of work. The starting presumption is NOT to enforce these clauses.

There are plenty of precedents of companies having this kind of clause, which have been upheld in the courts. If the courts deem it reasonable, then you can't go direct without breaching your contract.

In which case they have to get an injunction, which is expensive.

Just call their bluff, tell them that you will defend any action vigorously in the courts, and don't worry further until they do anything, which is IMO unlikely.