Restrictive Terms of Trade

Hi,

I've recently completed a contract for a major bank.

The setup of this contract was such:

MyCompany --> Recruiter A --> Recruiter B (Preferred Supplier) --> Bank


In my contract with Recruiter A, there's a clause which reads as follows:

"During the period of this agreement and for a period of one year following completion of the Contract Works, the Supplier agrees not to solicit work directly or indirectly with Recruiter A's client or its group companies .... without the written agreement of Recruiter A."


Recruiter C has since approached me on behalf of the Bank, and potentially with a tie up to Recruiter B as the preferred supplier, for a role within the same group of the bank as I was previously, although the role is slightly different (not that this matters).


What I'm trying to confirm is that whether:

a) Recruiter A can enforce this clause under those circumstances
b) Does being approached via a different party fall outside the definition of 'solicitation' ?
c) Is such a clause an unenforceable restraint of trade preventing me from pursuing work with the Bank when it is close to home, has the work I want to do and so on.
d) Can I be enforced, under such a clause, to take up a contract with Recruiter A if I don't want to, and want to use Recruiter C ?



Anything else I'm missing ?


My view is that unless I'm taking work away from Recruiter A that no one else had already (e.g. Recruiter C) then I'm okay to do that and that should not prevent me from approaching either Recruiter B and/or The Bank for future roles at any time once my contract with Recruiter A has finished.

I would welcome any thoughts or opinions on this.

Anyone also experienced this and worded their contract differently to 'water down' or 'ring fence' such a clause ?


Cheers

Mavster07.

[SueEllen]

To have a clear view whether this is a restriction of trade then:
1. The exact wording of your contract is needed
2. You need to state whether you doing exactly the same work
3. You need to state whether you are working for exactly the same department*

The common view is that a one year clause is a restriction of trade however it depends on exactly how recruiter A worded the contract with you.

If you are lucky the wording will be either ambiguous enough for it to be easy for you and your solicitor to argue it is a restriction of trade, or due to you doing different work in a different department you and your solicitor can argue this.

You will probably need a solicitor to write a few letters to scare the agent off which you will obviously have to pay for. And be prepared in the worst case for the agent to start court proceedings against you.

Oh and if recruiter A phones you up tell them that you are recording them before they say anything as you need the recording for record keeping purposes.

*You don't need to do it on here just go and get some legal advice

[mavster07]

Its the same work in the same department.

Role is more specific than the role worded in the contract with Recruiter A.

Does not the question of solicitation come into it ?

[SueEllen]

Its the same work in the same department.

Role is more specific than the role worded in the contract with Recruiter A.

Does not the question of solicitation come into it ?

Go and speak to a solicitor and take your old contract with you.

Seriously.

The advice really depends on the exact words used in your contract.

[pmeswani]

Its the same work in the same department.

Role is more specific than the role worded in the contract with Recruiter A.

Does not the question of solicitation come into it ?

Depending on the interpretation of the wording in your contract with recruiter A, I would be careful how you tread. Recruiter C may try and persuade you to ignore the clause. However, in this circumstance, you may be wise to either seek legal advice, do everything you can to get your original agency involved or walk away from the opportunity.

[deckster]

In general, these are very difficult to enforce in any but the most clear-cut of situations (eg you drop the agent at renewal time to go direct). It's worth noting that there is a distinct lack of any legal precedents in the IT contract world - it seems that either contractors roll over and let the agencies do what they want, or agencies are all bluster. Certainly the only time I've ever been in this situation (the agency was taken off the PSL for a particular client and so all their contractors were switched over to a new agency at renewal time) I had a couple of phone calls threatening legal action which never materialised.

As has been said you need to tread very carefully but the key phrase is "legitimate protectable interest.'' The clause is only enforceable if there is a legitimate interest to be protected, and generally in IT contracts this means that the agency has to have had a reasonable expection of placing you in the new role. I have no idea if this is the case here.

In terms of what could potentially happen - no, of course you cannot be forced to enter into a contract with agency A against your will. They would however be entitled to sue you for their direct losses, which in this case would amount to their cut over the duration of the contract in question.

[Archangel]

Did you opt out of the agency regs?

[Solidec]

If you didnt opt out you can go direct or anywhere inbetween either after 14 weeks of contract start or 9 weeks of contract end, whichever is the sooner.

If you did opt out, most courts would struggle to enforce even a 6 month clause, 3 month clauses are usually as far as the courts would push.

[mavster07]

Opting and Out

yes, I did opt out.

I found the comment on "legitimate protectable interest.'' very interesting, as I agree this is what it comes down to. As Recruiter A was not on the PSL, there's no guarantee that they would have been given future roles to place me into, let alone this role.

I think Recruiter A is on shaky ground and I told Recruiter C to move it forward as its my risk and I'm prepared to take Recruiter A on as I feel they cannot restrain my choice of agency to the end client. If they had a legitimate interest, they'd get on the PSL wouldn't they ?

[ptucker]

Any further info

Hi,

I have a similar situation and just wondered what the outcome of this was - if any?

Thanks