Restriction Clause help needed

[themindseye]

I read on the forum of another individual who has a similar problem under what was called a handcuff clause.
My situation is this.
I am presently contracted to a sub contractor of a major contractor to a particular large Business client.
Up until now any time the contract was renewed it was a case of a simple extension, I signed a new 6 month contract and that was it, however this year the whole framework changed.

No longer was the single major contractor automatically given right to any of the new contracts and in turn the positions were released to all major contractors. In effect the position I have worked in for 12 months has gone out to the world to compete for.

My contract with them terminates on the 31st Dec 2018.
I was approached by a major contractor and asked if they could represent me, I agreed to this and wrote a letter to my existing sub contractor and told them I would not be renewing any contracts with them at the end of the year and they wrote back accepting this.
a day later my existing sub contractor called me saying they wanted me to sign with them again for the role for the next year , I declined as they are not a major contractor therefore can't represent me. they were banking on me getting chosen and then hoping they will get the sub contract again. I said I had been approached by other companies for roles, they asked me who and I just pulled a name out of my head

They then instantly suspended payments due to me citing breach of contract stating the company I pulled out my head. They called me multiple times harassing me telling me to withdraw from the other company and using underhanded threats.
I ended up being selected for the new contract and thought that was the end of it with them, how wrong I was.

I asked them again to pay for my outstanding invoices to which I received a letter stating they had been approached by another company asking particulars about me and therefore assume its for the same position and state regardless if its for that job or any job within the large business client its immaterial due to post termination restriction, saying they previously stated they would offer the same as the new company offered and they stated the name of the new company in the letter, (1st time I'd ever seen them reference the company)
they are saying they will retain all monies for the rest of the year plus go for compensation for 6 months following post termination and also get me banned from working at the Business client.

I have already heard of others who have faced similar with them in the past
I can attach a copy of the clauses

Thanks for any help

[doconline]

I read on the forum of another individual who has a similar problem under what was called a handcuff clause.
My situation is this.
I am presently contracted to a sub contractor of a major contractor to a particular large Business client.
Up until now any time the contract was renewed it was a case of a simple extension, I signed a new 6 month contract and that was it, however this year the whole framework changed.

No longer was the single major contractor automatically given right to any of the new contracts and in turn the positions were released to all major contractors. In effect the position I have worked in for 12 months has gone out to the world to compete for.

My contract with them terminates on the 31st Dec 2018.
I was approached by a major contractor and asked if they could represent me, I agreed to this and wrote a letter to my existing sub contractor and told them I would not be renewing any contracts with them at the end of the year and they wrote back accepting this.
a day later my existing sub contractor called me saying they wanted me to sign with them again for the role for the next year , I declined as they are not a major contractor therefore can't represent me. they were banking on me getting chosen and then hoping they will get the sub contract again. I said I had been approached by other companies for roles, they asked me who and I just pulled a name out of my head

They then instantly suspended payments due to me citing breach of contract stating the company I pulled out my head. They called me multiple times harassing me telling me to withdraw from the other company and using underhanded threats.
I ended up being selected for the new contract and thought that was the end of it with them, how wrong I was.

I asked them again to pay for my outstanding invoices to which I received a letter stating they had been approached by another company asking particulars about me and therefore assume its for the same position and state regardless if its for that job or any job within the large business client its immaterial due to post termination restriction, saying they previously stated they would offer the same as the new company offered and they stated the name of the new company in the letter, (1st time I'd ever seen them reference the company)
they are saying they will retain all monies for the rest of the year plus go for compensation for 6 months following post termination and also get me banned from working at the Business client.

I have already heard of others who have faced similar with them in the past
I can attach a copy of the clauses

Thanks for any help

Had a quick skim read, I imagine your contract contains a clause to say you can not work with the end client either directly or through a third party / other agency for a period of 6 months.

Are you saying that you are with the end client through 1 agency and now want to go with another one a new contract at that client? Why not just go with your existing agency?

Going back to your problem though, you will probably have to take legal advice, but I imagine they won't be able to withhold monies from your current contract, but will be able to pursue for monies lost if you do sign with a new agency at the same client. They are probably withholding money to offset against their perceived loss for the new contract?

You really need legal advice on this.

[themindseye]

Furthermore, they refuse to deal by email, they only want to do it over the phone.

The wording of the letter I received is as follows:
We have been contacted lately by x company for information relating to what appears to be your new role at Y company, regardless its immaterial to your post termination restrictions.
this confirms willful breach of your own making as we gave you opportunities to reverse your decision and made you aware we would have offered a similar rate to X company. the breach relates to clause x.x.x
knowingly service or otherwise deal with the client, or any group or associate companies of the client except with written permission of the company
We are advised to suspend all further payments and will seek compensation beyond funds currently due to you.
We will also consider an injunction preventing you from working till end June 2019.
If you wish to discuss options to mitigate and prevent us taking legal action we suggest you contact us.

The contract is terminated at the end of the year and all they have is assumptions, I have never once said who the company is or what the role is. They are very unlikely ever to know who the role is unless I tell them who the company is.
Regardless they are not a major contractor so therefor would not have been awarded it anyway as they would have to go through a major contractor to be awarded the contract if successful.
Plus I was lucky to be selected as anyone in the world could apply for the position.

[MonkeysUncle]

[QUOTE=themindseye;2606063]Furthermore, they refuse to deal by email, they only want to do it over the phone.

The wording of the letter I received is as follows:
We have been contacted lately by x company for information relating to what appears to be your new role at Y company, regardless its immaterial to your post termination restrictions.
this confirms willful breach of your own making as we gave you opportunities to reverse your decision and made you aware we would have offered a similar rate to X company. the breach relates to clause x.x.x
knowingly service or otherwise deal with the client, or any group or associate companies of the client except with written permission of the company
We are advised to suspend all further payments and will seek compensation beyond funds currently due to you.
We will also consider an injunction preventing you from working till end June 2019.
If you wish to discuss options to mitigate and prevent us taking legal action we suggest you contact us.
/QUOTE]

As mentioned you need some proper legal advice around this.
From an initial read it seems like there is a restriction in your contract...however it could also be argued that you did email them and they accepted as mentioned in your first post.
Are you sure there is no way they could have won this contract back?

[cosmic]

Legally they can not hold payment from you that you have worked and has been billed. I would emphasise this in an email to the agent and let them know that you are going to contact the client to let them know you are not going to carry on working due to non payment (If you are still working in contract). I would also highly recommend getting a solicitor and send off a letter before action.

They can however take legal proceedings against you if your in breach of the contract where you have a handcuff clause and chase you for money that they would lose out on but they cannot hold money that legally belongs to the company as that is theft and they know it so more than likely will pay it.

Get a solicitor!!! I'm guessing it's a lot of money!

Also are you running as a limited and is this for a different client? Is the end client the same? What does it say in the contract on the handcuff clause?

[themindseye]

Had a quick skim read, I imagine your contract contains a clause to say you can not work with the end client either directly or through a third party / other agency for a period of 6 months.

Are you saying that you are with the end client through 1 agency and now want to go with another one a new contract at that client? Why not just go with your existing agency?

Going back to your problem though, you will probably have to take legal advice, but I imagine they won't be able to withhold monies from your current contract, but will be able to pursue for monies lost if you do sign with a new agency at the same client. They are probably withholding money to offset against their perceived loss for the new contract?

You really need legal advice on this.

I am now with another Agency who has the contract directly with the client.
The agency I am presently with were not allowed to bid for the role they are not a major contractor as it was originally one major contractor who subbed out all these types of roles to different contract companies.

This has now all changed and only major contractors who the business client use were approached to apply and can apply for any roles with the client now.
So effectively If I hadn't been offered the position my present agent would have dropped me anyway but because they think its the same job they are going for my throat.

[themindseye]

Legally they can not hold payment from you that you have worked and has been billed. I would emphasise this in an email to the agent and let them know that you are going to contact the client to let them know you are not going to carry on working due to non payment (If you are still working in contract). I would also highly recommend getting a solicitor and send off a letter before action.

They can however take legal proceedings against you if your in breach of the contract where you have a handcuff clause and chase you for money that they would lose out on but they cannot hold money that legally belongs to the company as that is theft and they know it so more than likely will pay it.

Get a solicitor!!! I'm guessing it's a lot of money!

Also are you running as a limited and is this for a different client? Is the end client the same? What does it say in the contract on the handcuff clause?

This the clause

The Consultancy will itself and will ensure that the Consultant undertakes to and
covenants with the Company that it or he will not at any time during the period of the
Contract or within the period of six months immediately following the termination of
the Contract (howsoever occasioned):

"knowingly service or otherwise deal with the client, or any group or associate companies of the client except with written permission of the company"

[themindseye]

Legally they can not hold payment from you that you have worked and has been billed. I would emphasise this in an email to the agent and let them know that you are going to contact the client to let them know you are not going to carry on working due to non payment (If you are still working in contract). I would also highly recommend getting a solicitor and send off a letter before action.

They can however take legal proceedings against you if your in breach of the contract where you have a handcuff clause and chase you for money that they would lose out on but they cannot hold money that legally belongs to the company as that is theft and they know it so more than likely will pay it.

Get a solicitor!!! I'm guessing it's a lot of money!

Also are you running as a limited and is this for a different client? Is the end client the same? What does it say in the contract on the handcuff clause?

Yes I am a limited company.
The company is also ceasing to trade an the end of the year and after the 1st January I will be an employee of another limited company with a new director

[Old Greg]

Yes I am a limited company.
The company is also ceasing to trade an the end of the year and after the 1st January I will be an employee of another limited company with a new director

Start dunning for the unpaid invoices.

[doconline]

<snip>

I asked them again to pay for my outstanding invoices to which I received a letter stating they had been approached by another company asking particulars about me and therefore assume its for the same position and state regardless if its for that job or any job within the large business client its immaterial due to post termination restriction, saying they previously stated they would offer the same as the new company offered and they stated the name of the new company in the letter, (1st time I'd ever seen them reference the company)
they are saying they will retain all monies for the rest of the year plus go for compensation for 6 months following post termination and also get me banned from working at the Business client.

<snip>

Thanks for any help

I am now with another Agency who has the contract directly with the client.
The agency I am presently with were not allowed to bid for the role they are not a major contractor as it was originally one major contractor who subbed out all these types of roles to different contract companies.

This has now all changed and only major contractors who the business client use were approached to apply and can apply for any roles with the client now.
So effectively If I hadn't been offered the position my present agent would have dropped me anyway but because they think its the same job they are going for my throat.

This is the confusing part. They have said they want to renew your contract in the new year, with the same terms as the new agency, but they don't a contract with the end client for the work?

So they used to be a supplier and now are not? You need legal advice on this, but they should not withhold money from your current contract because the 2 things are separate. Get a solicitor involved, I don't see how the handcuff clause can hold up either as they are no longer able to supply services to the end client, so will not lose any revenue. Again, a solicitor can help get this sorted out.