Taking Restrictive Covenants to a whole new level

[ghostwalker]

So I recently ended a contract early with Client A who was absolutely fine with my termination to go to Client B on the same site. However the agency I had gone through had other ideas and set about trying to hijack my new contract so that I would stay with them. When I said I wanted to go to Client B direct...out came the legal threats of restrictive covenants. Even though I thought they were pushing their luck on the covenant I tried to work with them to avoid any issues as Client B required my skill set. I said I would go through them for the next 6 months as long as at the end of the contract the covenants would no longer be in place. The initial response from them was they were not prepared to do that.

After several weeks of pressure from Client B I thought we had achieved a breakthrough. The agency was agreeing to no restrictive covenants at the end of the 6 months however wanted me to sign a Non Disclosure Agreement. This seemed pretty off, but when I found out from Client B that unknown to me the agency wanted exclusivity over future contract positions with Client B ethics were out the window. At this point both Client B and I refused to take this any further and hoped we can pick up in 6 months.

Four weeks after requesting confirmation from agency the extent to the covenant they are trying to enforce I receive a letter from their legal department. I must reiterate that during this time I had conflicting information from different people at the agency to where and who the covenant would relate to preventing me from working.

It was to my great surprise when the statement in the letter stated; "We can confirm that in accordance with Clause 8, you are restricted from working for any person on whose site you have provided services to under the Contract, in this case, the Ministry of Defence, for a period of 6 months following the termination of the Contract."

The Ministry of Defence ? In total? Every worldwide site?

I had been in contact with APSCO who are supposed to be concerned in how its members conduct themselves and logged a complaint. In an article I found contractorcalculator.co.uk the CEO Ann Swain stated ''Were we to receive a complaint of this type about one of our member agencies, we would come down quite hard on them,''

After speaking with them and showing them the letter from the agency legal department their response was;

From the letter I can see this isn’t specific to one area of the MOD and they have clarified as we requested.


Apologies we can’t really assist further here as it is a commercial matter.

I am fed up and stressed with the bullying and intimidation and the down right despicable way in which I have been treated. Further more trying to prevent me from working in my chosen field in my chosen sector is disgusting.

Consider yourself named and shamed LA International.

[chopper]

Sign a contract with client B and start working. If the agency thinks they have a valid complaint about this, they'll need to go legal. But at least then they'll have to justify to a court how their clause isn't overly restrictive.

The moral of the story is to keep schtum. The onus would then be on the agency to find out what you're doing.

[ghostwalker]

I'm afraid keeping quiet isn't possible with the transfer of Security Clearance.

Even before that happened the agency went snooping around and I hadn't told them where I was going. They call around various contacts and other contractors to find out information.

My colleague who left another agency at the same time to go to the same new contract had none of this.

[Lance]

I'm afraid keeping quiet isn't possible with the transfer of Security Clearance.

You sure about that?
Are LA International the sponsor for your clearance? If not, then they would never know as they don't need to know. The MoD are almost certainly the sponsor, and as you are moving agency but staying with the MoD then no transfer is needed anyway.

Bit late though as you've told them.

[ghostwalker]

LA are the sponsor as far as I am aware. I wasn't working for the MOD directly but to a commercial company providing a service to the MOD. Likewise the new contract was with a commercial company providing a service.

[Lance]

LA are the sponsor as far as I am aware. I wasn't working for the MOD directly but to a commercial company providing a service to the MOD. Likewise the new contract was with a commercial company providing a service.

OK.
In my experience it was always the end client (MoD in this case) or the approved supplier to the end client (HP, CSC, BT, etc.) who'd be the sponsor. Never agencies as they are simply body shopping people.
A lot of agencies try to create the illusion they are more than a body shop, but they almost always aren't.

At my last SC cleared role (for HP), LA International had contractors on site but the sponsor was always HP. I suppose it's not impossible they could become a sponsor but they would have to have some very clear, detailed contracts, with the end client to be able to do so, and if they did then all agencies would want a piece of that pie. For those reasons I'm skeptical; but as the list of sponsors isn't available publicly, I cannot back that up with any evidence.

[ghostwalker]

OK.
In my experience it was always the end client (MoD in this case) or the approved supplier to the end client (HP, CSC, BT, etc.) who'd be the sponsor. Never agencies as they are simply body shopping people.
A lot of agencies try to create the illusion they are more than a body shop, but they almost always aren't.

At my last SC cleared role (for HP), LA International had contractors on site but the sponsor was always HP. I suppose it's not impossible they could become a sponsor but they would have to have some very clear, detailed contracts, with the end client to be able to do so, and if they did then all agencies would want a piece of that pie. For those reasons I'm skeptical; but as the list of sponsors isn't available publicly, I cannot back that up with any evidence.

I think the point of my post is being missed here because it's about the conduct of the agency. They are not just trying to stop me working for a client or even just the whole site but for the whole sector. This doesn't seem normal to go this far does it? Forgive my nievity if it is.

[Lance]

I think the point of my post is being missed here because it's about the conduct of the agency. They are not just trying to stop me working for a client or even just the whole site but for the whole sector. This doesn't seem normal to go this far does it? Forgive my nievity if it is.

If this is a personal restrictive covenant (i.e. against you rather than your LTD), then it needs to be sufficiently narrow to be legal.
So it won't hold water blocking you from a whole sector worldwide.

Usual ones that work could be, "for customer A, for up to 6 months". Or maybe "certain sector, in a 40 mile radius, for 6 months".
The wider the restriction the less likely it can hold water.

There are also lots of other things like they have to prove a loss, they also need evidence that you have breached the covenant.

Let's be clear though. If you ditch the agency and go direct to their client, and they can prove it, they do have a case. If I read your original post correctly then you are changing client as well as agency. On that basis I doubt they have a case but the devil is in the detail.

EDIT: You could talk to a lawyer. It costs around £1500 as a fixed price to make these go away

[StillBreathing]

LA are the sponsor as far as I am aware. I wasn't working for the MOD directly but to a commercial company providing a service to the MOD. Likewise the new contract was with a commercial company providing a service.

I'm guessing you're not quite sure who the sponsor is? Did you do the SC transfer form or was it done for you?
You can easily find out who's currently holding your SC and who the sponsor was. Working on MoD account doesn't mean your SC is with MoD, it could be held with the client if it's a ListX site. If your SC needs to be transferred when moving to ClientB then ClientA is your sponsor not LA.

If I understand correctly your contract is with LA and the client is ClientA not MoD? I'd check your contract to see whether the handcuffs extend onto the client of ClientA, which in this case is MoD.

[ghostwalker]

I'm guessing you're not quite sure who the sponsor is? Did you do the SC transfer form or was it done for you?
You can easily find out who's currently holding your SC and who the sponsor was. Working on MoD account doesn't mean your SC is with MoD, it could be held with the client if it's a ListX site.

If I understand correctly your contract is with LA and the client is ClientA not MoD? I'd check your contract to see whether the handcuffs extend onto the client of ClientA, which in this case is MoD.

I did not do the transfer and I believe LA are a ListX site.

The clause states "any person whose site my company and its personnel have performed services on". Taken literally that would mean the MOD and every commercial company currently supplying services.

I have just received an email update from APSCO after I quoted what their CEO had said from the article. LA are now claiming that it was worded wrong and should just be the site I was on. This at least is something I can work with however I still think they are over reaching on their covenant.