Contracting woes

onefortynine

Hi all,

I am working in a large medical device company through an agency and I am fed up with their poor attitude and slow response. They take 10% of my wages (used to be 20% but I renegotiated after 2 and a half years). They invoice the company and then I have an accountancy company that invoices them and they pay me after doing my taxes.
But they also have a clause in the contract that I cannot work for the medical device company directly or through an agency for 6 months after I leave them. They have me over a barrel on this and when I tried to break away from them they threatened to invoke a penalty on the company.

Is anyone aware of a way to get out of this? It was originally a 6 month contract but has been renewed a few times and I'm there nearly 3 years now.

Regards,
Niall.

ifah

Sounds reasonable to me. It looks like a standard setup where you are contracting via an Umbrella company. Six months clause is pretty standard also.

What is your issue ? The fact that the agency are adding 10% or the 6 month no-compete clause. If you want to work for the medical device company direct then get them to fight for you. Agency don't have to give anything up as you've signed the contract.

Your best bet may be to try negotiate out of the contract before signing next time.

Eugene Norman

No compete clauses are hard to enforce.

ifah

Eugene Norman wrote: »

No compete clauses are hard to enforce.

They don't need to be enforced - if the company are not willing to break with the agency then you're in a no-win situation. I've seen very few companies who are willing to force an agency to allow them take someone on direct.

Graham

Oh dear, classic newbie contractor mistake. Mistaking the agency margin as part of the 'wage'.

I'll start with the obvious. You won't 'get out of' your contract unless you walk away for 6 months. Even if you do decide you're prepared to risk a court case, the medical devices company quite properly won't. I wouldn't be surprised if the contract between the medical device company and the agency mentions a fee for employing you directly, I also wouldn't be surprised if that fee was around the cost of contracting you in for 6months.

I'm assuming you agreed a rate with the agency before you started your contract, I'm assuming that rate was paid. You mentioned you renegotiated that rate after 2.5yrs and I'm assuming that new rate continues to be paid. For some bizarre reason you appear to be of the belief that the rate the agency negotiated with the medical devices company belongs to you, it doesn't so you should really stop torturing yourself.

Now none of that is to suggest you shouldn't try and renegotiate your rate with the agency at the next renewal but to be honest I can't imagine they would reduce their margin much below 10%.

onefortynine

Graham wrote: »

Oh dear, classic newbie contractor mistake. Mistaking the agency margin as part of the 'wage'.

For some bizarre reason you appear to be of the belief that the rate the agency negotiated with the medical devices company belongs to you, it doesn't so you should really stop torturing yourself.

That's pretty condescending. I've been contracting for years and never had this clause enforced before. I'm unhappy with them because they left me with no wages last week after delaying a correction on my time sheets and now I'm abroad for work and broke. Not the first time they dragged their heels. It took a month for them to get the right start date on my renegotiated contract

Graham

onefortynine wrote: »

That's pretty condescending. I've been contracting for years and never had this clause enforced before.

Your post gave me the impression you were new to this. I've been contracting for years and I've never once see an agency knowingly or willingly allow a contractor/client to cut them out unless someone has paid for it.

onefortynine wrote: »

I'm unhappy with them because they left me with no wages last week after delaying a correction on my time sheets and now I'm abroad for work and broke

That's bang out of order on the part of the agency and certainly explains the tone of your OP. It's an absolutely rotten position to be left in and is guaranteed to induce a sense of vulnerability/exposure. I've been there and even the thought of it sends shivers down the spine.

Have the agency agreed to expedite the delayed payment or at least arrange a stop-gap payment while things are sorted? Does the client know what the position is?

This is one of the few times it may be worth telling the agency that if it's not sorted by XX day, you're going to have to pull out of the site and go home until everything is sorted. Don't say it like it's a threat, let them know they've left you with no alternative. I've only done that twice (in a fairly long contracting career) and both times it's got fairly immediate results.

Given your current situation, this isn't immediately relevant but it's worth keeping in mind for the future. Contracting directly to a client (particularly a large company) rarely results in regular timely payments.

Best of luck, I hope it's all sorted quickly.

Gloomtastic!

I've run into this problem in a previous life (in the uk) and I was advised by a barrister that no court will allow a company deny you the right to make a living, despite whatever no-compete clause you've signed. However, if your previous employer can prove you took sensitive information - commercial or otherwise - from them to your new employer then they could prohibit you from working there.

Gloomtastic!

I've run into this problem in a previous life (in the uk) and I was advised by a barrister that no court will allow a company deny you the right to make a living, despite whatever no-compete clause you've signed. However, if your previous employer can prove you took sensitive information - commercial or otherwise - from them to your new employer then they could prohibit you from working.

Graham

Gloomtastic! wrote: »

I've run into this problem in a previous life (in the uk) and I was advised by a barrister that no court will allow a company deny you the right to make a living, despite whatever no-compete clause you've signed. However, if your previous employer can prove you took sensitive information - commercial or otherwise - from them to your new employer then they could prohibit you from working.

You have to remember this isn't an employment contract, for the OP it's a contract between his company and the agency. There's also the contract between the agency and the end client to think about too.

Usually the client/agency contract includes provision for a significant payment should the client engage the contractor directly.


Here's how these things normally go.

Contractor leaves agency and starts billing client company directly.
Agency send client company an invoice for agreed (contracted) personnel introductions. Usually in the region of 50% of the first years gross salary + benefits which might equate to an invoice of €50k - €90k.
Client company takes legal advice.
Contractor is ejected.
Client company attempts to negotiate nicely with the agency.

Gloomtastic!

Graham wrote: »

You have to remember this isn't an employment contract, for the OP it's a contract between his company and the agency. There's also the contract between the agency and the end client to think about too.

Usually the client/agency contract includes provision for a significant payment should the client engage the contractor directly.


Here's how these things normally go.

Contractor leaves agency and starts billing client company directly.
Agency send client company an invoice for agreed (contracted) personnel introductions. Usually in the region of 50% of the first years gross salary + benefits which might equate to an invoice of €50k - €90k.
Client company takes legal advice.
Contractor is ejected.
Client company attempts to negotiate nicely with the agency.

Client company could also ask Agency if they value the business they put their way and whether suing your best client is good for their ongoing working relationship? :rolleyes:

Graham

Gloomtastic! wrote: »

Client company could also ask Agency if they value the business they put their way and whether suing your best client is good for their ongoing working relationship? :rolleyes:

That's an interesting perspective, do you have many 'best clients' that have tried to renege on a contract and shaft you financially in the process?

In the real world it just doesn't happen very often because most clients wouldn't even consider attempting to cut out an agency.

Jim2007

Graham wrote: »

Your post gave me the impression you were new to this. I've been contracting for years and I've never once see an agency knowingly or willingly allow a contractor/client to cut them out unless someone has paid for it.

In over 20 years contracting, my experience has been the same. Also most clients will not want to get involved once the agency starts objecting, unless they are willing to pay the agency off.

VincePP

onefortynine wrote: »

That's pretty condescending. I've been contracting for years and never had this clause enforced before. I'm unhappy with them because they left me with no wages last week after delaying a correction on my time sheets and now I'm abroad for work and broke. Not the first time they dragged their heels. It took a month for them to get the right start date on my renegotiated contract

You won't "see" it enforced, but if the contracting company has a relationship with the company you are contracted to, you will be the loser.

Also find out why the company is using contractors - many use it becasue they are in an industry that is cylical and this allows for employment costs to be managed better. Costs more in short term, but less in long term. e.g. if it was a drug compnay and the drug went out of patent, it would be easy to simply not renew some contractors.

However, if they've left you with no wages for a week, check your contract. If there's a clause about prompt payment, then it would be them who broke the contract and the non-compete clause doesn't come into it.

Another option is to simply keep an eye out for positions in other companies - in some areas you will have clusters of a similar industry. Even suggesting that you may not renew at end of current period and looking at other options, may bring a response from the company as thankfully specialist employees are not too easy to locate at present.


So really the best idea is look at where you will be in 4/5 months when contract is up and plan for that time rather than be hasty.

Little hints that you are planning to give up contracting in favour of full contracted employment - even ask whoever is your manager if you can use their name as a reference and at same time stae you'd love to be able to stay with current company, but there are issues with the contract that stops you. (hence you are not being negative with current employer rather its an issue with contracted work and the contracting company)