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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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I am a subcontractor for a medium sized audit firm and am already

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I am a subcontractor for a medium sized audit firm and am already working on a client's site, there is a contract for services which exists between my limited liability company and their limited liability partnership (the Agreement). This Agreement is 6 months duration but at present they have only guaranteed 4 weeks work and it is possible that they would offer me no further work under the Agreement before it terminates in November 2014 (effectively placing me in a standby position). The good news is that the Agreement explicitly allows me to undertake other engagements during the period of the Agreement.

The audit firm are asking me to sign a further document entitled "Personal Undertaking" (Signatory text reads "Executed and delivered as a DEED by") and to get it witnessed. The document is very clear that I will not be rendered an employee of their firm and that at all times I am an "independent contractor".

Almost the entire DEED document appears acceptable to me for purpose of agreeing except for a couple of clauses that relate to restrictive practices that concern me. The DEED makes a few definitions in this respect as follows:

1) "Relevant Period" meaning a period of up to 12 months before termination of the Agreement,

2) "Restricted Period" which covers the duration of the Agreement and a period of 6 months after and

3) "Restricted Client" which is defined as a client of the audit firm with whom I "have had contact or provided services in relation to during the Relevant Period.

The DEED then goes on to say that during the restricted period I will not:
"offer or provide any services in competition with or substitution for the Firm to any Restricted Client or introduce or facilitate the introduction of any Restricted Client to any third party that may provide such services;"

or "offer or provide any services similar to or the same as the Services to the Restricted Client"

My questions are as follows:

1) What is the most likely reason they chosen the format of a DEED and what is the significance to me?

2) How could the DEED be used to prevent me from having interviews and accepting other roles with the current client during the Restricted Period?

3) Given that I could be on ‘standby’ for a period of 5 months after the current 4 weeks work, the restricted period would attempt to stop me working for the current client for a period of up to 11 months, should they decide they want my services. It could genuinely be the case however that an independent recruitment agency could contact me in relation to consultancy with the current client. This has happened many times over the past 15 years and I have even interviewed with this client on a previous occasion some years ago for a consulting role that I did not get at the time. Does the small of work with the current client or my previous exposure to them effect the terms of the DEED?

4) When would my services be defined as “competition” or “substitution”? The audit firm is using my services as a risk specialist because they don’t have the internal skills and experience to match my services? Moreover given the temporary nature of the client’s requirement the audit firm cannot justify hiring a permanent employee, there simply is not enough work to justify the salary.

5) What would constitute “similar” services? At present I am consulting to the client’s audit department in respect of market risk. If an independent agency contacted me in respect of consulting directly with the firms credit risk department would that constitute a similar service? They’re both risk department but obviously very different , having totally separate management structures, independent governance and separate specialist employees.

Thank you.
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

Are you being forced to sign this Deed or is it optional?
Customer: replied 3 years ago.


I am being told that if I do not sign they definitely will not offer me any more work, so it's become a condition of future business.

Expert:  UKSolicitorJA replied 3 years ago.
Thank you.

So, you are under pressure to sign the Deed.

I would respond to your queries as follows:

1) What is the most likely reason they chosen the format of a DEED and what is the significance to me? Deeds are chosen when there is no consideration being given, from a practical point for you, it has the same signficance as an Agreement.

2) How could the DEED be used to prevent me from having interviews and accepting other roles with the current client during the Restricted Period? They could go to court to seek orders stopping you from accepting other roles with the current clients.

3) Given that I could be on ‘standby’ for a period of 5 months after the current 4 weeks work, the restricted period would attempt to stop me working for the current client for a period of up to 11 months, should they decide they want my services. It could genuinely be the case however that an independent recruitment agency could contact me in relation to consultancy with the current client. This has happened many times over the past 15 years and I have even interviewed with this client on a previous occasion some years ago for a consulting role that I did not get at the time. Does the small of work with the current client or my previous exposure to them effect the terms of the DEED? The Deed would stop you from working for such clients as there are no execeptions in the Deed.

4) When would my services be defined as “competition” or “substitution”? The audit firm is using my services as a risk specialist because they don’t have the internal skills and experience to match my services? Moreover given the temporary nature of the client’s requirement the audit firm cannot justify hiring a permanent employee, there simply is not enough work to justify the salary. Competition or substitution simply means you providing the same services that are provided by them or instead of them providing the services, you are called in to provide them. It is a wide restriction.

5) What would constitute “similar” services? At present I am consulting to the client’s audit department in respect of market risk. If an independent agency contacted me in respect of consulting directly with the firms credit risk department would that constitute a similar service? They’re both risk department but obviously very different , having totally separate management structures, independent governance and separate specialist employees. Similar serivces cover all services which are defined as "Services" in your current contract with them.

Hope this helps
Customer: replied 3 years ago.

I forgot to mention. In one email they have also stated they may withhold payment for the work I've already done if I don't sign the deed. Does this kind of pressure/force change the status of the agreement in anyway?

Expert:  UKSolicitorJA replied 3 years ago.
No, they cannot withhold payment if you refuse to sign the Deed and you could sue them for breach of contract if they withheld payment.

Hope this helps
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