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About concluding contracts with companies
Thread poster: Maya Gorgoshidze

Maya Gorgoshidze  Identity Verified
Georgia
Local time: 19:47
Member (2004)
English to Georgian
+ ...
Oct 16, 2005

Dear translators,

In my life I have signed many contracts, but I have never faced such conditions. Recently I was contacted by a XXXXXXX company which offered me a job for not very impressive rate, but something was attractive in it – I had to translate in overage 500 words per day during about 1 year and the company would pay me periodically for every 5000 translated words. Of course the job seemed to be not exhausting at all and I would agree to translate for them despite the low rate, but I think something was wrong with the Non Disclosure Form, which I could not decide to sign. It said:

“.......................
I hereby declare & undertake ....

Not to contact directly and not to accept or solicit work contracts from:

a. XXXXXXX’s clients to whom I have been introduced by XXXXXXX, for a period of ten years from the date of such introduction ; and

b. Any other person or entity to whom I have been introduced in the course of performing services for XXXXXXX, for a period of ten years from the date of such introductions.
.................................”

The XXXXXXX company told me that I had to take an oath that I would NEVER contact THEIR CLIENT directly in the future and THEIR CLIENT would sign a similar contract that they would NEVER contact me, i.e. they would know my name and would never contact me.

What do you think, should I sign such contract for TEN years, taking into account that XXXXXXX refuses me to tell the name of THEIR CLIENT (or maybe CLIENTS, there is not specified the number of them)? I feel something was wrong with the conditions XXXXXX offered me. Or maybe I do not understand anything? What do you think about this?

Thank you in advance for your reply.
Kind regards,
Maya


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Evert DELOOF-SYS  Identity Verified
Belgium
Local time: 16:47
Member
English to Dutch
+ ...
No, I wouldn't sign that Oct 16, 2005

Maya Gorgoshidze wrote:

Dear translators,

In my life I have signed many contracts, but I have never faced such conditions. Recently I was contacted by a XXXXXXX company which offered me a job for not very impressive rate, but something was attractive in it – I had to translate in overage 500 words per day during about 1 year and the company would pay me periodically for every 5000 translated words. Of course the job seemed to be not exhausting at all and I would agree to translate for them despite the low rate, but I think something was wrong with the Non Disclosure Form, which I could not decide to sign. It said:

“.......................
I hereby declare & undertake ....

Not to contact directly and not to accept or solicit work contracts from:

a. XXXXXXX’s clients to whom I have been introduced by XXXXXXX, for a period of ten years from the date of such introduction ; and

b. Any other person or entity to whom I have been introduced in the course of performing services for XXXXXXX, for a period of ten years from the date of such introductions.
.................................”

The XXXXXXX company told me that I had to take an oath that I would NEVER contact THEIR CLIENT directly in the future and THEIR CLIENT would sign a similar contract that they would NEVER contact me, i.e. they would know my name and would never contact me.

What do you think, should I sign such contract for TEN years, taking into account that XXXXXXX refuses me to tell the name of THEIR CLIENT (or maybe CLIENTS, there is not specified the number of them)? I feel something was wrong with the conditions XXXXXX offered me. Or maybe I do not understand anything? What do you think about this?

Thank you in advance for your reply.
Kind regards,
Maya


I wouldn't go for this. Ten years? Make that one, or simply decline. Where will they be in ten years from now? Where will you be standing in life in ten years from now?


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Peter Bouillon  Identity Verified
Germany
Local time: 16:47
Member (2005)
French to German
+ ...
I wouldn't be keen on the business relationship Oct 16, 2005

Maya Gorgoshidze wrote:
The XXXXXXX company told me that I had to take an oath that I would NEVER contact THEIR CLIENT directly in the future and THEIR CLIENT would sign a similar contract that they would NEVER contact me, i.e. they would know my name and would never contact me.
or TEN years

What do you think about this?[/quote]

Well, they don't seem to have any sense as to what is just and reasonable, do they. Is this mindset bound to be strictly confined to just their terms of business? What if this kind of thinking also comes up

  • in their their payment demeanor,
  • in their expectations for unpaid side work,
  • in their co-operation to clear up vocabulary issues etc.?


One common situation where a translator might want to contact the end client is when the translator's invoices aren't paid by the agency. This makes one suspect that the agency in question has perhaps experience of translators reacting this way; however, instead of improving their payment practices, they preferred to draft up unreasonable terms of business to bind the translators' hands.

P.

[Edited at 2005-10-16 10:39]


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Lucinda  Identity Verified
Local time: 12:47
Member (2002)
Dutch to English
+ ...
Run away, Maya! Oct 16, 2005

As fast as you can in the opposite direction.

To me it does not feel right at all and I think to you as well.

Greetings from sunny Suriname!
Lucinda


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Kevin Kelly  Identity Verified
Local time: 11:47
Member (2005)
Russian to English
+ ...
Run, Maya, run like the wind! Oct 16, 2005

Lucinda is right.

Kevin


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Marijke Singer  Identity Verified
United Kingdom
Local time: 15:47
Dutch to English
+ ...
Another perspective Oct 16, 2005

Although I agree with the previous postings, you could also see it in another way. Since you do not know who XXX is, should you in the next 10 years (or 100 for that matter) contact XXX, you would not have known and therefore would not be in breach of contract. What I am trying to say is that since there is no way of enforcing this clause, you can happily sign since it would never stand up in a court of law. I do not think they would ever get their customer to sign the contract that says that they would ever contact you. Why should they?

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Maya Gorgoshidze  Identity Verified
Georgia
Local time: 19:47
Member (2004)
English to Georgian
+ ...
TOPIC STARTER
Thank you! Oct 16, 2005

Lucinda Hollenberg wrote:

As fast as you can in the opposite direction.

To me it does not feel right at all and I think to you as well.

Greetings from sunny Suriname!
Lucinda


Thanks everybody for your comments!

This was my very first thought when I read these clauses.
Thank you for you replies! Now I have no doubt that I was right when I declined to sign the Non Disclosure Form.

Sincere regards,
Maya


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Maya Gorgoshidze  Identity Verified
Georgia
Local time: 19:47
Member (2004)
English to Georgian
+ ...
TOPIC STARTER
Regarding this perspective Oct 16, 2005

Marijke Singer wrote:

Although I agree with the previous postings, you could also see it in another way. Since you do not know who XXX is, should you in the next 10 years (or 100 for that matter) contact XXX, you would not have known and therefore would not be in breach of contract. What I am trying to say is that since there is no way of enforcing this clause, you can happily sign since it would never stand up in a court of law. I do not think they would ever get their customer to sign the contract that says that they would ever contact you. Why should they?


Dear Marijke,

I am afraid that XXXXXX (the company, which contacted me) having such agreement can use it with other end clients too (which I will never know). So I may lose some potential clients. Do you think my apprehension is groundless?

Regards,
Maya


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Ford Prefect  Identity Verified
Burkina Faso
Local time: 15:47
German to English
+ ...
Tell them to drop the clause Oct 17, 2005

Well, this is a rather poorly worded contract. If you agree to it, then I suspect the ten year rule may well be enforceable in court (in much of the EU for sure), however unfair it seems. I would agree however, if they refuse to tell you who the client is, you can't possibly know you shouldn't approach them -"introduction" is the key. As you know, a lot of the time it is obvious from the text who the client is anyway.

The non competition clauses I have signed are for one or two years, counted from the date of termination of the agreement - so in theory if you keep working for an agency this could run for a lot longer than 10 years, but this seems a much fairer deal. After all, the agency has done the promotion, advertising, client liaison, all that business crap, and all you have to do is focus on what you do best - the translation, so it would be unfair of you to get 5 clients through an agent and then walk off with them all to yourself the next day. You still have a relatively short period of time then in which you are locked out of approaching clients you knew about. If you sign a 10 year non-competition clause, there is nothing to stop the agency sending you a client list on the day you stop working for them, and that could cause you real trouble.

If I were you I would negotiate that clause out or refuse the job.


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Anne Gillard-Groddeck  Identity Verified
Local time: 16:47
German to English
Non-solicitation clauses Oct 18, 2005

As a general rule, clauses of the type you describe are anti-competitive in that they represent a restraint of trade. However, that having been said, such clauses, known as non-solicitation clauses, are upheld by the courts to a certain extent in that an employer is recognised as having what is known as "legitimate business interests".

In order for such clauses to be enforceable they must be reasonable, taking account of the interests of the parties and the general public.

One contributor further up expressed the opinion that the clause was not fair and just and in my opinion it is likely that a court would take a similar view. At any rate the onus lies with the employer to prove that the clause is reasonable.

In some jurisdictions (such as England and Wales) if any part of such a clause is unreasonable or ambiguous it will be constructed against the interests of its author. The clause will fail completely. It will be void and unenforceable.

Courts in other jurisdictions (some American courts for instance) may attempt to reconstruct the clause so as to achieve a fair and reasonable outcome.

Usually such clauses between employers and employees (leaving aside for the moment the issue of your being an independent contractor) relate to a post-employment period. During the period of actual employment an employee is by law obliged to exercise a duty of care towards the employer and act in good faith (which includes not poaching customers). It is when the period of employment ends that this obligation ends so that such clauses, i.e. a post-employment restrictive covenant, may, if fair and reasonable, kick in.

Reasonable means reasonable in terms of subject matter, time and geographical location. It must also give due consideration to the public interest.

That having been said, customers do fall under "legitimate business interests".

Taking the aspect of time, a post-employment ban on contacting customers for a period of ten years is more than likely to be unreasonable. Even a period of two years has been held to be unreasonable by the courts of England and Wales in the circumstances of the particular case.

Your case is unusual in that you are not allowed to contact customers for a period of ten years AS FROM THE DATE OF INTRODUCTION. The clause lacks precision in that it fails to take account of the difference between the legal duty of an employee to act in good faith and the right of a person, after a period of employment, to act in his/her own interests as a market participant. The clause is therefore indeed badly drafted and ambiguous.
Furthermore it goes on to impose a ban on contacting ANYONE you have been introduced to in the course of providing services. Who is this likely to include? It is essential that restrictive covenants are drafted in such a way that each part is capable of standing independently of other parts and that they state that this is the intention of the contracting parties. Standard, sweeping clauses which fail to take account of the circumstances of the individual case are likely to be struck down.


Despite the legal-sounding language (which really is just empty waffle), it is unlikely that this clause was drafted by a lawyer, as it fails to draw vital distinctions and clearly set out the boundaries of the obligation.

Asking one's customers to "take an oath" is bizarre.

A further point to be considered is "the nature of the employment". The higher the status of an employee (say someone in upper management earning a handsome salary), the more likely it is that a restrictive covenant will be enforceable. Working for someone as an independent contractor is a very loose form of "employment". Contracts are, more often than not, not freely negotiated, but dictated on a "take it or leave it basis", which means that restrictive covenants are more than likely to be considered unreasonable.
The employer of a translator working as an independent contractor has virtually no obligations other than to pay the bills on time, an obligation which, judging by this website, a large number are not capable of fulfilling. This considerably weakens the independent contractor's "duty of care", if not eradicating it entirely.

Furthermore even an employer of a regular employee has no proprietary right over the personality, temperament or inter-personal skills of an employee and if clients are held by nothing else than such skills, consequently no proprietary right over these clients, once the contract of employment has come to an end. Employers can nevertheless protect themselves against customers being poached by a former employee provided that the clauses in question are carefully drafted, i.e. contain no more than what is reasonable in order to protect legitimate business interests and clearly identify the customers in question.

A final point is that restrictive clauses are void in the case of wrongful dismissal. It is much easier for an employee to prove wrongful dismissal than an independent contractor. An independent contractor might be deprived of further work merely by seeking payment of an unpaid bill. So it is difficult to see how an employer (who bears the burden of proof in the case of restrictive convents) will be able to show that it has not acted arbitrarily.

Whether you sign such a contract after all this has been said is naturally up to you. A translator, or indeed anyone else faced with such a purported contract, naturally faces a dilemma in that he/she never knows whether a restrictive covenant of this type will actually be enforceable and many lawyers may not be certain either. If you are really interested in this work you can consult a lawyer in your jurisdiction. You can try to redraft the clause so that it is reasonable and acceptable for you and clearly relates to a period of post-employment.

However in view of the amateur approach of this agency and its obviously repressive attitude to its independent contractors (despite its legitimate right to protect its business interests), I personally would advise shunning this deal altogether, provided that you have alternative sources of income.


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Evert DELOOF-SYS  Identity Verified
Belgium
Local time: 16:47
Member
English to Dutch
+ ...
Well said, Anne! Oct 18, 2005

Anne Gillard-Groddeck wrote:

As a general rule, clauses of the type you describe are anti-competitive in that they represent a restraint of trade. However, that having been said, such clauses, known as non-solicitation clauses, are upheld by the courts to a certain extent in that an employer is recognised as having what is known as "legitimate business interests".

In order for such clauses to be enforceable they must be reasonable, taking account of the interests of the parties and the general public.

One contributor further up expressed the opinion that the clause was not fair and just and in my opinion it is likely that a court would take a similar view. At any rate the onus lies with the employer to prove that the clause is reasonable.

In some jurisdictions (such as England and Wales) if any part of such a clause is unreasonable or ambiguous it will be constructed against the interests of its author. The clause will fail completely. It will be void and unenforceable.

Courts in other jurisdictions (some American courts for instance) may attempt to reconstruct the clause so as to achieve a fair and reasonable outcome.

Usually such clauses between employers and employees (leaving aside for the moment the issue of your being an independent contractor) relate to a post-employment period. During the period of actual employment an employee is by law obliged to exercise a duty of care towards the employer and act in good faith (which includes not poaching customers). It is when the period of employment ends that this obligation ends so that such clauses, i.e. a post-employment restrictive covenant, may, if fair and reasonable, kick in.

Reasonable means reasonable in terms of subject matter, time and geographical location. It must also give due consideration to the public interest.

That having been said, customers do fall under "legitimate business interests".

Taking the aspect of time, a post-employment ban on contacting customers for a period of ten years is more than likely to be unreasonable. Even a period of two years has been held to be unreasonable by the courts of England and Wales in the circumstances of the particular case.

Your case is unusual in that you are not allowed to contact customers for a period of ten years AS FROM THE DATE OF INTRODUCTION. The clause lacks precision in that it fails to take account of the difference between the legal duty of an employee to act in good faith and the right of a person, after a period of employment, to act in his/her own interests as a market participant. The clause is therefore indeed badly drafted and ambiguous.
Furthermore it goes on to impose a ban on contacting ANYONE you have been introduced to in the course of providing services. Who is this likely to include? It is essential that restrictive covenants are drafted in such a way that each part is capable of standing independently of other parts and that they state that this is the intention of the contracting parties. Standard, sweeping clauses which fail to take account of the circumstances of the individual case are likely to be struck down.


Despite the legal-sounding language (which really is just empty waffle), it is unlikely that this clause was drafted by a lawyer, as it fails to draw vital distinctions and clearly set out the boundaries of the obligation.

Asking one's customers to "take an oath" is bizarre.

A further point to be considered is "the nature of the employment". The higher the status of an employee (say someone in upper management earning a handsome salary), the more likely it is that a restrictive covenant will be enforceable. Working for someone as an independent contractor is a very loose form of "employment". Contracts are, more often than not, not freely negotiated, but dictated on a "take it or leave it basis", which means that restrictive covenants are more than likely to be considered unreasonable.
The employer of a translator working as an independent contractor has virtually no obligations other than to pay the bills on time, an obligation which, judging by this website, a large number are not capable of fulfilling. This considerably weakens the independent contractor's "duty of care", if not eradicating it entirely.

Furthermore even an employer of a regular employee has no proprietary right over the personality, temperament or inter-personal skills of an employee and if clients are held by nothing else than such skills, consequently no proprietary right over these clients, once the contract of employment has come to an end. Employers can nevertheless protect themselves against customers being poached by a former employee provided that the clauses in question are carefully drafted, i.e. contain no more than what is reasonable in order to protect legitimate business interests and clearly identify the customers in question.

A final point is that restrictive clauses are void in the case of wrongful dismissal. It is much easier for an employee to prove wrongful dismissal than an independent contractor. An independent contractor might be deprived of further work merely by seeking payment of an unpaid bill. So it is difficult to see how an employer (who bears the burden of proof in the case of restrictive convents) will be able to show that it has not acted arbitrarily.

Whether you sign such a contract after all this has been said is naturally up to you. A translator, or indeed anyone else faced with such a purported contract, naturally faces a dilemma in that he/she never knows whether a restrictive covenant of this type will actually be enforceable and many lawyers may not be certain either. If you are really interested in this work you can consult a lawyer in your jurisdiction. You can try to redraft the clause so that it is reasonable and acceptable for you and clearly relates to a period of post-employment.

However in view of the amateur approach of this agency and its obviously repressive attitude to its independent contractors (despite its legitimate right to protect its business interests), I personally would advise shunning this deal altogether, provided that you have alternative sources of income.



You took the words right out of my mouth

Excellent reply!


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Maya Gorgoshidze  Identity Verified
Georgia
Local time: 19:47
Member (2004)
English to Georgian
+ ...
TOPIC STARTER
Very useful clarification Oct 18, 2005

Thank you, Anne, for your comprehensive and useful reply!
Thank you so much for your clarification!
I really appreciate your comment.
Sincere regards,
Maya


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