Non-compete / conflict of interest agreement: is it negotiable?
Thread poster: Aditya Ikhsan Prasiddha

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 05:27
Member (2012)
English to Indonesian
Jul 31, 2013

Dear colleagues,

I was about to sign a contract but then I found this peculiar point that obliges me to provide written notice in advance to the client if I am, or will be, providing services related to [my expertise] to any "[client] Competitor" whether direct or indirect. Then the client will assess whether the situation could cause conflict of interest or potential for compromise of its confidential information as determined in its sole discretion. I don't know what to do because I really want this job but I don't want to lose it just because I've been working with this so-called competitor (which yields smaller fortune compared to what this potential client could bring). Now the questions:

1. What do you think is the best way to get the new client and retain the old one? Can I try to assure this potential client that there will be no conflict of interest and disclosure of any confidential information?
2. These two companies are not really direct competitor (like Myspace vs Facebook) but more like Facebook and Twitter. To what extent does this kind of policy usually apply?
3. Don't you think this policy is a bit harsh? If you specialize in a particular area, of course you are going to work with clients who are competitors to each other in one way or another.

Thank you!


 

Josephine Cassar  Identity Verified
Local time: 00:27
Member (2012)
Italian to English
+ ...
Obliges me to give written notice Jul 31, 2013

I understand your situation and conflicting feeling in this affair: i sympathise with you.
The thing is- if you tell them that you are also going to translate for another company in the same area of expertise, are they likely to withhold their consent- you become dependent on it once you sign such a thing. Try to negotiate this part- tell them you are confused about it first, then see what they come up with, than decide as limiting you is not fair.
I am a bit in the same situation with regards to a company that sent me part of a large book to translate, with a long, long contract, and an abysmal rate-$0.008. I clarified some points with them; they just won't budge from that rate; I would really love to do the translation but not at that rate, certainly. It does not cover PayPal, tax, costs, etc.
I did not really understand if this was a new client with whom you never worked before, but who pays more than the previous one. I don't know, but I do not like people who limit me so much. Hope this helps.


 

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 05:27
Member (2012)
English to Indonesian
TOPIC STARTER
New client Jul 31, 2013

Josephine Cassar wrote:

I understand your situation and conflicting feeling in this affair: i sympathise with you.
The thing is- if you tell them that you are also going to translate for another company in the same area of expertise, are they likely to withhold their consent- you become dependent on it once you sign such a thing. Try to negotiate this part- tell them you are confused about it first, then see what they come up with, than decide as limiting you is not fair.
I am a bit in the same situation with regards to a company that sent me part of a large book to translate, with a long, long contract, and an abysmal rate-$0.008. I clarified some points with them; they just won't budge from that rate; I would really love to do the translation but not at that rate, certainly. It does not cover PayPal, tax, costs, etc.
I did not really understand if this was a new client with whom you never worked before, but who pays more than the previous one. I don't know, but I do not like people who limit me so much. Hope this helps.


Thank you for your reply, Josephine. I have to say that rate is ridiculous! To answer your question, this is a new client with whom I've never worked before but has the possibility to pay better and give more jobs than the current client.


 

Sheila Wilson  Identity Verified
Spain
Local time: 23:27
Member (2007)
English
+ ...
If I'm reading it right, it's just plain ridiculous Jul 31, 2013

Aditya Ikhsan Prasiddha wrote:
I found this peculiar point that obliges me to provide written notice in advance to the client if I am, or will be, providing services related to [my expertise] to any "[client] Competitor" whether direct or indirect. Then the client will assess whether the situation could cause conflict of interest or potential for compromise of its confidential information as determined in its sole discretion.


You're a freelancer, and the whole idea of freelancing is that word "free"! Free to work with multiple clients, providing the service you specialise in. They absolutely cannot stop you working for their competitors. What they CAN do is to prevent you knowingly working directly with their own clients when they've introduced you to them, if they are an agency; and they CAN expect you to keep all their own company details totally confidential. Signing to the effect that you will not 'cut them out of the loop' or 'spill the beans' is perfectly reasonable.

If you sign this, as far as I can see you will potentially be in the position of having just one client, and totally dependent on that client to provide enough work to live on. That's called being an employee, isn't it?

This is an abuse we hear about quite often from agencies. If this is an end client then it's less usual, but equally absurd. You should be signing an NDA with them, not an exclusivity contract.


 

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 05:27
Member (2012)
English to Indonesian
TOPIC STARTER
So what should I do? Jul 31, 2013

Sheila Wilson wrote:

Aditya Ikhsan Prasiddha wrote:
I found this peculiar point that obliges me to provide written notice in advance to the client if I am, or will be, providing services related to [my expertise] to any "[client] Competitor" whether direct or indirect. Then the client will assess whether the situation could cause conflict of interest or potential for compromise of its confidential information as determined in its sole discretion.


You're a freelancer, and the whole idea of freelancing is that word "free"! Free to work with multiple clients, providing the service you specialise in. They absolutely cannot stop you working for their competitors. What they CAN do is to prevent you knowingly working directly with their own clients when they've introduced you to them, if they are an agency; and they CAN expect you to keep all their own company details totally confidential. Signing to the effect that you will not 'cut them out of the loop' or 'spill the beans' is perfectly reasonable.

If you sign this, as far as I can see you will potentially be in the position of having just one client, and totally dependent on that client to provide enough work to live on. That's called being an employee, isn't it?

This is an abuse we hear about quite often from agencies. If this is an end client then it's less usual, but equally absurd. You should be signing an NDA with them, not an exclusivity contract.


You hit the nail on the head there. I have to clarify though that I think this is the client's policy, which got passed to me through the agency's contract.

I still haven't found the solution to this though. Does anyone have any negotiation tactics that I can apply?


 

Marie-Helene Dubois  Identity Verified
Spain
Local time: 00:27
Member (2011)
Spanish to English
+ ...
Personally... Jul 31, 2013

I would cross out the offending section of the contract, initial the amendment and sign the contract. I would then return it explaining that I have made a small amendment.

You may find that the person you are dealing with knows nothing about the law and probably hasn't read the contract so this is the easiest way of extricating yourself from this ridiculous condition. This involves the least amount of work on your part and on the part of the PM who sent you the contract.

I would absolutely not sign a contract to this effect as a freelancer.

You could alternatively just not sign the contract. Some agencies send you a contract and then forget about it and then send you work anyway. This approach is slightly risky as they may never send you work if they're even slightly organized.

However, you run that risk even if you do sign the contract in which case you would be in breach of contract every time you worked with a new client!

Amazing.

If all else fails, just politely refuse to sign the contract and explain your reasons.


 

Theo Bernards  Identity Verified
France
Local time: 00:27
English to Dutch
+ ...
This is INSANE (capitalised for a reason) Jul 31, 2013

Aditya Ikhsan Prasiddha wrote:

...

I [must] me to provide written notice in advance to the client if I am, or will be, providing services related to [my expertise] to any "[client] Competitor" whether direct or indirect. Then the client will assess whether the situation could cause conflict of interest or potential for compromise of its confidential information as determined in its sole discretion.
...


Basically, this is what it comes down to and that is what you want to hear how to respond. My initial gut feeling response to the agency would be in the lines of: "What [expletive beginning with an f] planet do you or your client live on? Can I see your client list to see if you have clients that I feel are a conflict of interest?" But I would probably take a deep breath, count to ten and rephrase that before sending a response to the agency.

Truth be told, I generally wouldn't sign such agreements and make it clear to the agency that in their relationships with freelance translators they must be willing to display a certain basis of trust; insisting on this clause will cause them to fail my particular vetting topic for new clients - with flying colours, I might add.

I have a very strict non-disclosure principle embedded in my terms and conditions and my practice and even if I wanted to tell them I work for a potential customer or competitor of theirs, that non-disclosure principle forbids me to tell them. Same as it prevents me telling their competitor I work for them on which account. If they want to enforce the disputed clause, they can always make an offer of employment, where telecommuting, hefty remuneration and an attractive holiday package plus other secundary remunerations should be addressed, and even then they can only have the guarantee that I will, for the duration of my employment, not accept assignments outside my employment from the employment date onwards. the offer would have to be very, very good, though, before I would even consider accepting it...


 

Phil Hand  Identity Verified
China
Local time: 06:27
Chinese to English
Depends a bit on the industry Aug 1, 2013

Some industries are more paranoid than others. And if a client is really really not willing to let you be a freelancer - because that's what they're saying - then you have to decide how much they are worth to you.

If you can find someone intelligent at the company to talk to, it's worth trying to start a conversation about this. Point out that this is your job, and you are a freelancer, and so this clause basically destroys your business. Suggest to them that this isn't smart, so can they think of another way around it? Or would they like to offer a certain additional payment (quite high!) in compensation fo the business you will lose?

If you can get someone to understand, you might get somewhere. Otherwise you have to make a decision to choose one or the other; or keep working for both, at the risk of possible consequences (but knowing that you never talk to anyone about your clients anyway, the risks are pretty small).


 

Khanda
Poland
Local time: 00:27
Polish to English
+ ...
Suggest an alternative Aug 1, 2013

Aditya, the best you can do is to provide the solution at the moment you present the problem (otherwise you'll be perceived as a liability, not an asset): contact the company, tell them that this provision is too vague and puts you at a disadvantaged position - if the determination of "competition" is at company's sole discretion you will be required to contact them each time you get a new client, disclose the identity of the client and ask for permission to cooperate with them (otherwise who may know if a soapmaker from Andorra that uses your services is not perceived by them as a competition?), and suggest that they should either provide a full list of their competitors in the Definitions, or - better - replace the non-competition clause with a well-defined NDA clause that you concocted, of course after their lawyers run through it (in this way they will be working on your material, not you adapt to their demands). NDA is a standard practice, as you will be kind to remind them, of courseicon_smile.gif

Tell yourself that this is a non-negotiable point and that if they hold their ground, you will walk away without any regret. Of course try to work around it, but if they don't agree to change this, just say "thank you" and move on. In communication with them be positive, open, self-assured and know your value - once they sense you are apologetic or unsure about your standing, they'll eat you.

[Edited at 2013-08-01 06:21 GMT]


 

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 05:27
Member (2012)
English to Indonesian
TOPIC STARTER
Thank you Aug 1, 2013

Thank you very much, everyone! Sorry for not replying one by one but you have been a great help. Particulary Jan, that's an advice I'll take into action.

[Edited at 2013-08-01 06:19 GMT]


 

Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 00:27
English to Polish
+ ...
... Aug 1, 2013

Aditya Ikhsan Prasiddha wrote:

Dear colleagues,

I was about to sign a contract but then I found this peculiar point that obliges me to provide written notice in advance to the client if I am, or will be, providing services related to [my expertise] to any "[client] Competitor" whether direct or indirect. Then the client will assess whether the situation could cause conflict of interest or potential for compromise of its confidential information as determined in its sole discretion. I don't know what to do because I really want this job but I don't want to lose it just because I've been working with this so-called competitor (which yields smaller fortune compared to what this potential client could bring). Now the questions:

1. What do you think is the best way to get the new client and retain the old one? Can I try to assure this potential client that there will be no conflict of interest and disclosure of any confidential information?
2. These two companies are not really direct competitor (like Myspace vs Facebook) but more like Facebook and Twitter. To what extent does this kind of policy usually apply?
3. Don't you think this policy is a bit harsh? If you specialize in a particular area, of course you are going to work with clients who are competitors to each other in one way or another.

Thank you!


Any 'agreement' is negotiable by definition. Until you have signed it, the 'agreement' is simply a draft that you can accept or reject. It is called 'agreement' because you and the other party 'agree' on what to write in it (i.e. your rights and obligations).

Strike the clause from the contract. Companies often use such clauses as a standard policy and without putting much thought in their appropriateness in specific situations. In your situation, it is not appropriate.

A non-compete clause is justified when you are adequately compensated for non-competing. Simply giving you some jobs is not normally enough to justify non-competition.

For comparison, my colleague who works directly in business and is a sort of mid-ranking manager right now (deputy director of something is my guess) has been offered about 70% of her normal salary for the entire duration of her competition ban. She can't work for the competition to earn 100-120, perhaps 150% of the salary, but she can get 70% without lifting a finger. She can also keep it if she earns money in any other way (and there is a couple of ways).


 

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 05:27
Member (2012)
English to Indonesian
TOPIC STARTER
Great news Aug 2, 2013

Great news! The agency approved my suggestion of amendment! Thank you once again.

 

John Fossey  Identity Verified
Canada
Local time: 18:27
Member (2008)
French to English
Everything is negotiable Aug 2, 2013

Good to hear. Which proves the answer to the question in the title: Everything is negotiable. Whether it will be accepted is another story, of course.

 


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