Can an agency have another agency as a "client", accordingly to NDA terms?
Thread poster: Joé Veber

Joé Veber  Identity Verified
France
Local time: 03:23
English to French
Jun 6

Hello Proz community!

I ended up couple weeks ago in a weird situation in which I didn't know what was legal anymore, and therefore what I could do or not. I need some advices in case it happens again.

I am working for this small agency A, with whom I signed a NDA that forbids me to work for any of their clients. So far so good. However, this agency A is working for a bigger one (agency B) since a while already, and defines it as "its client". So... here are my questions:

1. Can agency A really have agency B as its client and legally forbid its translators to work for them (for agency B)?

2. Another way to turn the question is: Can "clients" as defined in the NDA of agency A be other agencies (and not only final clients/end-users)?

3. My final concern: Can I still somehow legally work for agency B?

So far, I don't, because I considered it as unethical, but the thing is that I don't know all the clients of agency A and each time I'm approaching a new one, I'm thinking "Are they, or not? Will I have to withdraw again if I happened to realize it?".

Thanks in advance for your replies and advices! I really need them!

Joé


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Lianne van de Ven  Identity Verified
United States
Local time: 21:23
Member (2008)
English to Dutch
+ ...
Non-compete clause Jun 7

What you are referring to is a non-compete clause, which may be squeezed into an NDA, but serves a different purpose. You can do some online reading (search for example for non-compete translators subcontractor) that will give you something to think about.

Purpose of an NDA:
https://www.forbes.com/sites/allbusiness/2016/03/10/the-key-elements-of-non-disclosure-agreements/#3690c5df627d

Freelancer is not an employee
http://www.mondaq.com/unitedstates/x/246534/employee%20rights%20labour%20relations/No%20No%20No%20Your%20Independent%20Contractor%20Cannot%20Sign%20A%20Noncompete%20Never%20Ever

http://www.proz.com/forum/business_issues/122462-a_non_compete_clause_without_expiration_date.html

http://www.proz.com/forum/business_issues/202445-harsh_non_compete_contract_clause.html

Discussions typically range from whether/where/when it is legal and can be enforced, how long such a clause may be effective, and how much sense it makes in terms of what you are getting in return.


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DZiW
Ukraine
English to Russian
+ ...
primordially Jun 7

1) One really should read and understand contractual terms, adding, deleting, and amending if required.
No suicidal tendencies.

2) And how could one know that B is in some relations with A, C, or D?
No regret, no remorse.

A few times I had a similar provision of a contract regarding the NDA, so I asked how one was supposed to know who was who, if they made no disclosure. They tried to talk me into signing it with lingo that it's "but a standard template whatever", yet agreed to remove it.


Shortly: abide by the terms of the agreement YOU HAVE SIGNED.
Therefore, if you (1) do have such a restriction in your contract and (2) are aware that B is an A's client, then you know better...

And what is the responsibility, I wonder? If it's serious, then consult a lawyer.


Take care


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Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 09:23
Member (2004)
English to Thai
+ ...
Conflicts of laws Jun 7

I have an issue with one biggest translation agency in New York. They claim that I act against NDA but their interpretation of the document contradicts with laws in my country e.g. practical treatment of subcontractors, essential revealing of matters to work with.
I am actually a graduate of Ph.D. in engineering, but my education and job background are inadequate to work as a translator.
I recently realize that translators now need to study laws carefully in order to work healthfully in Internet-based environment.

Regards,
Soonthon L.


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Georgie Scott  Identity Verified
France
Local time: 03:23
Member (2009)
French to English
+ ...
If you've already signed it... Jun 7

You can probably ask them to waive the non-compete in that instance. They are probably more worried about their direct clients.

Non-compete clauses are tricky. On the one hand, I empathize that agencies don't want us to poach their clients, on the other hand, freelancers offer a completely different service and, surprise, surprise, may well have their own business plan and already be aware of said client and have a plan in place for contacting them... what are you supposed to do when an agency offers you work with that client - just bin all of the research and work you've done?

FYI, last year I refused point blank to sign non-compete clauses for any new clients. Every agency I spoke to agreed to remove the clause or modify it to exclude wine and spirits clients. But I am yet to receive a single piece of work from any of them.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 02:23
Member (2014)
Japanese to English
Depends on jurisdiction Jun 7

Joé Veber wrote:
1. Can agency A really have agency B as its client and legally forbid its translators to work for them (for agency B)?

In the UK, non-compete clauses are very difficult to enforce. As a general rule, courts will not countenance a restraint of trade. The exceptions come when there is a legitimate business interest to protect, such as the case of a sales manager of a software company with a very high market share in its field, who knows all the purchasing managers and licensing details at each of the company's customers, and who goes to work for a competing company. The information he takes with him has unusual value to the company he leaves. But that's very different to the situation of a single freelance translator working for another client.

If such clauses are deemed unreasonable - more than a few months, over more than a limited geographical area - they will be shot down. No working for the agency's clients in the UK for 6 months after you last worked with them? Possibly reasonable (but given that it would probably take 6 months for a legal case to come to court it would hardly be worth pursuing by the agency). No working for the agency's clients anywhere in the world for 3 years after you last worked with them? Extremely unlikely to be upheld in a UK court in the context of our industry.

But that's the UK. Whether French law is equally supportive of the individual's right to trade I do not know. And suppose the client is in Germany, or Japan, or the US? It gets complicated fast. Better not to sign in the first place.

Regards,
Dan


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 03:23
Member (2005)
English to Spanish
+ ...
It is a matter of honesty Jun 7

My understanding of the spirit of all these non-solicitation clauses is that you shall not knowingly contact the agency's customers, whoever they are. This means that you should not offer your services to any firm or individual who you happen to know is a client of your agency client. If you are already working for a firm which, as you learn later on, happens to be an end client of your agency client, you are not actually soliciting work with such end client, in my opinion.

If we notice that an end client getting in touch with us is in fact the exact person/department we had been working for through the agency, my view of this is that we should politely reject the work and let our agency customer know. However, agencies never (or very very rarely indeed) inform end clients of who their translators are, or tell us what people/departments at end clients they work for, so our chances of detecting the conflict are not always that high.

Precisely because non-solicitation clauses, I really do not make any effort at all to learn who are muy agency clients' clients.


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Samuel Murray  Identity Verified
Netherlands
Local time: 03:23
Member (2006)
English to Afrikaans
+ ...
A client can be an agency Jun 7

Joé Veber wrote:
1. Can agency A really have agency B as its client...


Yes. An agency can be a client. After all, agency A is your client. Agency B can be agency A's client. And if agency B is agency A's client, and if you have agreed not to work for any of agency A's clients, then you have agreed not to work for agency B.

...and legally forbid its translators to work for them (for agency B)?


Well, this is the point at which this becomes a discussion of the various possible exceptions to the contract that you've signed.

The thing is that I don't know all the clients of agency A, and each time I'm approaching a new one, I'm thinking "Are they, or not? Will I have to withdraw again if I happened to realize it?".


Usually, it is implied (though seldom stated) that the prohibition applies only to clients that you became aware of through your contact with agency A. In such a scenario, if you are unaware that agency B is a client of agency A, then you may start working for agency B as well. Or, if you have already worked for agency B in the past, then you are allowed to continue to work for agency B, even though agency B is a client of agency A.

Whenever I get an NDA telling me not to work for an agency's clients, I reply by asking them for a list of their clients, because otherwise I can't comply with the NDA. Usually the agency then replies with a clarification similar to the items mentioned above.


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Joé Veber  Identity Verified
France
Local time: 03:23
English to French
TOPIC STARTER
Thanks for all your replies! Jun 8

Thanks for all your replies! They are really valuable. I guess I will just go with the flow and worry less about such things, and also ask this agency A a list of their customers...

And as one of you said, it will be anyway quite a difficult task for such a small company on a different continent to bring such a matter to court...

Thanks again! I wish you a great day or night, depending on where you are around the globe!

Joé


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