(Non)-Competition Clause
Thread poster: Boris Kimel

Boris Kimel  Identity Verified
Russian Federation
Local time: 19:32
English to Russian
+ ...
Sep 3, 2006

Recently I've signed such a clause with an agency proposing me some extremely potential job. Provided the job never comes or we cannot negotiate reasonable rates, am I still bound by the terms? Am I already bound not having received any single PO? Am I free to run to meet the customer immediately after finishing a job, if it does come? I do already know the name of the final customer.

The text of the clause reads as follows:

"With immediate effect, and within the framework of my activities for XXX, I hereby undertake not to make contact with clients or their sub-contractors or end customers..."

No term (e.g. 1 or 10 years) is given at all. What does this mean for me? How wide does the mentioned framework extend?

To my potential employers: I am not trying to find a way to evade the clause, I just want to acquire some (maybe common) business knowledge.

Thanks!

P.S. Though I've searched the forum, there could be an answer somewhere here - just point!


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Lesley Clarke  Identity Verified
Mexico
Local time: 10:32
Spanish to English
Not a legal opinion but... Sep 3, 2006

I would understand that to refer to the end-customer of any translation you might do for that agency, which is a standard requirement both ethically and in some cases legally. I am not a lawyer and I certainly do not know the laws of your country, so this is just a common sense answer. Hope it is helpful

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Boris Kimel  Identity Verified
Russian Federation
Local time: 19:32
English to Russian
+ ...
TOPIC STARTER
Thanks, but... Sep 4, 2006

Lesley Clarke wrote:
I would understand that to refer to the end-customer of any translation you might do for that agency...


While this is quite clear and reasonable, the main question is about the "framework" and scope:
1) What happens if the translator (oops, me) does not get any assignment from the XXX agency for a particular customer (or no customer / assignment at all) for whatever reason?
2) What happens if the translator contacts the end-customer prior to receiving any assignment from the XXX agency for that end-customer?
3) Does the clause in its current form mean the translator is NEVER allowed to contact ANY end-customer which he happened to work for through the XXX agency?

Here is a somewhat more comprehensible text from an YYY agency (excerpt) stating perhaps the same idea but much more definitely:

"...and he will not actively approach these customers for 6 months from the date of the last work carried out for this customer through the YYY agency..."

Please forgive me my legal illiteracy. While surely acting ethically I'd still like to know what I have signed at least after signing the paper

Thanks!


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Victor Dewsbery  Identity Verified
Germany
Local time: 17:32
German to English
+ ...
Another "non-legal" opinion Sep 4, 2006

A couple of general remarks (like Lesley I am not a lawyer and know nothing of the laws of your country, so please read these remarks as a personal opinion, not legal advice).

1. The agency has approached you about a particular job and told you the name of the end customer. On general ethical grounds it would not seem appropriate for you to approach that end customer, whether you get the job from the agency or not.

2. If you work for the agency, the same principle would apply to all end customers for whom the agency gives or offers you jobs.

3. If the agency gives you jobs from end customers for whom you have previously worked directly, you should tell the agency. You can still do the job for the agency, but in such cases you can reserve the right to continue your direct relationship with the end customer.
Here, an intact relationship of trust is necessary so that the agency does not need to fear that you will steal their business. This will probably mean that you will not contact the department or person that the agency deals with, but only your own previous contact.

4. In most jurisdictions, non-competition clauses continue to apply for a fixed period after you cease to work with the agency. I seem to remember mention of two years, although I am not sure what sort of contract that involved or which country (although it was probably Germany, 'cos that's where most of my source texts come from).
One complicating factor is that these time limit clauses are often applicable to employment contracts, i.e. people in full time jobs. For a freelance, it is far more difficult to define if or when you actually stopped working for the agency (you may claim that you stopped working together two years ago, and the agency may claim that you are still on their books).

5. The "small world syndrome" could make things even more complicated. Perhaps the end customer uses two different agencies at times, and both agencies come to you for the actual work (it happened to me once). You then either have to refuse work and betray confidences, or accept work from both and keep quiet about it. This is difficult, and I don't think there is a single answer that will fit all situations.


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Claire Titchmarsh  Identity Verified
Local time: 17:32
Italian to English
+ ...
Meaningless Sep 4, 2006

"With immediate effect, and within the framework of my activities for XXX, I hereby undertake not to make contact with clients or their sub-contractors or end customers..."

No term (e.g. 1 or 10 years) is given at all. What does this mean for me? How wide does the mentioned framework extend?

This is not a legal opinion either, but the clause so far is hardly binding. "Within the framework of my activities for XXX"... so what about outside of the framework of your activities for XXX ?? If I had received this I would have taken it to mean "you cannot contact the client directly during the assignment". In my view it is far too wide to be of much use.... no term, no mention of who these sub-contractors or end customers are... they could be absolutely anyone and how the heck do you know who all their sub-contractors are?

Perhaps a proz lawyer can shed more light.

Claire.


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Woodstock  Identity Verified
Germany
Local time: 17:32
German to English
+ ...
Have you tried checking with the Chamber of Commerce? Sep 4, 2006

Disclaimer: I'm neither a lawyer nor an expert on this topic

You could try checking with your local Chamber of Commerce about the laws governing this sort of thing. For example, in Germany there is the Handelsgesetzbuch (HGB), which would contain the binding German laws for commerce and, I vaguely remember it contains the laws pertaining to competition, including the time limit. It sounds as if the contract you are quoting is very vague and probably not drawn up by a lawyer, just by the agency trying to protect itself. I recently asked a client to change a similar clause to "one year after the end of business relations", as I refused to agree to an unreasonable time period. If there are no business relations, it's doubtful the contract would be binding.

Just my 2 cents.


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Boris Kimel  Identity Verified
Russian Federation
Local time: 19:32
English to Russian
+ ...
TOPIC STARTER
Thanks! Sep 4, 2006

Thank you so much, Victor and Claire.

My first opinion was "meaningless" too, but it's hard to believe an agency does not know what to include in such a clause. To make things clear, let's imagine such a situation:

The agency is currently negotiating with the customer all the terms after I have done a test translation, which was approved (I also have got the customer's name from this very test). Meanwhile let us assume the customer has posted an in-house job somewhere, this job being right about what I was going to do (translation of the same materials). Am I out of the game? I am still waiting a reply from the agency - they told me it comes this week.

Thank you once again. I never thought I could need a lawyer with my small and quiet business.


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Victor Dewsbery  Identity Verified
Germany
Local time: 17:32
German to English
+ ...
Unsure of the sequence of events Sep 4, 2006

Boris Kimel wrote:
Meanwhile let us assume the customer has posted an in-house job somewhere, this job being right about what I was going to do (translation of the same materials). Am I out of the game?


Not sure what situation you are trying to describe here.
Did you see the same job advertised elsewhere before/after the agency contacted you? I suspect that this puts you out of the running for the direct job, unless you clear things with the agency (IMHO this applies on ethical grounds, whether or not your non-competition contract is effective or meaningful).


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Boris Kimel  Identity Verified
Russian Federation
Local time: 19:32
English to Russian
+ ...
TOPIC STARTER
Thanks Victor Sep 4, 2006

I have found the advertising _after_ I had been contacted by the agency, so ethically this is absolutely obvious.

The direct job offer was posted _after_ I had been contacted by the agency too. And there is only one concern:

Would the Agency inform me personally whether they are not making further negotiations with the customer, or should I inquire myself (I find it not very comfortable, since the agency might be in fact fighting to increase my rate)?
How can I "clear the things" with the agency?


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Victor Dewsbery  Identity Verified
Germany
Local time: 17:32
German to English
+ ...
Clear dividing line Sep 4, 2006

Boris Kimel wrote:
Would the Agency inform me personally whether they are not making further negotiations with the customer, or should I inquire myself (I find it not very comfortable, since the agency might be in fact fighting to increase my rate)?
How can I "clear the things" with the agency?


I think the only option here would be to approach the agency and say "If you are not pursuing this job, I would like to make a direct approach." Probably the agency will insist on pursuing the job itself. End of story - either the job comes through the agency, or it doesn't come at all. At least, that is the approach I would take.

In fact, I would probably not even ask the agency. Either the job comes or it doesn't. Some of my work is for agencies and some is for direct clients, and I try to avoid any overlap and clashes.

But perhaps that is easy for me: I work in a language combination with plenty of potential work, and the direct clients in my special areas (mainly solicitors and architects) are usually in small offices and not in big organisations. The crisis of conscience may be more difficult for people who work on technical manuals and find that there are only a handful of very very big direct clients such as Siemens and Sony.


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xxxAdrian MM.
Local time: 17:32
French to English
+ ...
Restrictive covenant void in English law Sep 26, 2006

If your contract, Boris, is governed by English and not Russian law, then

1. even if the job is not proceeding and no order form has been issued, you are still arguably bound by the contract term if you have signed the contract - and received good or valuable consideration (quid pro quo/payment) which is highly questionable in the circumstances if no job has materialised and

2. any restrictive covenant (no-competition clause) has to be reasonable:

(i) in geographical scope

(ii) in subject-matter and

(iii) in time

I believe yours would fall down at least on (i) and (iii) - no time specified - and have no doubt that a UK court would STRIKE IT DOWN as unreasonable and therefore void.



[Edited at 2006-09-26 08:53]

[Edited at 2006-09-26 09:28]


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