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TexLaw
TexLaw, Lawyer
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Experience:  Contracts, Wrongful termination and discrimination
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Joining client company

Resolved Question:

Joining client company


 


 


I'm on H1b working for a client company. My compay also has a vendor compnay in between so relation flow is something like this.


 


 


 


My Company -- Vendor -- Client Company


 


 


 


I have been asked by my client to join them and transfer my H1 via to them.


 


I have a contact with my current H1 holding compnay which states as below.


 


 


 


**********************************************


 


Non-Competition


 


The Employee agrees that during the period of employment with the Company, he will not, directly or indirectly, solicit the trade of, or trade with, any customer, prospective customer, supplier, prospective supplier of the Company, for any business other than the benefit of the company.


 


 


 


Employee must not compete with or solicit with employer’s vendors and clients.


 


Employee must not use or disclose any confidential information regarding the clients or candidates at any time during employment with employer without written permission from employer.


 


************************************************


 


 


 


If I join client company, will there be any consequences ?


 


As i read the agreement, I do not see it stating that I cannot join client company. Is my understanding correct ?


 


What are your suggestion ?

Submitted: 2 years ago.
Category: Employment Law
Expert:  TexLaw replied 2 years ago.
Hi,

Thank you for your question. I agree with your initial assessment that the non-compete clause does not seem to prohibit you from taking a job with a client.

But to make sure, I need to know more about this from you.

What kind of work does your current employer do?

What is your job title?

What kind of work does the client's company do?

What would you be doing for the client company?

I look forward to hearing back from you.

-ZDN
TexLaw, Lawyer
Category: Employment Law
Satisfied Customers: 4257
Experience: Contracts, Wrongful termination and discrimination
TexLaw and 4 other Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

What kind of work does your current employer do?

It's an IT consulting firm who has provided my as resource to another IT consulting firm who is vendor for client. I am joining client company.

What is your job title?

Job title is developer.

What kind of work does the client's company do?

Client company is online seller company like amazon, ebay. Client company is into animal pharmacy product domain. I would say they are online reseller for pet products.

What would you be doing for the client company?

I will be working a developer.

 

I am copying few more note from my agreement. Can you revise these as well and let me know if any of this could give advantage to my employer and affect my plans.

 

 

**************************************************

Non-Solicitation

The Employee agrees that for 1 year following termination of his employment with the company including without limitation, termination by the company for causes or without causes, the Employee shall not directly or indirectly do any of the following:-

 

a) Solicit or induce, or attempt to solicit or induce, any employee or consultant of the Company to leave the Company for any reason whatsoever, or hire any employee or consultant of the Company.

b) Solicit or accept any business from a person, firm, or corporation that is a customer of the Company during the time the Employee is employed by the Company.

c) Solicit or accept any business from a person, firm, or corporation that is a prospective customer of the Company with whom the Employee had any dealings on the Company’s behalf the term of employment.

d) Employee must not discuss any billing and salary related information to any of the vendor / client’s / company employees. Any conflict of interest will be resulting into breach of contract.

 

In such event, Employee is liable to pay 18% of their billable rate to XXX Inc.

 

Termination

 

We do require 14 days of written notice in order to termination so that we provide enough notices to our vendor and client. Employee agrees to provide the same notices whenever required.

 

Governing Law

This Agreement shall be governed by the construed and enforced in accordance with the laws of the State of Georgia.

**************************************************

Expert:  TexLaw replied 2 years ago.
Thank you for your response.

Your situation is not one in which there is a clear answer. The fact that you are going to work for the client to be a developer is an issue because it would appear that this is the exact same service your current employer is providing to the client. In other words, the client is going to bring you in house instead of hiring your current employer to get you to do the work.

That being said, the non-compete and non-solicitation clauses you have provided do not seem to exactly apply to this situation, and are more set up for you going to work for a competitor or opening up you own firm to compete against your current employer. It does not specifically restrict you from going to work for the client. The law strictly construes these type of clauses and will not interpret them to be broader than they are. Generally the law disfavors these types of clauses.

Nevertheless, there is a risk that your current employer could attempt to sue you. Whether you end up winning or not is beyond the point, as you would be facing an expensive lawsuit. The best thing to do in your situation is to get everything out in the open and on the table. In other words, you need to disclose to your future employer the non-compete and non-solicitation clause and tell them you are concerned. You also need to inform you current employer that you are wishing to go work for the client and that you want a release from them in connection with the non-compete, even though you do not believe you will be in violation.

-ZDN
TexLaw, Lawyer
Category: Employment Law
Satisfied Customers: 4257
Experience: Contracts, Wrongful termination and discrimination
TexLaw and 4 other Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

Few more questions, hopefully this is final.


 


As per my agreement, It I'm found breaching contract I am liable to 18% of bill rate. My contract gets renewed every month. Does that mean I have to pay 18% of my monthly bill rate ?


 


I live in NY but my employer is in GA. If my employer choose to sue me for whatever reason.. does that mean I have to be in GA to present my case or is this normally being handled by attorney or law offices ?


 


Can I choose to just join my client company(future employer) and not disclose my current employer about it since my employer does not have any direct relation with my client company.


 


My employer does not have originally signed contract with him since it was sent via email from my spouse's account. Does these facts help me any where when I deal with my employer ?


 

Expert:  TexLaw replied 2 years ago.
In regard to your question regarding your potential liability, it is not based on your billing rate to your employer, but on your employer's billing rate to the client.

In regard to where you can be sued, you need to look at the contract and see if there is any language which states something about an agreement as to the forum for the dispute. The language would say something like "in the case of any dispute regarding this agreement, all such disputes will be filed in the district court of Fulton County, Georgia" or "the parties consent to the jurisdiction of the Courts of Georgia" or "the parties agree to arbitrate any disputes". These type of clauses will tell if the contract requires that you face a lawsuit in Georgia. If there is no such clause in the contract, then they would have to sue you in New York. If you are sued in Georgia, you would have to make an appearance in Georgia for the trial (if the case went that far and did not settle). But your attorney could handle most of the work without you needing to be in Georgia.

In regard to whether you have to disclose to your current employer, the answer is no, you don't have to. If you do disclose, you can make sure that any problems are handled before you accept the employment and guarantee that you won't be sued. If you don't disclose, then you may get lucky and your employer never finds out about it.

The fact that the employer does not have the original signature of the contract does not matter. Copied, scanned, or faxed signatures work just as well as the original.

Please remember to rate my services positively so that I may be paid by the website for my work on your question.

Thanks and Good Luck on your new job,
ZDN
Customer: replied 2 years ago.

Just some final clarification.


 


I was referencing the the amount that employer gets from Vendor company. Do they charge me 18% of the amount that company gets from vendor in a month , since contract get renewed every month ?


 


or company can sue me for 18% of random tenure i.e. 2 years / 1 year ?

Expert:  TexLaw replied 2 years ago.
The amount they would charge you is vague in the contract. If the lawsuit were to come up you would argue that this is an arbitrary amount and that it is not representative of what their actual damages are, and that they do not have any actual damages.

The term on the 18% is very very unclear. It seems to state that they would ask you to pay them 18% of whatever rate your billable rate to the new employer. So arguable, since you would be an employee instead of sending a bill, this provision would not apply. Courts do not enforce clauses which are vague and ambiguous like this one.
TexLaw, Lawyer
Category: Employment Law
Satisfied Customers: 4257
Experience: Contracts, Wrongful termination and discrimination
TexLaw and 4 other Employment Law Specialists are ready to help you

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