2

I am considering doing a freelance project but the prospective client want me to sign a IAA which has a clause that reads:

"Subsequent Employment. In consideration of the Company's promises herein, for a period of one year following the termination of my engagement for any reason, I promise to disclose to the Company any employment obtained by me after the termination of my engagement with the Company. Such disclosure shall be made within two (2) weeks of my obtaining such employment. I expressly consent to and authorize the Company to disclose to any subsequent employer of mine both the existence and terms of this Agreement and to take any steps the Company deems necessary to enforce this Agreement. "

But I have never seen this before and would like to know if these terms could limit my employment opportunities should project not workout or if I depart on not the best of terms.

2
  • If you're doing freelance work, that's arguably not "employment". – Acccumulation Dec 17 '20 at 6:21
  • @Acccumulation "If you're doing freelance work, that's arguably not "employment"". That is not going to help the OP elude the clause. Criteria such as economic reality and ascertainable intent of the clause prevail over a largely nominal distinction between "employment" and "subsequent work for other clients". – Iñaki Viggers Dec 17 '20 at 10:07
2

The requirement to keep this client up-to-date regarding your subsequent employment is unusual and arguably intrusive, although it would be lawful (and it is up to you to make it binding).

If the client reasonably suspects you are in breach of contract, he can bring court proceedings anyway and perhaps force you to identify your subsequent employment. Viewed innocently, the client's intent for that clause is to obviate the hassle and costs of said litigation. But unless your business with this client entails truly sensitive information, his alleged purpose of notifying others about the agreement sounds like client's pretext to wrongfully interfere with your subsequent employment.

If the client refuses to strike that clause, you might want to push for an amendment to the effect of keeping you in the loop whenever he approaches your subsequent employer(s). For instance, the clause should state that his communications to your subsequent employer shall be only by email and with you Cc-ed. Keep in mind, though, that amendments of that sort do not prevent the client from anonymously abusing your disclosures of subsequent employment and ultimately sabotaging your relations there.

6
  • The "I expressly consent to ... the Company ... take any steps the Company deems necessary to enforce this Agreement" seems like it could be abused. Technically speaking, if the Company declares that it has deemed punching OP in the face to be necessary to enforce the agreement, then OP has consented to them doing that. – Acccumulation Dec 17 '20 at 6:22
  • @Acccumulation "if the Company declares that it has deemed punching OP in the face to be necessary to enforce the agreement". The clause altogether refers to knowing about, and approaching, the OP's subsequent employer. Hence, the notion of physically attacking the OP is too stretched and would violate the implied covenant of good faith & fair dealing. Also, contract law disfavors interpretations which are unreasonable and precludes unconscionable terms. See Restatement (Second) of Contracts at §203(a) and 208. – Iñaki Viggers Dec 17 '20 at 9:59
  • That raises the question of why they included the phrase "the Company deems". While it purports to eliminate the ambiguity of just what is "necessary", it does so by allowing the company to resolve all such disputes in its favor. If this is limited by legal principles such as what you cite, it replaces factual uncertainty with legal uncertainty. – Acccumulation Dec 17 '20 at 21:15
  • @Acccumulation The language "company deems" is no wildcard for prevailing in all disputes. The scope of that language is constrained by the principles of contract law, some of which I mentioned in my previous comment. All matters entail factual and/or legal uncertainty, the latter because it is impractical or impossible for a contract to encompass every imaginable scenario. It is up to reasonable parties to find an equilibrium between practicality and safety in the contracts they enter. – Iñaki Viggers Dec 17 '20 at 22:48
  • It purports to be a wildcard for prevailing in all disputes, as long as the company asserts that it has deemed it necessary. – Acccumulation Dec 17 '20 at 22:53

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.