Re: HELP - Bad contract wording?

[Cindy Bailey <baileycom -at- EARTHLINK -dot- NET>]

Hi, David -

(I am cc'ing this to the list in case it might be of use to
others...sorry it's so lengthy..)

This is a clause that appears in many contracts in the state in which I
do business: California.  However, in our state, such a clause is
completely uninforceable (by law) because it prohibits you from
exercising your freedom to do business in a competitive market (I can't
recall the exact legal terminology for this...but that's the idea).
Most employers know this, but they leave such clauses in their contracts
in order to deter you from taking on such clients.

This is how I handle the situation... First: Regardless of such a
clause, I abide by a strict standard of ethics that does not allow me to
work on two projects (for two different clients) that directly compete
with each other *at the same time*.  For example, last year, I wrote the
online Help system for a new RDBMS product called Corum VIP 1.0.
Competitors of this product include Microsoft Access, Lotus Approach,
and others.  If at the same time, one of the competitor companies called
me and asked me to work on the online Help for their RDBMS products -
even just to edit one page of documentation - I would say "NO,
absolutely not."  However, if one of these companies called and asked me
to work on some sales literature for a product that was COMPLETELY
unrelated to the RDBMS application I was documenting, I would have no
problem doing that - because the two sets of documentation are
completely unrelated and therefore my work poses no threat of exposure
to either company.  Another situation: once I completed the online Help
(and the contract is up) for one company, then I am free to do business
with any business I please (as long as the law continues to support free
market practices).

THE MOST IMPORTANT THING to keep in mind if you find yourself in either
of these two situations is to be careful NOT TO DIVULGE ANY PROPRIETARY
INFORMATION to any other clients. And that's really what any client is
concerned about.  This means that you can bring your newly learned
skills and knowledge on documentation process with you, but you CANNOT
share with the client such information as: "Well, my last client decided
not to have a section on Blah-Blah because they did market research that
revealed it was counter-productive."  That market research may have
given your last client an edge in the marketplace and this information
should absolutely not be shared with another client.

All this theory is nice, but how do you handle the situation by
tomorrow?  I would, first of all, find out how legal and/or enforceable
such a statement is in your state.  In other words, try to find a
reliable coporate contracts lawyer who could answer that one question
for you.  (It will be worth it because this issue will come up again and
again.)  To save on the expense of consulting a lawyer, you may want to
contact your local Small Business Administration (SBA) office or an SBA
Development Center.  These government agencies are set up to help YOU -
our taxes pay for it.  Make sure, however, that you are speaking to
someone knowledgeable and experienced in business.

If it IS an enforceable clause and you are uncomfortable with it, I
would negotiate to change the clause to meet your satisfaction (and your
client's) - or eliminate it entirely.  If the client won't budge, I
would NOT sign this agreement.  You do NOT want to place limitations on
your ability to conduct business.  Also, I would NEVER sign any contract
that I was not comfortable with.  You are uncomfortable for a reason -
listen to that instinct.  If the client really wants your services,
he/she is bound to work something out with you.

If it IS an unenforceable clause, you can do one of two things depending
on your own personality/ethics/morals/etc.  You could just sign on the
bottom line and run your business however you want (within the law in
your state/city).  I know writers who do this.  - Or you can talk out
your concerns with the client before signing - so that they are at least
aware of how you will treat the clause.  (Remember, they cannot enforce
it - and knowing where you stand often makes them feel better.) Get a
feel for how the client responds: positively or negatively.  If they
respond negatively, this is not good.  They may try to hold the clause
against you regardless of its legal enforceabilty.  So walk away.

BOTTOM LINE: The best solution, whether the clause is enforceable or
not, is either to have the client eliminate the clause completely or to
change it to match your ethical standards (mine is how I've described it
in second paragraph above).   This is usually satisfactory to the
client.  (... and you are being honest and upfront with the client,
always a good thing.)

Hope some of this helped.  Please keep in mind that I am not a lawyer -
that what I have offered here is my opinion based on my lengthy
experience in the technical and corporate writing business.

Good Luck! (Oh!  You may want to check out Nolo Press; they publish an
awesome legal guide to the independent consultant - but the name escapes
me at the moment.  Search for them on the Web.)

Cindy Bailey
Bailey Communications
ph: 310-379-4135; fx: 310-379-0084




David Boss wrote:
>
> I have been offered a two month contract with a large computer
> consulting and service company. One clause in the contract bothers me so
> thought I would invite comments. The section is:
>
> "The Contractor agrees not to enter into any direct or indirect
> contracts to provide similar services to a <company> customer as those
> provided by Contractor herein other than through <company> during the
> term of this Agreement and for a period of one year after the
> termination or expiration thereof, without the prior written consent of
> <company>."
>
> Since this company works with many others in the area that are
> prospective clients, and some that I have worked for in the past and
> will probably hear from again, I feel that accepting this clause as is
> would (in theory, at least) create an unacceptable limitation to the
> market for my services. Any experience with this or comments?
>
> Please respond directly as I receive the digest and need to return this
> contract tomorrow.
>
> David Boss
> Boss Communications
> Technical Writing <> Business Communications <> Web Site Development
> bosscomm -at- interlog -dot- com <> bosscomm -at- compuserve -dot- com
> Web site: http://www.interlog.com/~bosscomm
>
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