Warning to EnterpriseOne Independent Consultants...

For the past couple of months, I've been working with a customer on the selection of both E1 and the system implementer.

One of the system implementers who fell early used a number of independent consultants in the pre-sales cycle. This is pretty common practice, and is usually a win-win for the consultant - if the SI gets selected, the consultant gets a major role right at the beginning of the contract.

Now, its usual for the SI to create a Non-Disclosure agreement with the consultants it uses - however, one VERY well known SI managed to slip in a "non-compete" clause into their Non-Disclosure agreement.

In effect, this clause prevents the consultant working for ANY competitor to the SI for 18 months. Even if the project is unrelated to the project that they attempted to help the SI with in the first place.

We've just had to turn down a number of consultants solely on this basis recently. None of them knew anything about the non-disclosure/non-compete clause - but unfortunately our customers' legal department don't want to fight this further down the road.

So, please please be careful what you sign. Usually, most non-disclosure agreements aren't as binding - and if there is a non-compete, its usually directed at the customer that the SI is in pre-sales with.

If you've signed any non-disclosure agreements with any SYSTem IMplEmenter, please PLEASE check carefully....

Excellent info Jon, thanks for the heads up. I am apparently one of the rare breed who actually reads contracts since I am always arguing before signing...

Thankfully I have not dealt with that company and am now properly forewarned should they approach me.

Again, thank you.

-Ethan

No, Ethan ~ you aren't alone.

I argue two points, generally:
~ Clarify the Non-Compete: If I am being submitted as a resource ~ I don't usually know the client or which other organizations are submitting. Yes, ignorance is not above the agreement, but if I don't know who's competing - then the onus is on them to let me know in advance.
~ No, you can't have my Intellectual IP: Some agreements read, "... all code, logic, ditto, ditto, dot-to-do... provided to the client becomes our intellectual property. So suck it up!" As an independent, there are a lot of 'tools' I can provide to the client ~ at my expense of time. For example, QWKR (when it finally gets released) ~ one contract read that 'all code, logic and IP submitted to the client...' becomes their IP. I explained that I couldn't agree to that, because I have some third party tools I might want to 'give' the client to 'make debugging / troubleshooting easier'. The agency said 'everything submitted becomes OURS'. I said, find another developer. With most agencies, real people are behind the contract and you can ask them to exclude and agree to not thieve our Personal code.... it's always nice to append to the agreement a penalty for being caught (this is our livelihood, after all).

One more note for the warnings to IC's ~ Make sure you ask any recruiter / agency what rate they are actually submitting you. I recently lost a fairly big deal due to the submitted rate. I had been asked five times by the recruiter to lower my rate... after the dust settled, I discovered that $50 an hour had been pegged to the upwards of the rate that I had reduced $20 an hour(I do not believe they ever lowered their rate during the process). Let's just say that number is listed in my Google Voice as Spam ~ and goes direct to VM.

(db)

[ QUOTE ]
I had been asked five times by the recruiter to lower my rate

[/ QUOTE ]

This is, of course, standard practice by everyone. All agencies will try to show they can provide personnel for lower rates - but will always try and make a profit. Its up to you to decide whether to reduce your rate or not. When asked, always tell them a rate that is 10% higher than your lowest rate, then you have "wiggle room".

All our rates are low because too many agencies keep undercutting to get resources on-site, and too many companies are out there taking too large of a piece of the pie for doing nothing.

Yes, agreed, some of these 'agency' System Implementer organizations can be tricky to sleazy. I always have my own contract that I have used for many many years. If they reject that, it is the basis I negotiate from. It is really pretty simple, legal but straightforward. I never allow a non-compete unless a single, specific corporate entity is named and NEVER allow a general clause. Heck, most of these SI's don't even reveal who their clients are so how do you even know what you may compete with them?

It is much like IBM when they hire some poor guy; if you don't read the very very fine print, you don't realize that EVERYTHING you THINK belongs to IBM! Even nice dreams you have for a new power source or anything else. Amazingly people sign these things too.

This is one of the main reasons I remain and always will remain a Free Agent! <smile>!

You may ask if I have lost business doing this. You bet, but I remain my own person and Sub-S corporation with no ties, restrictions or anything else. I have several other lines of business (like healthcare products) who know what a non-compete would do in that area?

Cheers,

Skip Stein
Management Systems Consulting, Inc.
http://www.msc-inc.net

Jon,

You missed the point. The recruiter / agency asked me five times to lower my rate ~ but, didn't consider budging on theirs.

When chatted with the hiring authority I found out that the rate went down by the increments that I lowered my rate and nothing more. How can an agency, in good faith, ask us to lower our rate if they haven't lowered theirs. Had I lowered my rate, low enough to have won the contract - they would have been making more on the contract, than I would have been.

Skip ~ I maintain a pretty standard agreement for direct clients, too. I kept it in very plain language (fifth grade English) and I've never had a client question it (going on eight+ years).

(db)

We all need to be careful what we sign.

However, for a non-complete to be valid in most states, there has to be compensation/remuneration for the non-complete to be valid. Just because they add that language to the contract does not mean it is enforcable.

Jon and Daniel hit the nail on the head. Read and defend what you feel is indefensible in every docuemnt requiring a signature. If we want to remain independent, we need to act independently.