Be careful

Hi, Lately we get into very disturbing situation with one of the largest US solution centers. We have hired 2 employees form a solution center. And first what we know we and our new employees get sued by this solution center for an about 1M each. As we have expected the complain was completely frivolous and get dismissed by the court but we still spend almost 2 years fighting and it cost money that could be spent for better reasons. The most important and most disturbing what I have found out is that owner of the solution center user court to keep people in the company. He has admitted in the deposition that he believes that court is only way how he can keep people inside of the company. This solution center is suing or threatening to sue almost every employee who is leaving the company. I really feel sorry for every employee who working there now and I want to share my ideas how everybody can protect themselves against such employers: 1. When you evaluate solution center ask: how many employees they have been suing in the past. I think fact that company has litigation with previous employee is not a problem but if company suing or threatening to sue 10-15 employees it is a potential problem. 2. If you see that employer has litigation with employees request to put into the contract: If they sue you and loose they have to pay your lawers fee. Maybe this is automatic in some countries but in US everybody can sue everybody and you can not get money back unless you sue back – what will cost you additional 2 years and about ~100K of lawers fees. So put this into your contract and as minimum they will think before start. 3. Get insurance so you will have 100k to cover your lawer expenses. I think it is good to have BLACK list of employers who was caught doing such things. Please, let me know if you were in such situation. I hope it is only one such solution center but if it is more we can do something to protect ourselves.

What sort of methods do you have in mind to protect ourselves?

Hi, The main thing is information. When I came to the US the contract I sign did not mean for me anything. I was interested in new country and interesting work. Now I am finding out how my employer was thinking about me: SLAVE. And if I consult lawyer I would know that my contract was designed for only one reason – to be able to sue me if I decide to leave. I was actually shocked when I received documents from the company. They have lawyer on retainer agreement and it looks that his only work is to sue employees most of whom came from other countries and do not know local rules. I have feeling that he knew that he will loose but still was suing counting that we will not protect new employees and they will have to leave. But anyway. Have you heard about such things or it is only one NSC like this? If this is only one so it is not big dial. I do not believe that company with such business strategy can survive. By doing this they are cutting branch where they sit.

This is quite common in companies where customers can float freely between vendors. However, contracts like these typically cannot hold up in court since the contract violates your means of livlihood. Big companies with big pockets can sue you no matter what, even if you did not do anything illegal they can still sue. Unfortunately, this is how things work in America… [B)] [xx(]

Val, This issue of non-compete contract is common in many industries where it’s easy for clients to move from one consulting firm to another. It is not strictly an issue of this NSC singling you out. It’s simply a nature of the consulting business where the client really spends so much time working directly with the client, that the client really has the relationship with the consultant and not with the Consulting organization. This is especially true when working with small organizational implementation where there’s not a “team” of consultants involved which fits right in with the mid-market space that you are consulting in. I’m quite sure that any company could care less about where a previous employee works UNLESS there are some trade secrets or key customer relationships involved. This would be another reason for a non-compete clause…and simply makes sense to me. This is only further complicated when you are dealing with employees from foreign lands. From a business perspective, how can the company NOT go down this route especially when they are investing a tremendous amount of money in navigating the issues of H1Bs and Visas and such. It makes sense that when a someone invests in you that you also owe them something in return. Now I am not an advocate of lawsuits either and I do not believe that any MBS Partner can survive by simply threatening lawsuits. HOWEVER, when a company tries to protect itself from the potential of an ex-employee taking away a client (I’m not saying this is the issue in your case), then obviously, that company should do whatever it can to remedy this. Yes, it’s ultimately up to the client to decide who it wants to work with as well. But remember, all the previous documentation signed during the sales cycle has been signed with the consulting firm and not with the consultant. It onlly makes sense…to me at least…that there should be some sort of amiable solution / reimbursement for this type of issue. Preferably, this should be worked through OUTSIDE of the courts. Again, I’m not trying to point fingers or say you got what you deserved by any means. I am saying that this issue of a non-compete is quite commone in the Consulting industry and is simply a necessary evil that you’ve stumbled into without apparently understanding the full implications of until too late. On a side note…I personally wish you hadn’t raised this issue to potential customers out there. Selling software and services is difficult enough with all the Fear, Uncertainty, and Doubt (FUD) out there from other competing software products. Now you are simply slowing down the sales cycle and bringing legal issues into the foray.

Hi Bill, I do not mind non-compete and I understand that company should protect there business. But what I see is absolutely different. The company using court system to push consultants out of country because nobody of us can support 2-3 year litigation with 300-400 per hour lowers fees. And what you have to look at that you company will not use your contract to kill you later. Couple of examples from real life: 1. Let say you have in you contract restriction that you will not work for other NSC within 60 miles radius from current solution center offices. You find new job with NSC out of 60 mile radius and you think you are OK. Nop, you current NSC will declare that your house is there “Virtual Office” and so if you not change you house you are still within 60 miles. Sounds “Creasy” and you will win but it will cost you 2 years of litigation. (by the way 60 mile radius considered unreasonable in US and actually any territorial restriction will be considered unreasonable. In our case Judge said that “they can work 1 inch from your office”) 2. You have restriction that you will not disclosure any confidential information. Sounds very normal and you are very honest and do not disclosure any confidential information. You think you are OK. No, they will sue you because you were exchanging e-mails with other consultants while you were working in the NSC. So if you ever ask anybody “How to setup Gen. Business Posting Group?” and get answer from your colleague this is confidential to your current NSC and you can not use this knowledge ever. Sounds “Creasy” also and again court will dismiss such case but it cost you 2 years of litigation… The non-compete is good thing and I believe most of consultants is honest and will not breach it. The question is how NSC’s will use it. The worst thing if you get sued for something you never did and it changing all your life and your plans. I know few people who have to leave because they could not pay to there lawyers and new NSC’s did not want protect them.

Hi Val, I’ve been reading this thread with great interests. Not only because I know you well, but also because I’ve also been in the same both. That is I’ve also been working in the USA. My story was not so different. I was also in the US on a H1 visa. And of cause I was also presented for an employment agreement. But instead of just signing it I consulted a lawyer, as I didn’t feel I knew enough about the legal stuff in connection to working in the US. This lawyer told me exactly what to sign and what not to sign, what I should ask to have changed in the agreement if I still wanted to signed. And with this knowledge I walked back to the company. Had it changed and signed my contract. And I never experienced any problems. And the same thing was done when I wanted to leave that company. I had a laywer help me again. Never any problems - we are still very good friends. Whereas I like that you’re raising this issue, then I don’t like your idea about BLACK LISTING companies, unless they are really doing something illigal. I would love if we could come up with some general guide lines for our members on what to do and what not to do, if they are thinking about taking a job abroad. Eventually some links to good lawyers or legal sites on the issue. I’m affraid that your issue otherwise could scare away members from accepting a job abroad, and that’s an experience that I would love everyone to have. Going to live and work in another country for a longer period, is something that will benefit you for the rest of your life. Personally my two years with BMI in New York was an experience of a lifetime, something that have shaped me and has given me a super background for everything I’ve done since.

Well said Eric! Well said…

Hi Erick, I am trying to find the best way for consultants to avoid such situations in the future. Unfortunately contacting a lawyer before signing contract will not help in some situations. We get to situation when company will sue people counting that they will not be able to pay for 2 years of litigation and they will leave. Unfortunately NY state law allows such things. Some other states do have protection against such cases. As example in Florida if you get sued you can offer settlement and other party has to win more than 125% or they obligated to pay your lowers fees. So you can offer $1 settlement and they have to pay your expenses if they loose. But again it does not protect you if you can not support 2 years of litigation. The only protection is not to get into such situations and avoid companies that doing this. The recommendation is only one: do your research before signing contract and ask questions. If somebody need lawyer who went trough this exercise and knows not only “dry law” but also Navision and MBS world rules and regulations you can contact me any time and I will recommend very good one. But again try to avoid it because it is very expensive. For now I want to say that I am very sorry that I did not help my friends who were pushed out of the country few years ago. And if anybody needs help I will be glad to help if I can.