Employer-Contract Problem

gcmani

Registered Users (C)
I am employee of Company "A" based in NJ and work at client place in PA through Company "B". I worked for "A" for more than 4 and 1/2 years now and got green card in Jul 2004. Now I want to open my own S-corp and make corp-to-corp directly with "B" and resign from "A".

"A" contends that I cannot leave him and continue to work at client /"B" till one year after resignation. (By the way client outsourced the project to "B") Also "A" do not offer any bargain or talk to me or reply my emails except saying that they will create problems for me. This is because at the time of joining back in late 1999 I signed agreent that has a clause saying I will NOT profit directly or indirectly with "A"'s clients. (In this case client is "B" or actual client does not matter)

The clause says that I should not violate it but does NOT mention any consequence.

I resigned from "A" and made Dec 31 2004 my last date and started process for setting up my own S-Corp. "B" says they have no problem in giving my company corp-to-corp contract directly but stays away from the problem with my employer "A" and advises me to solve that on my own with them.

Pl.let me know your experiences whether this is just threat tactic or it has legal standing to put me in trouble if I go ahead.
 
gcmani said:
I am employee of Company "A" based in NJ and work at client place in PA through Company "B". I worked for "A" for more than 4 and 1/2 years now and got green card in Jul 2004. Now I want to open my own S-corp and make corp-to-corp directly with "B" and resign from "A".

"A" contends that I cannot leave him and continue to work at client /"B" till one year after resignation. (By the way client outsourced the project to "B") Also "A" do not offer any bargain or talk to me or reply my emails except saying that they will create problems for me. This is because at the time of joining back in late 1999 I signed agreent that has a clause saying I will NOT profit directly or indirectly with "A"'s clients. (In this case client is "B" or actual client does not matter)

The clause says that I should not violate it but does NOT mention any consequence.

I resigned from "A" and made Dec 31 2004 my last date and started process for setting up my own S-Corp. "B" says they have no problem in giving my company corp-to-corp contract directly but stays away from the problem with my employer "A" and advises me to solve that on my own with them.

Pl.let me know your experiences whether this is just threat tactic or it has legal standing to put me in trouble if I go ahead.

This is my opinion and I am not a lawyer. I will suggest you talk to a lawyer before taking any action.

That said...
Your previous employer 'A' can take you to court with the kind of contract you have. Generally this doesn't happen and more over there is no panality listed in the contract so there are very few chances that 'A' will take you to court. Anyway, I would suggest one alternative. Talk to another company lets say 'C'. Ask them to subcontract with 'B' and then your company sub-contract with 'C'. This way you didn't go directly to 'A's client and you do not know how 'C' knows 'B'... :) Of course you may have to give a small share to 'C', like a $/hr kind of, but that is worth it. If you have problems finding a 'C' (which you should not have), let me know and I can help you with some contacts.

Hope it helps!
 
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I think that it has legal standing and the company A might take action. You need to some how make company B to convince A to let you off or you have to some how make company not take any action against you (try to remember any loop holes of company A. May be they have not paid in bench to you or to some other employee). Use such information to counter threaten company A.
 
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