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First of all I am not after legal advice. This is a bit TL;DR but I have a summary at the bottom, I'm explaining it all so people can offer insightful advise.

Situation

I need to explain my present situation to explain why I've decided to go the route that I have. I have recently been asked to find another job, due to the local economy struggling. I haven't been sacked but the cause is due to my present employer no longer being able to afford to employ me full time.

I looked for jobs for a while but there is very little around, particularly for the level that I'm at, and I don't want just another job that I'm not going to find challenging or enjoy.

My current position sees me work as an architect and software manager. The vast majority of work is internal, but I do a little external consulting for my employer.

My decision

I've decided to go out on my own as a consultant / contractor. I already have quite a fair bit of work lined up. But while I establish my business I need to make money to support my family. The eventual outcome is to monetize some products, but product development takes time.

The issue

My current employer has offered me part-time employment with them. They are primarily a retail operation although since my employment have moved extensively into web work (mainly CMS-based sites) and to a lesser extent, programming, which is where I come in. This is undertaken both on a consulting basis as well as several internal projects. There is also a very large IT support business. The software development is largely ancillary although there is a large focus on (basic) web development. Software development will largely stop when I leave, if not completely

Conflict of Interest

If I take up the part time role I need to have a contract written about conflict of interest. I will see a lawyer for legal advise however I need to know what to allow myself.

TL;DR

Working as a consultant as well as for a company doing software part time, I can think of the following areas to define in the contract to allow myself to operate:

  • When I work for them, I am employed by them and will not publicise or disclose my own business details
  • I will not, outside of work, pursue their clients offering services
  • They will not own any right to anything I produce whilst I am not employed by them
  • If an existing client approaches me from their own research then it is fair game
  • If they have a client leaving then I am entitled to work for them, and to either approach them or have them approach me

Can you think of any other areas to approach my lawyers with that I have missed?

I want to allow my business to grow and flourish and to protect myself.

Case in point - one client of theirs has told me they want me to do their work, and it was unsolicited.

Community
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Sam
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    I want to know why this was down voted? I have followed the FAQ to the letter - this site is getting ridiculous with the sheer number of down votes with no explanation. – Sam Mar 08 '13 at 07:59
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    I've downvoted since this is asking for career advice (which is very clearly outside of the scope of Programmers). Your situation would be equally valid in any other field where you create a product. I suggest you get it migrated to the careers SE site, or just look on there to see if it has already been answered. – vaughandroid Mar 08 '13 at 08:52
  • Baqueta, thank you for explaining your down vote. I am not asking for career advice, I am asking specifically for advice on aspects that relate to carrying on a business and freelancing advice which are clearly in the FAQ. – Sam Mar 08 '13 at 08:56
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    OK, I can buy that you're asking for business/freelancing advice. On that basis can I suggest you edit most of the first 2/3 of your question? A lot of it isn't really relevant (e.g. your skills) and gives it a 'careers-ey' flavour. Also, I still think the contract advice you're after isn't specific to programming. – vaughandroid Mar 08 '13 at 09:14
  • @Baqueta good point. I will revise. I was "trying to set the tone" ;) – Sam Mar 08 '13 at 09:22
  • @Sam - Down votes happen; it's not the end of the world. They're not worth over-reacting to. Some people misunderstand the scope of the site and / or what your question may be asking. FWIW, I believe your question is on-topic and constructive per the terms of the FAQ. Freelancing and business concerns are valid topics. –  Mar 08 '13 at 14:41
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    @GlenH7 I don't feel I'm overreacting; I have been active here only for about a week and I constantly see valid questions (within the scope of the FAQ) down voted without explanation. Just being upfront and asking for an explanation :) – Sam Mar 08 '13 at 23:16
  • @Sam - you would probably like to read [this programmers meta question](http://meta.programmers.stackexchange.com/questions/5654/are-you-still-confused-about-what-programmers-is-for?cb=1) then. Meta and chat are the place to get a better understanding about particular questions being closed. And if you feel an on-topic, constructive question was incorrectly closed, you can always flag it for moderator review. –  Mar 09 '13 at 01:00
  • you should specify what locality you work in as well, various countries have their own nuances. – Keith Nicholas Mar 11 '13 at 01:32
  • @KeithNicholas - Australia - says it in my profile :) – Sam Mar 11 '13 at 01:57

3 Answers3

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Don't give up anything you don't have to. You're starting off wrong. Your employer has cut you back, and may very well do it again (that's the way these things go). You're doing something for them that they don't want to be doing ("Software development will largely stop when I leave, if not completely"). Neither of these justify you conceding points, especially at the start of negotiations.

  • "When I work for them, I am employed by them and will not publicise or disclose my own business details" This is generally-good ethics, and depending on where you live and work, may be required under law (e.g., in the USA, the "duty of loyalty").

  • "I will not, outside of work, pursue their clients offering services" Don't offer this to them, and don't be quick to agree if they suggest it. If your employer will effectively be exiting "your" business when you leave, they shouldn't see you as a competitor.

  • "They will not own any right to anything I produce whilst I am not employed by them" I assume you mean "... produce on my own time whilst ..." (because sometimes this just isn't the case).

In addition to what you've listed yourself, you should clarify your rights to what's in your head. In some jurisdictions, lawyers had successfully advanced the "doctrine of eventual disclosure" as an effectively-perpetual extension of non-disclosure and non-compete agreements that you may have already signed. Your new contract should, at a minimum, explicitly supersede and replace any previous NDA/NCA in its entirety, and clearly specify how long you will not solicit your employer's existing customers.

More than that, since your employer seems to be terminating a line of business, you should consider positioning yourself to them (and thus to their clients) as the safety net for their clients. You're not your employer's competitor, you're a white knight rescuing their customers from abandonment and allowing your employer to gracefully exit a business they don't want without destroying relationships with their clients.

Ross Patterson
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  • Ross thanks so much for your thoughts. I guess the big thing is that if they keep me on they may expect me to continue organising the software development, for them. – Sam Mar 08 '13 at 12:22
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    Ross' advice is spot-on. I had a similar situation recently, where my former employer had a couple of specific clients that they had little interest in maintaining after I left, so we came to a mutual agreement (between the company, myself, and the affected clients) that, at the company's choice, they could defer any future work to me if I chose to take it. The client is happy because they don't lose support, the company is happy because nobody else knows the client code as I do, and I'm happy because extra potential income. – GalacticCowboy Mar 12 '13 at 14:21
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I think you're on the right track with your considerations. Everything you have described is transparent and ethical.

I would consider the following:

  • Have a defined intellectual property agreement in place with your current employer. What you're suggesting is a reasonable interpretation and aligns with most legal practice. Having an IP agreement documented though will help prevent future misunderstandings and headaches.

  • Identify what is required in order to document when and where work is performed. An obvious example is that you won't use your employer's resources in order to perform your consulting work for your clients. You'll likely need your own computing equipment and software for your consulting work, but you may also need to generate a log book indicating what hours were worked and for which projects. ie.
    8AM - 12PM "revised DB diagrams for client ABC"
    1PM - 5PM "refactored data access layer for employer"

  • Likewise, have a defined agreement regarding existing clients, any cool-off periods, and / or similar anti-poaching considerations. You'll want something concrete to indicate when a former client of theirs can employee you.

  • Setup terms regarding the scope of your part-time work and expectations. "Other duties as assigned" can become a very onerous job requirements when you're working to build up your own clientele base. It's very easy for them to turn around and say "No, no, we expected you to go out and drum up business for us."

  • You'll also want to negotiate the hours and times you are working as a part-time employee. Having defined windows of employment with them makes it easier to delineate when your work is theirs and when your work is yours.

  • Have a conversation with your boss and your boss' boss. They likely regret having to cut you back to part time and should be understanding that you need to build up a consulting base. Having open and honest conversations with them will make it easier for them to understand what your second job is and how that may impact your work for them. This is a case where honesty and openness will be your best policies.

  • Consider how you want to work with your client base if and when your employer is able to move you back to full-time employment. You'll want to think this through as it's likely your future clients that know of your employer will be asking about this.

  • Discuss with your attorney how you will transition from part-time to contracting with your former employer. At some point, your consulting business will be self-sustaining but your former employer may still need your services for the various internal projects that you mentioned.

  • Excellent Glen, thanks for your input - some great things there, particularly the part about drumming up business for them. I hadn't considered that at all. – Sam Mar 08 '13 at 23:15
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What about contracting for your present employer? Would they be willing to strike you off their employee roster and pay you as a contractor instead? Then they are just like your other clients and you (and they) have the same contractual obligations with all of them.

I'm not sure if that's really getting at the reasons you posted here, but that's my 0.02.

Octopus
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  • Thanks for your advice. I don't want to contract for my present employer, I want a "safety net" of sorts and that means permanent, part-time employment. – Sam Mar 08 '13 at 09:35
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    I think the safety net is all in your head. You won't get benefits at part-time hours, and you'll be making 1/3 the wage. Also, by contracting, you give your employer(client) the luxury to call you in as needed. This allows him to control his costs and tie it to his profits, and potentially extend how much work he gives you. – RyanJMcGowan Mar 10 '13 at 09:03