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I'll Never Do THAT Again!

Friday, July 16, 2010   (6 Comments)
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I subcontracted a part of an assignment to an individual market researcher to conduct personal interviews with C-Level executives. The project consisted of five phases to be conducted over a four month period. The first two phases included conducting interviews and the researcher was contracted to work on one phase with the potential for additional work on another phase, depending on the client’s decision.

The researcher signed my formal subcontract agreement which included provisions stating that all of the subcontractor’s work products belonged to my company; the subcontractor would not publish any notice, press release, etc, claiming the client’s name as his own client; the subcontractor would not seek direct employment with the client or compete with my company for a period of one year on similar projects.

The researcher did in fact contact the client without my knowledge and proposed to the client that he would do the same work for a later research phase of the project for less money. The client hired the researcher directly and my company was not asked to continue other phases of the project.

Which of the following would you choose to do? Please tell us how you would handle this situation in the comment section below.

1. Bring a lawsuit against the subcontractor since he breached the contract.

2. Contact the client and explain the contractual agreement I had with the subcontractor prohibited him from seeking work on his own related to the current project.

3. Do nothing since the client went along with hiring the researcher.

4. Other? Write in your action____________


Michael E. Moore says...
Posted Saturday, July 24, 2010
For all of those who advise against a lawyer, I agree. Attorneys are trained to settle disputes equitably and amicably. We who are on the short end of a stick think of attorneys as a weapon. That's a wrong approach. it becomes a waste of money where only the attorneys win. On the other hand, your agreement with your client should have included a clause that they would not hire your resources. If you did not have that you have no recourse with them. If you had it then you might consider firing the client. They obviously aren't any more ethical than your contractor. In that case it is only a matter of time before you get burnt again. Otherwise you might as some have said, work out a mutually equitable agreement between you and your client. As for your sub, an equitable agreement is to fire them outright and prepare to serve as a reference for them. Nothing is more important than loyalty.
Thomas K. Casey CMC says...
Posted Thursday, July 22, 2010
1. Lawsuits are a waste of your time and money. Do you have enough time over the next 3-4 years to follow through with it? Move on. 2. I would contact the client and make him aware of the situation, letting him know that he is not part of your potential action. You might get a financial response (e.g finders fee etc.) You didn't mention whether you knew or worked with this sub in the past. If so, you should have had some idea about his character. If not, you should not have contracted the sub without a working basis or recommendations. I only partner (never "sub") with CMCs, IMC members, or those I have worked with in the past.
Davis M. Woodruff CMC PE says...
Posted Wednesday, July 21, 2010
First, accept it and move on. Forget about getting lawyers involved. No one will win. I would let the client know in a very nice way that you appreciated doing business with them in the first phases of the project and hope the new relationship works out for the later phases, even though they are using a person who had a non-compete with your company and was acting on your behalf in the earlier phase of the project. That way, the client knows what happened but you are taking the high road while leaving the door open for future business (if you even wanted it at this point). It should be obvious to them that there are integrity issues with the person they are now using at a lower fee. I agree with Chris, if the researcher is certified or a member of a professional organization, then report him to that organization as well.
James E. Mittler CMC says...
Posted Wednesday, July 21, 2010
I think you should take this as a learning experience and move on. It seems obvious that you did/do not have a strong relationship with the "client" or s/he would have contacted you directly when the subcontractor first approached them. I don't know all of the facts, but it would appear that you did not initially advise the client that you would be using a subcontractor to do some of the more basic work and possibly even introduced the subcontractor as an employee to make your firm look bigger which might have been objectionable to the client when they learned that "Joe" was a subcontractor leading them to negotiate with him/her. Likewise, not knowing that "Joe" was a subcontractor might have led the client to feel that they were being overcharged by you, again leading them to negotiate with the subcontractor. I think that if you go the the client to complain it will look like you are crying "poor me." You might talk to the client to gain clarification but not to pressure them.
Chris N. Lambrecht CMC says...
Posted Wednesday, July 21, 2010
I would check to see if the researcher is a member of MRA, their professional association. If so, they have their own code of standards and if you and the researcher cannot come to some agreement, then report his to the association. With regards to the client, you need to justify exactly what your added value to the market research is. I also agree with Francis, as there needs to be full disclosure of the situation to all parties regardless. No need to threaten client, but perhaps ask how he would like to resolve the issue.
Francis Statton says...
Posted Wednesday, July 21, 2010
I would contact the client. I believe it is an obligation to let them know what your contract relationship was, according to a signed document. This should have meaning to the client, that they are dealing with a less than reputable resource. It should also act as a notice that you will be deciding what kind of legal action you should be taking, and that the client could also be involved, without wishing to be. Perhaps a settlement could be arranged, that would satisfy both you and your client. There will be no satisfaction with the research vendor. Hang tough.

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