NSW. Consulting role at a mid-tier accounting firm, $75k package. It's the industry I've been trying to get into and the role I actually wanted, so I'm keen. Then the onboarding pack landed and there are two deeds to sign alongside the contract, and one of them has me a bit spooked. Offer's only open three business days so I'm trying to sort this out quickly.
The one I'm stuck on is a Liquidated Damages Deed Poll. Two things in it:
For three years after I leave, I can't solicit any client I personally worked on. Fine, expected that.
But separately, for three years I also can't provide services to those clients. That one says nothing about who approached whom. So if a client rocks up at my next employer completely off their own bat and I get staffed on the job, that's a breach.
And the number is 75% of the total fees that client paid the firm that year, GST included. Not 75% of what I billed on them. Not just my service line. Their whole annual spend across the firm, audit and tax included, none of which I'd ever see. So ten hours of work for a client paying $200k across the firm and I'm on the hook for $150k. Two years of my salary.
What bugs me most is the asymmetry between the two clauses. The solicitation one says the damages apply "if, as a result of such breach the Company loses work of that client", so there's a causation test. The one about providing services has nothing like that. The breach is just doing the work. Both also let them claim actual damages instead, so 75% looks like a floor, not a ceiling.
Couple of other things that make me think nobody's looked at this document in years:
- It describes the business as chartered accountants and tax agents, and the second deed is all about audit and insolvency. Nothing in it relates to what I'd actually be doing. Feels like the same pack everyone's been handed since about 1995.
- No governing law clause in the deed at all. Contract says my state (NSW), deed's addressed to the Perth entity. Seems to matter, since NSW can read a restraint down and WA can't.
- The contract's own restraint clause cross-references clause 19.1, but clause 19 is Workplace Privacy. Points at nothing.
- Restraint period listed as 12/9/6/3 months with no indication which one is mine.
So:
Is this standard across mid-tier and big four, or is this mob an outlier? Anyone signed something with a fixed percentage like this?
Has anyone actually seen one enforced, or does it just sit in a drawer? I get that a flat 75% probably looks like a penalty rather than a real estimate of loss, but that's an argument you only get to make once you're already being sued and paying a lawyer.
Any point pushing back, or is it sign or walk? Anyone got the period shortened or the client definition narrowed?
And if it is non-negotiable, how much does it actually bite day to day? Do people just flag those clients as conflicts at the new place and stay off the accounts? If these are major accounts, would this not make you less attractive to a new employer, if you cant work on them?