The following blog breaks down some of the basics of trademark law, including important terms and courses of action in […]
- Define the Parties (e.g. Company and Client) and Effective Date of the Agreement
- Define the “Labor Staffing Services” being provided:
- Who is providing the services? (e.g. Company to provide such services to Client)
- Reference any relevant Exhibits with further descriptions and breakdowns of such services
- Define any other relevant terms (e.g. “Assigned Employee” is the employee assigned by Company to Client)
DUTIES OF THE PARTIES
Duties of the Company (Supplier of Labor Staffing Services)
Spell out what labor staffing services are to be provided, including any relevant limitations thereof.
Some typical services provided (which are often defined in an Exhibit to the Agreement) are as follows:
Provision of Labor Staffing –
Clearly define the services provided
Typical services provided include employee recruiting and interviewing
Workers’ Compensation Insurance –
Company typically provides such insurance for Assigned Employees
This provision will typically reference a later Insurance provision in the agreement
Screening of Employees –
Certain tests and background checks of employees will be implemented
This is usually spelled out in an Exhibit to the Agreement
If Client is unsatisfied with Assigned Employee, there must be a replacement system
Typically, Client will give notice, whereby Company will assign a new employee
Employee Waiver –
Assigned Employee waives benefits Client gives to regular staff
Duties of the Client (Receiver of the Labor Staffing Services)
Spell out the duties of the Client as it pertains to their receipt and management of the Assigned Employee
Some typical services provided are as follows:
Supervision of Work –
Client typically controls the premises and processes related to Assigned Employee’s work
Client typically controls the quality of Assigned Employee’s work product
Accurate Job Description –
Client should provide an accurate description of the duties to be provided by Assigned Employee, including any relevant risks thereof
Such work often requires Company’s prior written approval
Client Benefits –
Client must typically not provide Assigned Employee with benefits provided to regular staff
Client must typically not require Assigned Employee to operate a vehicle
If operating Assigned Employee is required to operate a vehicle in the course of such work:
Client usually accepts full responsibility thereof
Client usually acquires insurance to cover such activity, including:
Workers’ Compensation Insurance
Automobile Liability Insurance
Provision of Equipment, Supplies, and Training –
Client typically must provide all equipment, facilities and supplies necessary for Assigned Employee to undertake such work for Client
Notifications of Complaints and Incidents –
Client typically must provide prompt notice to Company as it pertains to any and all formal and informal complaints, allegations or incidents relating to Assigned Employee, including:
Workplace safety, including, without limitation:
Threats of violence
Violations of OSHA (Occupational and Safety and Health Act)
Discrimination, including, without limitation:
Age, gender, sex, etc.
Client will typically promise to not hire away any Assigned Employee
If Client permanently hires any Assigned Employee, then Client must typically pay Company a Conversion Fee (see below)
Regular Review Meetings
Typically, both parties will meet regularly to discuss the progress of their work relationship as well as review the progress of Assigned Employees
The parties also typically agree to cooperate with one another by providing assistance to each other as well as give prompt notice with anything relevant related to their agreement and Assigned Employee (including health and safety issues, work progress, etc.)
Define what information is “Confidential”
What are the obligations of the parties regarding Confidential Information?
Safety and OSHA Compliance
Client will typically warrant compliance with OSHA and well as provide a safe workplace
Company will typically educate the Assigned Employee on such matters
Compliance with Law
Both parties represent and warrant they will comply will all applicable laws (state, federal, etc.), including matters of data and privacy
Both parties represent that they will maintain applicable licenses and permits to continue their respective businesses
What payment must Client provide to Company for the provision of labor services?
This might be a flat rate, percentage of Assigned Employee’s income, or some combination thereof
What payment must Client provide to the Assigned Employee for such labor services? Some relevant issues to consider:
Reimbursement for Expenses
Taxes (including income and sales)
Client should notify Company when Assigned Employee is performing work under a government contract covered by the Service Contract Act of 1965, the Davis Bacon Act and Related Acts or any applicable federal, state or local governmental requirement
Assigned Employee’s rate is typically offset by such government rates
If Client permanently hires away Assigned Employee, Client must typically pay Company a fee for Conversion
Such fee is usually spelled out in a relevant Exhibit to the Agreement
What are the costs of late payments?
Consider: interest, costs of collection, including attorneys’ fees
TERM AND TEMINATION
How long is the Agreement?
When does the Agreement start running? Upon the Effective Date?
Extension; Renewal Terms
Is the Agreement renewable?
Does the Agreement extend automatically?
Is written notice needed for any extensions or renewals?
Are there any specified events where the agreement automatically terminates (e.g. incurable breach vs. material breach)? Is there Termination for Convenience? What about Termination for Cause?
What is the timeline and notice required for termination?
Is there any period where breaches can be “cured” before termination occurs?
What is the effect of termination? Consider ongoing payments, intellectual property rights, licenses, etc.
INDEMNIFICATION AND LIMITATION OF LIABILTY
How and to what extent to the parties indemnify each other?
Does this include officers, directors, employees, agents of the Parties?
Is indemnification mutual/reciprocal between the Parties?
What are the conditions for indemnification to trigger (e.g. threat of a lawsuit)?
How does such indemnification relate to intellectual property rights (see above)?
If any of the above representations or warranties turn out to be false, will that trigger indemnification?
Limitation of Liability:
Are there any types of claims, damages or other causes of action for which one Party will not be liable to the other Party? To a third party? What is the scope of such a limitation (i.e. does it cover tort, strict liability, contract)? Consider the following:
What warranties are express or implied?
Are implied warrantied disclaimed?
Is this provision reciprocal (i.e. does it apply to both Parties)?
What sort of policies must Company maintain?
What are the limits of such policies? Consider:
The limit for each “occurrence” triggering such insurance; and
The total cap (umbrella) limit for all claims.
Must Company provide Client with evidence (certificates) of such insurance policies? Typically, yes.
Typical insurance policies include:
Workers’ Compensation Insurance
Comprehensive General Liability and Property Damage Insurance
Excess Automobile Liability Insurance
What about insurance for Company Sub-Contractors?
This will often include Workers’ Compensation Insurance, Comprehensive General Liability and Property Damage Insurance, and Excess or Umbrella Coverage
Consider all of the above and whether or not it applies to the Client
INTELLECTUAL PROPERTY RIGHTS
Intellectual Property Rights
Consider trademarks, trade names, trade secrets, copyrights and patents.
Who owns such rights? What about modifications, adaptations, derivative works, etc.?
Assignment/Work for Hire
Typically, Company will assign all such rights to Client, as it pertains to Assigned Employee’s work for Client
In the alternative, all work provided by Assigned Employee to Client can be deemed a “work for hire” (under the Copyright Act) that is owned by the Client
Force Majeure. What events (beyond the control of either Party) relieve the Parties of their respect obligations under the Agreement? Consider such events as: war, floor, epidemic, civil unrest, tumult, etc.
What sort of notice is required (e.g. certified mail, overnight delivery with tracking)? What are the respective addresses or other contact information of the Parties to where notice must be sent?
Entire Agreement (Merger Clause). Does this Agreement reflect the entire agreement of the Parties and supersede any prior agreements (oral or written) between the parties? Are any exhibits, specimens, attachments, etc. to be included as part of the Agreement?
Amendments. May the Agreement be amended? If so, how? In writing, signed by both Parties?
If one Party fails to enforce its rights under the Agreement, will that count as a waiver of such rights? Typically, the Parties will agree to the opposite. If either Party fails to enforce its rights under the Agreement, it will not constitute as a waiver of such rights or any other rights under the Agreement. Is this a reciprocal right between the Parties?
Obligations of Third Parties. Does each party represent that its undertaking under this Agreement does not violate any of its contractual obligations, express or implied, undertaken with any third party and that such party has the right and authority to enter into this Agreement?
May the Agreement be assigned or delegated in any way? If not, is the prior approval of the other Party required for such assignment? Must such approval be in writing? Does non-assignment apply to both Parties?
May either party subcontract any of their obligations to secondary vendors?
Governing Law; Venue. Under what laws will the agreement be interpreted and/or governed? What about conflicts of laws? What is the venue for this Agreement? Does this include state and federal courts in that venue?
If any part of the agreement is illegal or unenforceable, does that affect the rest of the Agreement? Typically, the parties will agree that any such unenforceability or illegality will not invalidate the rest of the agreement.
Headings; Interpretation. Are the headings of the agreement meant solely for information purposes? Do the headings affect the interpretation or enforcement of the agreement in any way? Typically, the parties will agree that the headings do not affect the agreement.
Can the Agreement be executed in multiple counterparts?
Independent Contractor; Relationship of the Parties. Are the parties independent contractors to each other? Does this Agreement create any sort of joint venture between the parties?
What sort of remedies (e.g. injunctive relief, damages) are the parties entitled to under the Agreement?
Exclusivity. Is this a non-exclusive vs. exclusive relationship between the parties? Carefully consider this.
The parties have caused this Agreement to be executed by their duly authorized officers.
The parties understand they are entering a binding agreement.
The parties represent and warrant their signing parties can bind them to this Agreement.
Spell out the Labor Staffing Services being provided in greater detail
Spell out additional specifications related to the workplace, safety, etc.
Spell out the payments, pricing and other relevant specifications related to wages (e.g. wage increases)
Additional Background Checks and Testing
Spell out what sort of employee screening will take place (typically by the Company)
Specify what constitutes “Conversion” of an Assigned Employee as well as the fees for such Conversion
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