Committment Letter? 1

[Moonstone]

My company is preparing a proposal for an upcoming project and I am a proposed team member. However, to fullfill the RFP requirements, they have asked me to sign a letter of committment to the client, which commits me to the entire duration of the job if we get the project. I am currently working on a project which will end next year and the new project starts next year (if we get the job). My question is, what are my legal rights? Am I compelled to sign this letter. What if I sigh the letter and want to quit before the project starts. Anyone had similar experience. I can talk to my boss, but wanted to get a third party opinion. Thanks in advance for your answers.

 

[MintJulep]

This sound very unusual to me.

Typically, a letter such as that would list the people identified in the proposal and indicate that the proposing company commits to having them "or approved substitutes" available for the project. Signed by an officer of the company.

 

[GregLocock]

Slightly O/T. Who does the approving ? A very old trick is to get a senior team together to bid the work and set it up, and then they mysteriously evaporate as soon as the concept stuff is done and the hard work begins.

Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[BillBirch]

Moonstone,
I have seen projects where clients have tried to get bidding companies to commit specific individuals to a project. This has arisen as a result of -
- People being proposed who aren't even working for the company (but claim that they will in the event of an award).
- Heavy hitters in the company being proposed, but being replaced with less experienced people after award.

In one case, an oil company I worked for nominated certain positions within their design consultant's team as "key personnel" and included in the contract that the consultant should pay so much compensation per key person in the event that they did not complete the project.

In all cases that I have seen, however, it has only been a commitment between the company and the client.

In your case, I believe your labour contract would prevail which, I assume would only address severance in terms of required notice period.

I believe the important thing to remenber is that you may confuse the issue by signing such a commitment, but I don't believe that you are signing away your basic contractual rights as agreed when you joined the company.

The only way that they could really enforce such a commitment is for you and the company to mutually agree to replace your existing contract with another that locks you in - not likely! If you don't want to go that route, they would have to fire you and subject themselves to an unfair dismissal suit.

Also remember that companies will often make bizarre commitments to clients when they sense a big contract looming, but are quite often powerless to force their employees to make a back-to-back commitment.

In my experience, companies, rather than try to lock in employees to make such a commitment, often offer a completion bonus, only payable upon completing the project - with no penalty for non-completion.

It is based on very old, fundamental, freedom of trade (almost anti-slavery) statutes.

Regards and good luck,
Bill

 

[MintJulep]

Greg asks

Who does the approving?

From the proposer's point, the trick is to make the client think that they have the right of approval for team substitutions while not being burdened by pesky contractual obligations to actually obtain approval.

 

[kelowna]

Moonstone,

I went through the same process myself a few years ago. My company put a proposal for a job, my name was on it and I had to sign a letter committing myself to the job if awarded. I had my doubts and after talking to management, being re-assured and e-mailing them so that my opinion and concerns were on record, I signed. In my case, we did not get the job.

I would not worry too much. I do not think that document is legaly binding from your part, although I would like to hear the opinion of people more experienced in 'legalese'.

I would suggest that you put on writting your concerns and that you specify that signing the document is subject to agreement of work conditions and you being employed by the company and all that. That might not be sent to the client, but it would clarify your position within the company.

These requirements are becoming very common. Most people on this forum will know of companies advertising for a position, getting several resumes and then sticking them in a proposal for a client. I have seen that. I also have more than a suspicion that a company I worked for several years ago put my name in proposals for some time after I left.
I have also seen jobs in which just after award, the first thing done is the re-submittal of most of the key personal. Some contracts will say that it is subject to the client's approval, but can they say no? In fact, a bit out of topic, but I would like to hear other people's experiences and opinion on this.

 

[flamby]

Legally speaking, any committment is void, unless it is for some consideration. For this reason there are legal bonds of value of $1.00. If you remove this exchange amount, the statement that I will work for you for my life is not worth the paper on which it is written, despite all the signatures.

Ciao.

 

[MiketheEngineer]

Ask your lawyer??

 

[sundale]

I would not sign that third party document as an engineer employee.

As an employee, what projects you work on (or do not work on) are ultimately determined by your management, not yourself.

If you truly have the authority to pick and choose your projects, then you could perhaps sign such a document. I expect that you ultimately probably do not have this level of self determination, however.

What happens if management later tells you to get on another project or you are fired? You break your committment promise either way with that scenario and the decision is really not in your hands. I would not put myself in such a position.

Your firm's management and/or the owners need to sign a committment letter stating which employees they will promise to use to staff the project.

 

[TheTick]

It seems out of line for management to require this from an employee. Apparently they do not understand their limits.

Sign it and forget it. While you work for them, you'll go where assigned anyways. It can't keep you from quitting or taking a new job.

 

[GregLamberson]

My experience is similar to BillBirch's - when this comes up it is nothing but the concern of the Owner company in maintaining some continuity over the life of the project - I have seen the same thing where there is a penalty clause for removal of key personnel. Those will never stop anyone from leaving a company to work elsewhere, the main reason for it is to provide penalties for the company should they decide that the engineering manager that has been on Project A for 8 months (on a 16 month job) needs to go over to Project B because it thinks it's in it's own best internal interests.

I don't see these as being enforcable as far as not allowing a person to change jobs, in fact there are strict laws to the contrary.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[PhilBW]

In order for a contract to be legally binding, both parties have to sign the document, and both parties have to offer something to the other. For instance, if they agree to pay you some money and you agree to stay on the project until completion, both parties are offering something--they are offering money and you are offering your comittment of time. If you don't fulfill your end of the agreement, they can sue you for breach of contract.

However, if you sign a letter comitting your time to the project, but they neither sign the document nor offer you something in return, you are under no legal obligation to follow the requirements of the letter.

Phil

 

[civilperson]

You can only be held liable if you are the principal of the company, otherwise it is just unenforceable verbage with respect to you,(some small liability for the company if you are switched out without permission from the client).

 

[cvg]

I hear a lot of legal advice being given by non attorneys. Great advice and I believe most of it, but take it with a grain of salt. Ask your attorney to give you a true legal opinion.

 

[cry22]

You got to read the fine print of course and CVG has said it (you could ask your employer to pay for the legal dvice).
Frankly, I would commit to availability, but not to the price. If I were to leave, I just say that I am still available but now you got to shoot the dough this way, all of it.

 

[csd72]

I signed one of those - it was called a marriage certificate!

I dont think my wife would appreciate me signing any more.

 

[BJC]

Moonstone
If your being asked for a commitment ask them for one.
If it's a two year project ask them for a commitment to pay you for two years no matter what.
I have heard these call "No cut, no taxi" contracts. I don't know where the name came from.
If they get the contract you agree to work on it, if they don't they pay you anyway. They are paying you for missed opportunities. The "no-taxi" part means they can't pay you and put you in a corner somewhere seperating the pepper from the fly s_ _T. If they do, you get the money and walk.
If your important enough to be vital to the project, then your worth the extra consideration.

 

[JSFSWISS]

I agree with sundale.

It is up to management to decide what project you work on, let them sign the document, if possible.

I believe if your manager assigns you the projects, ask her/him kindly to make the commitment, on her/his own behalf, not yours, and when the time comes you will gladly join the team.

You do not want to put yourself in any future commitments, if you are not sure what your future holds in that company.

"Your firm's management and/or the owners need to sign a committment letter stating which employees they will promise to use to staff the project."-I AGREE WITH SUNDALE (GREAT STATEMENT)


Thank You
CNCMILL