Senior associate in the corporate and commercial team Sarah Liddiard originally wrote this article for Influence, which is a digital content hub for public relations professionals.
Today contractors can pretty much work from anywhere. Whether you’re engaging the services of a digital nomad or a hotshot freelancer in the US, here’s what you need to consider…
Increasingly, many PR agencies may find themselves using a contractor based in Europe or further afield. It’s not unusual these days for an existing contractor to move abroad to become a digital nomad, or it may be that a first-choice freelancer is already based outside the UK.
Here are my top tips for ensuring you properly protect your business interests and cover the important legal aspects when engaging PR contractors based overseas…
1. Do your due diligence
It’s essential that you properly check out the consultant and understand if they are providing their consultancy services personally or via a limited company (or some other registered entity), so you can ensure that your contract is with the correct legal person. You should also check whether any contract in place with your end client/s allows you to use subcontractors. Legally, it is often more costly and time-consuming to enforce a contract against an overseas-based contractor, so you’ll need to carefully assess the cost/benefit to your business of using the subcontractor you proceed.
2. Non-compete provisions
I’d normally include a restriction to prevent the consultant from competing with your business for the duration of the consultancy agreement and for a set time following termination of the agreement. While UK-based consultants might be respectful of your relationship with your end-client, overseas contractors might be prepared to risk their relationship with you and approach the end-client to try and work with them directly. Sadly, this recently happened to a client of mine. Such action is unprofessional and could damage the relationship with your own client, so it’s important to have the appropriate provisions in your consultancy agreement to warn off them off this type of behaviour. You should also be prepared to take action against an overseas contractor should they breach these provisions.
3. Employment status
The contractor will normally be engaged on a self-employed basis and will not be treated in the same manner as your own employees. Be extra careful (maybe even seeking legal and tax advice) if your agency continually renews or re-engages the same consultant, or if you start treating them in a similar way as your own employees such as providing them with equipment or inviting them to Christmas parties. I know some global agencies are tempted to do this, but it may have implications on the contractor’s employment status with you and therefore should be avoided.
4. Intellectual property rights (IPRs)
As the contractor will not be an employee of your agency, you should ensure that IPRs such as copyright – which will arise in written work – are assigned to your business in the consultancy agreement. Any licence which enables the contractor to use any of your IPRs, templates, or branding should terminate automatically when the consultancy agreement expires. You should also take practical steps to ensure an overseas-based consultant can only access certain documents by using a secure file sharing system and that access is immediately stopped on termination. Also try to obtain written undertakings from overseas contractors to confirm that any documentation is deleted once their contract comes to an end.
5. Indemnity and insurance
If you are permitted to use subcontractors, then the contract with your end-client is likely to make your business responsible for any acts or omissions by your overseas consultant. I often include an indemnity which makes the subcontractor liable to reimburse your business if they breach any term of the consultancy agreement – this is usually enough to ensure compliance by the consultant. In addition, as most insurance policies do not cover the self-employed consultants you may subcontract work to, you need to ensure the consultant has sufficient insurance in place. If they don’t, are you prepared to cover losses out of your own business profits? I would expect that the overseas consultant has professional indemnity insurance as a minimum, but ultimately, their insurance coverage should cover the same risks and for the same amount of cover that your end-client requires from your business.
6. Data protection
It has been some time since GDPR was introduced in 2018, but since Brexit, UK businesses may be processing both EU personal data and UK personal data, meaning that you may have to comply with both regimes. If the overseas contractor is based outside the European Economic Area (EEA) and isn’t based in a country which has “adequate” data protection laws (according to the UK/EU), then you’ll need to ensure that further safeguards are in place for transferring any personal data internationally such as the ICO’s International Data Transfer Addendum to the EU standard contractual clauses.
7. Confidentiality
It’s also important confidentiality obligations are included to protect any information confidential to your business or your end-client. For example, it’s vital that you clearly include your right to apply to court for an injunction urgently to prevent disclosure of confidential information. Always clearly mark information as confidential. You can also include the terms of the consultancy agreement itself as constituting confidential information.
By including these points in your agreement with your overseas consultant, it’ll help ensure that the relationship is clearly defined and you have mitigated any major legal and commercial risks which could arise.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.