How to Negotiate a Personal Services Contract

BACK IN THE DAY, only the bigwigs, like the company CEO, were required to sign a personal services contract. Within the new forced paradigm of process management, project managers will have even greater levels and scopes of responsibility, authority and expectations of bottom-line impact. It is because of this coming change in the definition and practice of project management that personal services

BACK IN THE DAY, only the bigwigs, like the company CEO, were required to sign a “personal services contract.”

Within the new forced paradigm of process management, project managers will have even greater levels and scopes of responsibility, authority and expectations of bottom-line impact. It is because of this coming change in the definition and practice of project management that personal services contracts will become increasingly commonplace for project managers in all but the smallest firms.

A personal services contract is not an employment contract, nor is it a non-disclosure or a non-compete contract. It may contain elements of those documents, but is much more than the sum of them.

A personal services contract is a broadly defined umbrella of scope where you temporarily lease parts of your soul to the devil to make sure you won’t wind up in legal hell and that your employer is similarly protected should you decide to quit or go on a hunger strike.

We’re all familiar with job scope from our exposure to contracts. The most important thing to watch out for is the potential for “scope creep” of the terms of your job responsibilities. Unilateral actions by your employer to increase your job’s definition of scope should be permitted only in the most minor of circumstances, if then, but preferably never at all.

The second most important thing, after making sure that there isn’t any chance for scope creep upwards, is to make sure that there can’t be any scope creep downward either.

It was an old trick of IBM in the days when its no-layoff policy was in full bloom that it would simply move people into sales positions, even if they had the personality of a piece of furniture. IBM would give them high and virtually unreachable sales quotas and, when they couldn’t meet them, fire them for non-performance.

A properly worded personal services contract can’t protect against every possible malicious scenario if your company really wants to screw you over, but it will at least give you a license to take legal action. That’s what all contracts are in the end, after all, nothing more than licenses to sue.

When presented with the new reality of having to sign a personal services contract just to keep your job, you need to create two wish lists of perks. One is the list of perks you really want and the other is your “cherry-picking” list of other perks that people in a similar position would want but that you don’t particularly care about. This is necessary for the negotiation process to be on an equal footing. Your employers have a handful of non-negotiables that they may or may not tell you about.

In the same manner, you need to have some “throwaways” to give up during the negotiations to make it appear as if you’re compromising.

What I always look for myself, my biggest personal hot button with these kinds of contracts, is any provision that makes me spend money directly out of my pocket for the benefit of the company. The contract, in addition to salary, should address allowances and reimbursement of expenses. Often, they are not included.

If I am required to spend my personal money, no matter how little, for the benefit of the company, I have to ask myself “why?” Call me old, suspicious and cynical (I am), but I have spent enough of my own cash in the past to be wary of employee financing (me!) of any part of what should be a company’s financial responsibility.

Watch out for a so-called “morals clause.” No matter how boring your personal life may be, if the company wants your actions to be saintly 24 hours a day, you could be violating the morals clause if you get a speeding ticket or get caught sneaking a mini-bottle into a college football game (not that I’ve ever done that!).

While it’s understandable that the company wants you to concentrate on your job and be a shining example of the company to the outside world, it’s not understandable or legal that a morals clause can be so loosely worded to permit your termination for anything less than a clear breech of the law.

Speaking of potential for termination, make sure that the scope language on reasons for termination is in plain English, not legalese, since this is the area that you and your employers are most likely to end up suing each other over. You want to make sure that someone too dumb not to be able to get out of jury duty will be able understand why your employers violated the scope language of your contract when they unjustly terminated you.

Never give up your right to a jury trial as an option for settling any disputes or violations of contract terms. Juries will be juries, but the members all are or have been working stiffs too. It’s to your advantage to have the option of a jury trial to settle things. If the company’s attorneys force you into agreeing upon binding arbitration to settle disputes or they won’t hire you, then it’s your choice — hold your nose and sign or simply walk away from what could be a bad deal.

Lastly, make sure this personal services contract has a fixed end date, usually not more than a couple to three years out. Language can be included to allow for a contract extension if you mutually agree. All terms of employment should be amendable at any time by either party as long as both parties agree. Nevertheless, you need an out in the form of a contract end date. You’re leasing your soul to the devil after all, not selling it wholesale, remember?

H. Kent Craig is a second-generation mechanical contractor and project manager with unlimited Master’s licenses in boilers, air conditioning, heating and plumbing. He can be reached by calling 919/851-9550, or via e-mail at [email protected].