Update: I have hired an attorney, but would like to get opinions of folks who have encountered situations like this before to see how they handled it. I am not seeking legal advice.

First off, I live in a right-to-work state, so my rights and recourse is very limited if they decide to fire me over this.

I signed on for a six month right-to-hire contract back in November. Everything has been fairly normal - great actually - until I got an email from the contracting agency saying that they needed to "update some paperwork." Apparently they have changed from a corp to an LLC and wanted all the paperwork re-signed with the LLC on the agreement. No problems signing all the things I've already agreed to, but they have slipped in a binding arbitration agreement. There is zero advantage I can think of in waiving my rights to legal recourse by signing this. I replied to them that I was not comfortable signing it and their reply was "signing this agreement is a condition of your continued employment."

To make their request even more strange, I have only 3 weeks left on my contract with them and I have an offer from the company I have been working for directly (through the contract agency).

I do not plan to sign the agreement, as it was not what I originally agreed to and I do not like Arbitration Agreements as they tend to be only beneficial for the employer (who gets to choose the arbiter).

My concern is that if they decide to terminate me for not signing the agreement they are trying to force on me, is that this might cause problems with the offer from the company I am converting to a full-time employee of that I am current working for under the six month contract.

My guess, since IANAL, is that if they terminate me, I am absolved from all obligations under the contract since they would be breaking the contract. At that point, the full-time offer would be independent of the contract agency.

I have discussed parts of this with the company offering me a full-time position, and they have verified that they have no obligations to the contract agency past six months.

I have told the contract agency that I will need my attorney to review the documents before I could agree to anything in order to buy some time to make the best decision for me.

If I do sign it, nothing will probably ever come of it, but I do not like being bullied or giving away my rights unnecessarily.


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    You should ask a lawyer where you live. They can explain what happens to your rights if you are fired. They can also explain what is enforceable or not with the new arbitration stuff. – atk Apr 24 '14 at 21:55
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    It depends on your original contract, but I would not sign. If they terminate you over it then they are in breach, which usually means they have some monetary liability. Because of this I'm certain that they are bluffing... – daaxix Apr 25 '14 at 0:11
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    re: "put on hold" --- I'm not asking for legal advice, I have hired a lawyer, just wanting community feedback on the situation. – Chris Ballance Apr 25 '14 at 15:31
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    If they terminate you your obligations under the contract are nixed but the company you were contracted too is still bound by the Contract to Hire agreement. I would not refuse to sign it but I would not sign it either. My lawyer would "take his time" in getting around to review it(because I would keep forgetting to take it to him, though I would not share the reason). Your company is going to lose quite a bit of money not to mention face if it lets you go with less than a month to your conversion. – IDrinkandIKnowThings Apr 25 '14 at 18:05
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    Cross off and initial the parts you want out, sign and turn it in. You have a 50/50 shot of someone just signing it and getting it over with since you have 3 weeks left. – user8365 Apr 25 '14 at 19:01

I would be suspicious of this. You might have to speculate on why they would shift from Corp to LLC. While at the time you started they might not have any reason to arbitrate anything, they might have gotten in a situation (which you don't know about) where there needs to be a determination of fault. The fact that this is near the end of your term is interesting, to say the least.

Assume that 1) they aren't bluffing, and 2) their need for you to sign this agreement isn't incidental. In short, you are risking the assumption of a liability that may or may not have anything to do with something you did or failed to do. Assume that any explanation they give you leaves out their actual motive.

If they cut you off early, go to work for the employer directly as planned - after the contract period ends. If, after your contract period is over, they ask you to 'give someone a statement', refuse. In general, if someone is asking for comments without it being clear what context it's in, you may be walking into some sort of trap. In such circumstances the less said, the better.

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    In addition, since they are in breach the OP can start at the new company as soon as they terminate him...that is if the new company doesn't have a contract with the current employer with a time restriction on hiring... – daaxix Apr 26 '14 at 2:52
  • The new company has a contract with the middle-man consulting company saying they can hire me after 6 months with no additional cost or obligation. – Chris Ballance Apr 28 '14 at 1:15

If the binding arbitration agreement has no impact on you it is simplest to just sign it.

With 3 weeks left I do not see them terminating you. Also since you are working for them they are making money off of you so they would loose income if they terminated you.

It is a little sleazy of them to slip this in if they indicated the new contract was just for the LLC name change. If you just don't want to sign it, or you feel there may be a monetary consequence to signing it, just stall them for the next 3 weeks.

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    Excellent suggestion. "I'm having a hard time getting a review of this new agreement on my attorney's calendar." goes a long way. – Wesley Long Apr 25 '14 at 19:52
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    I've told them that "I will need to have time for my attorney to review the new documentation" and I got the documents to my lawyer this morning. We'll see how long that lets me stall for. In the past I've always let the hiring company cover all the paperwork for conversions to full-time. Is it smart to resign from the consulting agency explicitly in this kind of situation? – Chris Ballance Apr 25 '14 at 20:20
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    I wouldn't sign it see @meredithpoor's comment above. – daaxix Apr 26 '14 at 3:14
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    @Chris: No, if you voluntarily resign you can lose several benefits. – Ben Voigt May 5 '14 at 6:39

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