IT contractors: Read your contracts!

My first IT job out of college was working for a cable TV outfit, where I was surprised to discover that virtually all development of new apps was routinely assigned to an outside consultancy. Full-time IT employees like me did maintenance. Period. I became friendly with a couple of the contract guys and discovered they were billing at rates several times higher than what any of us were getting paid.

It didn’t take an economic brain trust to figure out the next move. Unless you had aspirations to management — and personally I’d rather get my teeth drilled — contract programming was the way to go. So I dropped an e-mail note to a reasonably well-known contract firm, sent my résumé, and arranged an interview. Piece of cake. I was on my way to my first contract gig.

The night before I was scheduled to report to the client, the contract firm finally e-mailed me its contract. It had a few terrifying provisions the firm hadn’t mentioned before.

First, I was supposed to agree that I would never sign up to work independently at any firm with which the contract firm had a relationship. Whoa! I wouldn’t have minded if they’d asked me to wait a year or two before working directly for a client they had set me up with. But “never” and “any” and “relationship” could totally sink my chances for future employment anywhere.

Next, I was required to hand over my Social Security number and agree to a background check and drug test. OK, fair enough. But the contract contained a blanket disclaimer that my new employer could distribute my personal information and investigation results to anyone, for any reason. Um, not so fast!

Finally, if there was any dispute about the contract, it would be adjudicated in a state far, far away. And guess who would get to pay both parties’ legal fees, regardless of who started the litigation, and regardless of who won. Yeah. Me.

I called the contract firm, explained my problems, and calmly offered to negotiate a few changes in the employment contract. I was told that the contract was strictly non-negotiable. I pointed out that nothing is ever really non-negotiable. Now the HR person started shouting over the phone. She was going to inform the client about my unprofessional behavior, she was going to point out that I was the reason the deal fell through, she would see that I never worked in this town again, and so on and so on.

I hung up on her in mid-rant. It remains one of the most satisfying moments of my professional life. And of course nothing bad happened. I found another contracting firm with friendlier hiring policies and was off and running.

Since this first hard lesson, I always check with friends before answering offers from any contracting firm I don’t know. I also ask any company I’m considering working with to send me its contract before we enter any further negotiation. I’ve even become pretty good at legalese.

I find that most contract consulting companies conduct business with integrity and professionalism. But if you decide to take the plunge, be aware that at least a few outfits routinely practice behavior most of us would consider wildly unethical. Know who you are dealing with. And be sure they conduct their business in the same way you conduct yours.