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Indirect Contractor to Direct Contractor

Last Modified: 2012-05-07
Greetings - question for you...
I do some "side work" (10 hours per week) supporting sharepoint for a company.  I got this gig through a recruiting firm, who collects my hours and timesheet each week, then deposits the funds in my account on Friday.  Since starting this gig, I've now gotten some other clients as a direct contractor (ie. no help from a recruiter, just direct through me as a 1099 under my own "doing business as").

To the point - the manager at the side gig had previously tried to hire me, but it didn't work out.  This is how he came to have me help him on the side till he finds a full time person.  In the meantime, he's been looking for a full time person, but still hasn't found one that's a good fit.  Some of our recent discussions have bordered on the topic of possibly going direct to me instead of the recruiting firm.  This is a NO-NO due to the no-compete terms which require me to not compete with the recruiter for 1 full year.  There are, however, clauses in the no-compete for when the client wants to hire me as a full-time employee, but nothing about hiring me as a "direct" contractor.  

Has anyone been presented with this scenario (Contractor through recruiting firm wanting to convert to DIRECT 1099 contractor to the client) before?  My default is to just continue working through the recruiter and not stir up the hornets nest of contract law.  I was however, wondering if anyone else ever went through a scenario, and was able to buy out (or have the client buy-out) their contract with the recruiter much like what would happen if the client hired me as an employee.

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