I once had a job-hunting situation with a company regarding a position for which I interviewed. Relevant information on this situation was difficult to come by, so I’ll relate what I found so that you can be better informed. The company wanted me to sign a letter of commitment saying that if they were awarded a particular contract, I would be available.
The purpose of a letter of commitment is simple. The company has to demonstrate that they have key personnel in place, and thus can carry out the work of the contract. But since the contract hasn’t been awarded yet, they can’t hire said key personnel. That’s legitimate, and I was willing to sign such a letter…if certain conditions were specified. That’s where the questions came in. Would I be putting myself at risk by signing a document that simply said I would be available?
The letter said only this:
This letter is my commitment to [company]. Should [company] be successful in obtaining the contract for [services], I will be available and commit to begin employment upon execution of the referenced contract.
My concern was signing what looked like a legally binding document with no provisions allowing me to take another job in the interim between the bid and award. So I asked around. Here are the responses I got:
A reputable firm will likely share their codes of practice and policies regarding employees with a prospective hire. That is not to say they will always follow those codes and policies in a way that might be interpreted by most, but at least it gives some sense of direction. If a firm is unwilling to share these details, then one might want to question how they will deal with issues as they arise during employment. Do some sleuthing to identify current and past employees to gauge their experiences.
Avoid any contract agreement that is stacked solely in favour of the employer. What are they putting on the table to compensate for the commitment? My experience is that exclusivity requirements are often (almost always) intended to lock a particular expert from being accessible to competitors. Their interests are selfish and that might be a signal of their general perspective on employees — probably not a great space to be in.
Before entering into any such agreement, check in with one’s head, heart, and gut. What are each saying? If anyone of the signals is squishy, then beware. Use those instincts to propose reasonable clauses in the agreement. If the firm refuses to incorporate reasonable requests, that should signal additional cautions. In this regard, recognize that at this stage of the courtship, the prospective employee has maximum strength to negotiate. Once a contract is signed, the contract dictates future actions, and rarely will there be an advantage for the employee.
Be certain to incorporate explicit expiry dates or expiry conditions that terminate the agreement. Nothing should be vague and open to alternative interpretations.
If the firm is requiring total commitment such that the person could not pursue other offers, then the firm should be pressured to give just compensation. For example if there is an expected three-month lag between the end of the internship and the termination date of the agreement, and if the person is not allowed to accept alternative employment, then the firm should be willing to pay a salary for that period. If the firm does not win the bid, they would still pay for that period. Some questions and realities to ponder: if they cannot support a position without the pending contract, how will they maintain the position once the contract work has been done?
There is always a learning curve when starting a new job. If they are confident of winning the work, why not start the employment as soon as possible so that the person learns the internal working culture before the contract work begins. That way there is a better chance the performance of work will be exemplary and set them up for future contracts.
The request for a commitment letter in your situation is similar to a prime contractor requesting that a would-be subcontractor submit a price for work and guarantee that they will do the work for their quoted price if the prime wins the bid. Works great if your business model is selling your services to multiple clients. The problem is since you are looking for a full time position you may no longer be available at the time they need you. Is it possible for your LLC to sign the commitment letter, as opposed to you personally? If so, as long as either you or someone who is either a member of, or a contractor to, the LLC is competent & available to perform the services on behalf of your LLC, then this may be a way around your dilemma. If they literally want to pitch you and your specific resume/experience this won’t work. Of course, the company should know that it there is always a risk if they list a specific individual that that person may not be there for any number of reasons. The only other suggestion I have is that they compensate you now, in exchange for you agreeing to take yourself out of the job market for some period of time. Literally they would pay to guarantee your availability. This payment would be made at time of signing the commitment letter and if they win the bid, they would then compensate you for that work separately.
This is quite a difficult one. It depends, I think, how long you have to keep your commitment and what the rest of the letter says. If you are not allowed to get out of the commitment, than they should pay you a commitment-fee. l don’t think this system really works for a private consultant. you need a company, employees, to be able to sign this. (or a lot of money and no need to work).
Unfortunately there is no simple answer since such matters are usually governed by state laws which vary greatly…
Basically I thought it prudent to include three contingencies in the letter: 1) mutual agreement of acceptable terms of employment, 2) full understanding that until the contract is awarded I reserve the right to pursue other employment and accept employment with another employer, and 3) the understanding that this commitment will expire upon certain conditions. In the end, the company never negotiated a new letter draft and went with someone else who signed the original letter. I asked whether my concerns contributed to being passed over, and they said no, they just found someone with better fitting qualifications. I’ll take that response at face value, and would consider working for them in the future. But ultimately I believe my concerns, by simply protecting my interests, were perfectly reasonable.