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EXHIBIT 10.20
Client Services & Co-Employment Agreement
This Client Services & Co-Employment Agreement (Agreement) is entered
into by and between Vincam Human Resources, Inc., and any of its subsidiaries
or affiliates to which it may assign this Agreement (Vincam), and Towne
Services, Inc. (the Client Company) is effective on 12:01 a.m. of the first day
of first payroll period which Vincam begins its services (effective date).
3/16/98
1. THE PARTIES' INTENT: THE CO-EMPLOYMENT ARRANGEMENT: By entering
into this Agreement, the parties intend to create a co-employment arrangement
to better facilitate the Client Company's core business by achieving certain
economies of scale and scope in human resource-related areas. Because the
co-employment arrangement is a special way of addressing complicated human
resource issues, this Agreement allocates between Vincam and the Client Company
the areas of responsibility and liability associated with the co-employment
arrangement.
2. THE CREATION OF THE CO-EMPLOYMENT ARRANGEMENT: A co-employment
arrangement is established by Vincam assuming some of the Client Company's
rights and responsibilities with respect to the "Worksite Employees." The term
"Worksite Employees" means individuals who have submitted a completed
employment application to Vincam, been approved for hire by Vincam, and been
assigned by Vincam to the Client Company's worksite to perform their services
under the Client Company's direction and control. The term excludes 1) those
employees hired by Vincam only (and not the Client Company) to provide the
services offered by Vincam (i.e., Vincam Corporate Employees), or 2)
individuals who may be providing services to the Client Company through a
temporary staffing arrangement, as independent contractors, or any other
arrangement. During the term of the Agreement, the Worksite Employees are
employees of both Vincam and the Client Company. Vincam intends the term
"co-employment" to have the same meaning as designated by some legal
authorities in which a company (i.e., Vincam) by contract reserves and
exercises a right of direction and control over the Worksite Employees assigned
to the Client Company's location with the Client Company retaining sufficient
direction and control over these employees as is necessary to conduct the
Client Company's business and without which the Client Company would be unable
to conduct business, discharge fiduciary responsibilities, or comply with the
law.
2(A) THE CONVERSION PROCESS: Upon execution of the Agreement, Vincam
undertakes the conversion process during which the parties mutually reach an
agreement as to which of the Client Company's employees will become Worksite
Employees. The parties agree that Vincam will not employ any Client Company
employee who is not authorized to work by law. The Client Company agrees to
transfer to Vincam's payroll all employees identified to become Worksite
Employees provided each such employee accepts employment offered by Vincam. The
Client Company retains the sole responsibility for any employee not chosen as a
Worksite Employee if the person provides services to the Client Company during
the term of this Agreement. When the conversion process is completed, Vincam
assigns the Worksite Employees to the Client Company's worksite to perform the
job duties required by the Client Company at that worksite. The addition of
Vincam as a co-employer is communicated in writing to the employees so that
everyone has a clear understanding of the co-employment arrangement. Because
the co-employment arrangement begins with the Effective Date, the Client
Company acknowledges that it is solely responsible for any employment-related
investigation, demand, claim, and/or litigation that existed or accrued, or
which relates to facts or circumstances which occurred before the Effective
Date. The Client Company acknowledges that such responsibility includes, but is
not limited to, payment of attorney's fees, investigation costs, damages,
liability, or similar charges, costs, or expenses, and that the Legal Defense
Benefit, Section 11, is not available under these circumstances.
3. HOW THE CO-EMPLOYMENT ARRANGEMENT AFFECTS THE CLIENT COMPANY'S
BUSINESS: With the creation of the co-employment arrangement, Vincam assumes
employer's rights as to the Worksite Employees, including without limitation,
the right to hire, fire, discipline, and pay wages. Although the Client Company
no longer has sole employer rights, it retains the right to reject the
assignment of any worker to its worksite by Vincam, provided that such
rejection does not violate any law. The Client Company retains such direction,
supervision, and control of the Worksite Employees as is necessary to conduct
its business on a day-to-day basis. Further, the Client Company retains full
responsibility for its business, products, and services; the determination of
the level of wages to be paid above the Fair Labor Standards Act (FLSA) minimum
wage and salary requirements; worksite premises; and any third party,
subcontractor or non-Worksite Employee.
4. MUTUAL DUTY TO COOPERATE; SHARING OF INFORMATION: In recognition of
the effort necessary to provide the services described in this Agreement, both
parties agree to cooperate with each other. The parties acknowledge that the
duty and obligation to cooperate is a material term of this Agreement. Vincam
agrees to keep the Client Company informed about potential and actual employee
problems as they arise. Vincam will also provide the Client Company with copies
of documents contained in a Worksite Employee's file at a reasonable cost
provided the Client Company gives Vincam reasonable notice of the need for such
files. The Client Company agrees that it will cooperate with Vincam in the
following fashion:
A) promptly and accurately inform Vincam of all employee issues,
including but not limited to, employee work-related injuries or accidents, the
employees' job functions and duties, number of hours worked, any union
organizational activities, any formal or informal work-related complaints,
including complaints of harassment or unfair treatment, charges of
discrimination, governmental investigations, threatened employment-related
lawsuits, or any similar employment-related developments;
B) assist, as necessary, in addressing employee issues, including but
not limited to, implementing policies and procedures recommended by Vincam,
participating in any employment-related investigations, providing reasonable
accommodations when required by the Americans with Disabilities Act (ADA) or
other comparable laws, and taking the steps required for workplace safety;
C) give Vincam (or its designated agents and/or attorneys) reasonable
access to the worksite as well as access to information, data, files, etc.,
pertaining to the employees, which access includes the right to audit such
information or examine the premises on a periodic basis;
D) consult with Vincam before taking any employment action which could
be construed as adverse to the employee (e.g., firing, demoting, changing job
functions or responsibilities, transferring, etc.);
E) cooperate in the defense of any employment-related claim, charge,
lawsuit, investigation, audit, etc., which may be filed against Vincam, the
Client Company, or both; and
F) provide any other assistance reasonably necessary to perform the
duties of this Agreement.
This duty survives the termination or expiration of the Agreement as
long as the cause of action arose during the existence of the Agreement. This
duty to cooperate does not apply if the parties are litigating against each
other. Because the duty to cooperate is critical to Vincam's ability to provide
services under this Agreement, the Client Company's failure to abide by this
provision is a material breach for which Vincam could immediately terminate the
Agreement pursuant to Termination, Section 10.
4(A) SHARING OF INFORMATION: 1) INFORMATION PROVIDED TO VINCAM BEFORE
THE EFFECTIVE DATE. Before entering into this Agreement, the Client Company
agreed to provide and has provided Vincam with all pertinent information
regarding the Worksite Employees and the benefits provided to them, including
the Client Company's ownership structure, the employees' compensation packages
or information relating to the Client Company as a federal contractor, if
applicable, such as the amount of a certified payroll. This information was
gathered to assess whether the Client Company was an appropriate candidate for
Vincam's services. In recognition of the sensitive nature of the information,
Vincam represents to the Client Company that it has kept that information
confidential and promises that it will continue to do so. By executing this
Agreement, the Client Company represents to Vincam that the information was and
continues to be accurate.
2) SHARING INFORMATION DURING THE AGREEMENT'S EXISTENCE. The Client
Company further agrees that the duty to cooperate includes the duty to share
with Vincam all information relating to the Worksite Employees and the worksite
on an ongoing basis, including but not limited to, promptly providing Vincam
with complete and accurate information pertaining to anything affecting the
worksite and the Worksite Employees (e.g., hours worked, eligibility for
benefits, non-qualified pension plans, employee accidents and injuries,
classification of an employee for workers' compensation purposes, rejection of
the assignment of a Worksite Employee). The Client Company agrees to collect,
verify, and transmit to Vincam's administrative office not less than three (3)
business days before each payroll date any information required to determine
accurately the amount due to the Worksite Employees and Vincam. The Client
Company agrees to give Vincam written notice before it closes a plant,
facility, or takes any other action which would require compliance with the
federal Worker Adjustment Retraining Notification Act (WARN), or makes an
assignment for the benefit of creditors, files for relief under the U.S.
Bankruptcy Code, or seeks the appointment of a receiver. The Client Company
agrees that it will notify Vincam at least ten (10) days before a WARN
notification is required to be given to the Worksite Employees. The Client
Company agrees to continue to make complete and truthful disclosures to Vincam
of any employment-related information Vincam needs to perform the duties of
this Agreement. Each party agrees to notify the other immediately of any claim
to which the indemnification may apply (see Indemnification, Section 8).
4(B) CONFIDENTIAL, PROPRIETARY INFORMATION, TRADE SECRETS, AND
INTELLECTUAL PROPERTY. Because each party will have access to information which
may be confidential, proprietary, and/or trade secrets of the other party, the
parties agree that they will treat confidentially any such information
identified to the other as being confidential and not disclose the information
to any third party (except a trusted advisor, such as the party's attorney,
accountant, or financial advisor) unless required by law. The parties agree
that, if a party gives its trusted advisor any confidential, proprietary
information, and/or trade secrets of the other party, it will take all
reasonable steps to ensure that its trusted advisor preserves the confidential
nature of the information. Any information, data, etc., which the other party
advises the other is confidential, proprietary, and/or a trade secret is
included in this Section, whether such information is considered as such under
the law. The parties agree that this Agreement and information contained in any
attachments to the Agreement, all Vincam forms, manuals, handbooks, or other
materials prepared by Vincam and used to perform the duties of this Agreement
for the Client Company are considered proprietary. The Client Company is
responsible for taking the necessary precautions to designate and safeguard
information it considers confidential, proprietary and/or a trade secret. The
parties agree to use the Confidential Information to facilitate the performance
or enforcement of this Agreement and for no other purpose. If the Agreement is
terminated or expires, this provision survives for five (5) years after such
event or until the information becomes known to the general public. The parties
acknowledge that a breach of this provision would create irreparable harm and,
therefore, the non-breaching party would be entitled to an injunction or similar
remedy to specifically enforce this provision. The parties specifically
acknowledge that money damages alone may not be an adequate remedy for any
damage which might be suffered as a result of a breach of this provision.
Nothing in this provision shall be construed as prohibiting the non-breaching
party from any other remedy or remedies including, but not limited to, recovery
of damages. The parties also acknowledge that the Client Company is the owner
of any intellectual property rights existing before the term of this Agreement
or created during the term of the Agreement relating to the business of the
Client Company, including but not limited to, inventions, patents, copyrights,
and trade secrets. The Client Company, as owner of the intellectual property,
is responsible for ensuring that these are protected as well as for payment of
any associated costs.
5. VINCAM'S SERVICES AND RESPONSIBILITIES: Vincam will co-employ
Worksite Employees and will provide the Client Company with human resource
services, employment practices management, and other services more particularly
described below.
5(A) VINCAM'S RESPONSIBILITY REGARDING THE PAYMENT OF WAGES AND OTHER
EMPLOYMENT-RELATED COSTS: As a co-employer of the Worksite Employees, Vincam
assumes sole responsibility for paying wages to Worksite Employees without
regard to payment by the Client Company to Vincam and collecting any paying
employment-related taxes (including those pertaining to the Federal Insurance
Contributions Act, Federal Unemployment Tax Act, the applicable income tax
withholdings, State Unemployment Insurance, etc.) and providing mandatory
employee benefits (including workers' compensation), and other voluntary
employment benefits as may be provided to the Worksite Employees. (See
Subsection 5(D) regarding employee benefits.) However, the Client Company
acknowledges that, to perform these responsibilities, Vincam relies on the
Client Company to supply it with correct information regarding hours worked,
job classifications, and other data Vincam needs to compute accurately wages,
taxes, and other employment costs. The Client Company agrees to provide Vincam
with complete and accurate information and agrees to reimburse Vincam for any
costs it incurs if such information is wrong (whether intended or not). This
remedy is in addition to any other remedy available to Vincam under this
Agreement.
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5(B) VINCAM'S MANAGEMENT OF EMPLOYMENT PRACTICES: Part of the services
Vincam provides to the Client Company is guidance regarding good management
techniques and compliance with various employment laws. For any Worksite
Employee covered by this Agreement, Vincam will assist the Client Company by
providing compliance guidance regarding the following laws, as amended from
time to time:
1) the FLSA and/or comparable state or local laws;
2) the Consolidated Onmibus Budget Reconciliation Act (i.e., COBRA, the
federal group health plan continuation coverage);
3) the Immigration and Nationality Act and the Immigration Reform and
Control Act;
4) the Consumer Credit Protection Act and/or comparable state or local
laws;
5) the Employee Retirement Income Security Act (ERISA) and other laws
covering employee benefit plans (e.g., group health, cafeteria, and 401(k)
Plans);
6) the Family and Medical Leave Act and similar state or local leave laws;
7) the Occupational Safety and Health Act (OSHA) and comparable state or
local laws, regulations, or ordinances. Vincam retains a right of direction and
control over the management of safety, risk, hazard control at the Worksite
affecting the Worksite Employees, including responsibility for performing
safety inspections of the Client Company equipment and premises, and
promulgating employment and safety policies;
8) the National Labor Relations Act. The parties acknowledge that the
Client Company is the employer which would be the party to any collective
bargaining agreement because the Client Company exercises control over the
primary employment conditions subject to a collective bargaining agreement.
Vincam acknowledges that the union is the exclusive bargaining representative
for employees covered by any valid collective bargaining agreement. Vincam
will abide by the terms and conditions of any valid collective bargaining
agreement whether in existence as of the Effective Date or if subsequently
entered into by the Client Company and a union; and
9) all other applicable federal, state, or local employment laws (e.g.,
Title VII of the Civil Rights Act, the ADA, the Age Discrimination in
Employment Act, etc., as well as those pertaining to federal contractors if the
Client Company is a government contractor), except for those obligations which
the responsibility of the Client Company as set forth in Client Company's
Responsibilities, Section 6, below. Vincam does not provide services relating
to Title III of the ADA (e.g., making the facility accessible to the public,
etc.), however, and Vincam is not responsible for the cost of reasonable
accommodation under Title III.
5(C) WORKERS' COMPENSATION COVERAGE: Vincam will maintain workers'
compensation coverage for each Worksite Employee employed as of the Effective
Date in accordance with the laws of the states in which Vincam provides
services under this Agreement. For a person hired after the Effective Date to
be covered under Vincam's workers' compensation policy, the Client Company must
submit to Vincam the person's completed employment application within two (2)
business days from the date the Client Company selected the person for
employment, and Vincam must approve the person for employment as well as assign
the person to the Client Company's worksite. If these two conditions are not
met, the Client Company is responsible for providing workers' compensation
coverage for that person. (See Section 6(E) for the Client Company's
responsibilities regarding workers' compensation.)
5(D) EMPLOYEE BENEFITS: 1) THE CONVERSION PROCESS AND EMPLOYEE BENEFITS.
As a part of the conversion process, Vincam will provide group health plan
coverage to all of the Client Company's identified COBRA participants who are
covered under the Client Company's active group health plan provided the
following conditions are met: a) the participants were covered under the Client
Company's plan on the day before the Effective Date, b) Vincam hires all of the
employees at the Client Company's worksite at the time of the conversion
following the procedure described in The Creation of the Co-Employment
Arrangement, Section 2, c) the Client Company terminates the group health
insurance plan covering these employees, and d) the Worksite Employees
immediately thereafter become covered under a group health plan sponsored by
Vincam. Such coverage will be in accordance with the general COBRA rules. If
these conditions are not met, then the Client Company continues to be
responsible under COBRA for these individuals.
2) EMPLOYEE BENEFITS DURING THE AGREEMENT'S EXISTENCE. Vincam agrees to
assist in administering the Client Company's policies as they may from time to
time be amended, regarding employee benefits such as vacation, sick leave,
family leave, and other comparable benefits. Vincam further agrees to offer to
Worksite Employees certain employee benefits, such as group health insurance,
401(k), and other benefits as identified in the Employee Benefits Attachment to
this Agreement provided and for so long as all eligibility requirements and
governing laws for the specific plan are satisfied. The parties acknowledge
that Vincam is the only sponsor of such plans and is solely responsible for
their administration and compliance with the law. The Client Company agrees
that it does not and will not co-sponsor any of Vincam's employee benefit
plans. If the eligibility requirements of a particular plan cannot be met,
Vincam retains the discretion not to provide, or to discontinue, the benefits
of that particular Vincam plan while this Agreement is in effect or to
terminate the Agreement.
5(E) LICENSES; ACCREDITATION. Because Vincam operates in some states which
require professional employer organizations such as Vincam to obtain a license
or registration to perform these services, Vincam agrees to maintain any
applicable licenses or state registration. Vincam agrees to operate in the
unregulated states using, as a minimum, the standards imposed by the regulated
states. Vincam is also accredited by the Institute for the Accreditation of
Professional Employer Organizations (IAPEO) which has established service
standards. As part of its dedication to quality service, Vincam agrees to
maintain such accreditation and to use its best efforts to comply with such
service standards.
5(F) INSURANCE. Vincam agrees to maintain all employment-related insurance
required to perform the services of this Agreement, such as workers'
compensation. The parties acknowledge and agree that Vincam is not an insurer,
procurer or broker of insurance products, or agent selling the Client Company
insurance or insurance products. As an employer, Vincam provides the Worksite
Employees with workers' compensation and other employee benefits. The Client
Company is not a party to any of Vincam's insurance contracts which insure any
of Vincam's employer obligations or employee benefit plans. Additionally, the
Client Company acknowledges that it is not a co-sponsor of such plans. The
Client Company understands that the cost of the employee benefits or Vincam's
employer obligations is part of Vincam's cost of doing business and does not
constitute an additional expense charged to the Client Company.
6. CLIENT COMPANY'S RESPONSIBILITIES. The co-employment arrangement
involves a shifting of certain responsibilities between two employers. Because
the co-employment arrangement does not create identical corresponding
responsibilities between the parties, the Client Company has some
responsibilities which Vincam does not and vice versa. To have a clear
understanding of these duties, this Section sets forth the Client Company's
responsibilities under this Agreement. The Client Company agrees to comply with
the laws described in the Vincam Services and Responsibilities, Section 5,
listed above. The Client Company recognizes that Vincam's provision of services
does not relieve the Client Company of responsibility and liability for those
matters over which it has control. Additionally, the Client Company agrees to
comply with any other laws affecting or regulating its business, including but
not limited to, professional licensing, etc. The following is a list of the
Client Company's responsibilities:
6(A) FOLLOWING VINCAM'S POLICIES AND PROCEDURES: The Client Company agrees
to follow Vincam's policies and procedures relating to the Worksite Employees,
such as reporting changes of employment status, requests for leave, workers'
compensation injuries, termination, etc. The Client Company agrees to follow the
procedure for hiring individuals described in Vincam's Services and
Responsibilities, Section 5(C). The Client Company agrees to use
Vincam-provided forms (e.g. employment application, change of status, etc.) for
the Worksite Employees. The Client Company acknowledges that Vincam has the
right to retain and reassign a Worksite Employee who has been terminated by the
Client Company (i.e. employees whose assignment to Client Company's worksite
has been rejected).
6(B) WORKSITE SAFETY. Because the Client Company owns and controls the
worksite, the Client Company agrees to comply with all federal and state health
and safety laws, regulations, ordinances, rules, etc., as amended, including
but not limited to, those governing OSHA, workers' compensation, etc. The
Client Company agrees to pay for, provide, and ensure the Worksite Employee's
use of any equipment required by law or reasonably required by Vincam or its
insurers for worksite safety. If Vincam informs the Client Company of an unsafe
working condition or a violation of any applicable law, the Client Company
agrees to take the necessary steps to rectify the unsafe condition or correct
the violation within a reasonable period of time and acknowledges it is
responsible for payments associated with remedying the problem. Failure of the
Client Company to make the necessary correction means the Client Company assumes
all responsibility associated with the condition or violation and that Vincam
has the right to terminate the Agreement immediately in accordance with the
provisions set forth in Termination, Section 10.
6(C) WAGE AND HOUR LAWS. Because the Client Company controls the worksite
and the scheduling of the Worksite Employees, it agrees to obtain and
accurately report to Vincam the total number of hours worked by each Worksite
Employee in accordance with the FLSA. If the Client Company fails to comply
with the FLSA and similar state laws or fails to disclose to Vincam a practice
that results in an employee not being paid for all time worked, this will be a
material breach of the Agreement, and the Agreement may be terminated in
accordance with Termination, Section 10. Failure of the Client Company to make
the necessary corrections for a noted violation of the FLSA means that the
Client Company assumes all responsibility associated with the condition or
violation.
6(D) PREVENTION OF THEFT, DESTRUCTION OF PROPERTY, ETC. The Client Company
is responsible for implementing and enforcing worksite procedures necessary to
prevent the misuse, destruction, misappropriation, theft, or embezzlement of
personal, real, or intellectual property of the Client Company or its customers
or clients.
6(E) WORKERS' COMPENSATION. To contain the cost of workers' compensation
insurance, the Client Company agrees to participate in a modified (or light)
duty program. The Client Company agrees that, during this Agreement, it will not
employ anyone outside the co-employment arrangement (e.g., non-Worksite
Employees) without Vincam's knowledge, except for independent contractors. The
Client Company agrees that, if it hires anyone outside the co-employment
arrangement (after having informed Vincam), it will obtain full workers'
compensation coverage and name Vincam as a certificate holder. Under those
circumstances, the Client Company will provide Vincam with a certificate
reflecting the same and which contains a provision requiring the insurer to
notify Vincam in advance of any termination of coverage. The Client Company
agrees to require all independent contractors to provide evidence of workers'
compensation coverage before the contractor starts work at the worksite. (See
Section 5(C) for Vincam's responsibilities regarding workers' compensation.)
6(F) COMPLIANCE WITH THE ADA AND OTHER COMPARABLE LAWS. Because the ADA
and comparable laws impose affirmative obligations on employers to provide a
reasonable accommodation to a qualified individual with a disability and to
make a public facility accessible, the Client Company agrees that it will pay
the costs associated with complying with these laws. The Client Company
acknowledges that it, and not Vincam, assumes the responsibility for providing
regulatory compliance with Title III of the ADA (i.e., public access to
facilities).
6(G) EMPLOYMENT TAXES. The Client Company agrees not to make any taxable
payment of any kind, except profit sharing or pension plan distributions
pursuant to the terms of a qualified plan, to
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any Worksite Employee without Vincam's knowledge. This requirement is necessary
because Vincam assumes the responsibility under Vincam Services and
Responsibilities, Section 5(A) for complying with laws regarding the payment of
wages. If the Client Company makes such a payment, it has materially breached
the Agreement which may be terminated in accordance with the provisions set
forth in Termination, Section 10.
6(H) EMPLOYEE BENEFIT PLAN. The Client Company agrees and acknowledges
that it is not authorized to offer or continue any welfare benefit (e.g.,
medical, dental, life or disability, 401(k) plan, cafeteria plan, profit
sharing plan, or retirement plan) to any Worksite Employee without Vincam's
knowledge and prior written consent. The Client Company agrees to integrate
and coordinate any Client Company-sponsored benefit plans with those sponsored
and maintained by Vincam.
6(I) WORKSITE EMPLOYEE'S PERFORMANCE; THE SUCCESS OF THE CLIENT COMPANY'S
BUSINESS. The Client Company acknowledges that Vincam does not guarantee the
Worksite Employees' performance because Vincam does not direct, supervise, or
control the day-to-day operations of the Client Company's business. If any law
requires a Worksite Employee to have or maintain a special license or be
supervised by a Worksite Employee with such a license, the Client Company will
ensure that the Worksite Employee is so licensed or supervised. The Client
Company will pay for the costs associated with obtaining such license.
Further, because the Client Company controls its business affairs, it
acknowledges that Vincam is not responsible for any loss of revenue, product,
business, or injury to the Client Company or a third party due to any act or
omission of a Worksite Employee.
6(J) INSURANCE. In recognition of the co-employment arrangement, the
Client Company agrees to maintain the types of insurance listed below with a
minimum combined single limit of One Million Dollars. The Client Company
agrees to provide Vincam with a copy of the insurance certificate regarding the
applicable insurance when requested. The Client Company agrees to inform
Vincam immediately if any of the Client Company's insurers materially modify
the terms of any insurance discussed below, inform the Client Company of a
pending termination of coverage, or terminate coverage.
1) Automobile coverage for all vehicles used in connection with the
business, whether or not owned by the Client Company. Such insurance must also
cover public liability for bodily injury and property damage for each vehicle up
to the above-stated limit and uninsured motorist or PIP equivalent coverage of
at least the minimum limits required by state law.
2) General liability coverage for the premises, operations, products,
completed operations, contract and broad form property damage, independent
contractors, personal injury with coverage for host liquor, dram shop, and full
liquor liability as applicable.
3) Professional licensing, malpractice, and/or liability coverage if
the Client Company renders professional services or provide services which
require employees to be licensed.
4) Any fidelity bond reasonably required because of the Client
Company's business.
6(K) THE NATIONAL LABOR RELATIONS ACT. The Client Company agrees to
abide by the National Labor Relations Act. Because the decision to operate as
a union or a non-union business is a core business decision belonging solely to
the Client Company, the Client Company is responsible for all decisions related
to a union organizing campaign, the negotiation of a collective bargaining
agreement, and the processing of grievances and arbitrations under the
collective bargaining agreement.
7. PAYMENT. The Client Company agrees to pay the amount specified in
the Pricing Attachment which amount will be invoiced in advance of the Client
Company's payroll dates. The Client Company agrees to pay Vincam's invoice no
later than forty-eight (48) hours before the Client Company's regularly
scheduled payroll. The Client Company agrees to pay through Automatic
Clearing House (ACH) debit transfer or with a bank wire transfer. Any amount
not paid when due will be assessed a late charge of five (5) percent or the
maximum allowable by law. The payment of a late charge does not prevent a
default under this Agreement, or the enforcement of any remedies upon default
including termination of this Agreement as provided in the Termination, Section
10, The Client Company acknowledges that the price is subject to adjustment
(i.e., upward or downward) on the anniversary date of the Effective Date,
except that the portion of Vincam's fee that relates to employee benefits will
always adjust in accordance with the benefit plan or insurance policy renewal
or anniversary date. Any change in price (exclusive of the employee benefits
portion) will remain fixed until the next anniversary date of the Effective
Date.
Because of Vincam's obligation to pay the Worksite Employees, Vincam
retains the discretion to require the Client Company to give Vincam a deposit or
letter of credit in an amount equal to one invoice. If the Client Company
defaults on its payment obligation to Vincam, any deposit immediately becomes
Vincam's money or, if the Client Company provided a letter of credit, Vincam has
the immediate right to draw down on the letter in the amount of the default. On
each anniversary date of the Effective Date, Vincam will evaluate the Client
Company's payment history and financial wherewithal to determine whether a
deposit should be obtained, the amount of deposit should be adjusted or be
returned to the Client Company, or, if applicable, if the letter of credit
should be canceled. When the Agreement is terminated, Vincam agrees to return
any unused deposit or cancel the letter of credit, if any. Vincam agrees to
maintain any deposit in an account segregated for that purpose, accruing an
interest rate as set forth in the Pricing Attachment. Because Vincam's
obligations to pay the Worksite Employees is derived from this Agreement, the
Client Company agrees that Vincam's only obligation is to pay the FLSA or state
minimum wage or salary required to any Worksite Employee where the Client
Company has breached the Agreement by failing to pay the invoice when due. None
of the remedies contained in this Section constitutes a waiver of any other
remedies available to Vincam in the event of a default of the Agreement.
8. INDEMNIFICATION. These Sections describe the scope of each party's
indemnification obligations. The parties agree that the indemnification
provision shall not be limited to claims, expenses, or liabilities for which one
of the parties is solely liable, but also applies to claims, expenses, or
liabilities for which the parties are jointly liable. In the event of joint
liability, if either party pays funds in connection with a claim, expense, or
liability which is subject to the indemnification provision in excess of its
prorata share, the other party will indemnify that party for the excess amounts.
Each party agrees to notify the other of any claim or judgment to which this
indemnification provision may apply. Further, the parties agree not to settle
any claim without the prior written consent of the other party, which consent
will not be unreasonably withheld. Each party's indemnification obligation
survives the termination or expiration of the Agreement.
8(A) SCOPE OF THE CLIENT COMPANY'S INDEMNIFICATION. The Client Company
agrees to indemnify, protect, defend, release, and hold Vincam, its parent,
subsidiaries, affiliates, employees, directors, officers, and agents harmless
from and against any and all liability, expenses (including attorney's fees and
court costs), losses, and claims for damage of any nature whatsoever, whether
direct or indirect, as though expressly set forth and described herein, which
Vincam may incur, suffer, become liable for or which may be asserted against
Vincam arising from or in connection with (i) the Client Company's negligent,
fraudulent, willful, or reckless performance or nonperformance of any of its
responsibilities or obligations under this Agreement; (ii) any actions or
inactions of the Client Company's employees, officers, directors, agents, or
independent contractors, including without limitation, negligence, errors or
omissions, tortious conduct, violation of any statute, law, or regulation, or
criminal or dishonest activity, while under the supervision, direction, or
control of the Client Company; (iii) the Client Company's noncompliance with
any of the responsibilities enumerated in Client Company's Responsibilities,
Section 6 to the extent that the Client Company has direction and control of
such responsibility; (iv) the Client Company's business, product, or service,
claims for defective products or services rendered at or produced by the
operations at the worksite, and the fiscal integrity of the Client Company; (v)
any negligence, tortious conduct, violation of statute, law, or regulation,
criminal or dishonest activity attributed to the Client Company; (vi) any
claims based on facts or circumstances relating to the Client Company's
activities that occurred or existed prior to the Effective Date; or (vii) the
Client Company's failure to adhere to Vincam's procedures or recommendations
regarding employment practices.
8(B) SCOPE OF VINCAM'S INDEMNIFICATION. Vincam agrees to indemnify,
protect, defend, release, and hold the Client Company, its parent, subsidiaries,
affiliates, employees, directors, officers, and agents harmless from and
against any and all liability, expenses (including attorney's fees and court
costs), losses, and claims for damage of any nature whatsoever, whether direct
or indirect, as though expressly set forth and described herein, which the
Client Company may incur, suffer, become liable for or which may be asserted
against the Client Company arising from or in connection with (i) Vincam's
negligent, fraudulent, willful, or reckless performance or nonperformance of
any of its responsibilities or obligations under this Agreement; (ii) any
actions or inactions of any of Vincam's Corporate Employees, Vincam's officers
or directors, as well as agents or independent contractors engaged by Vincam,
including without limitation, negligence, errors or omissions, tortious
conduct, violation of any statute, law, or regulation, criminal or dishonest
activity, while under the supervision, direction, or control of Vincam; (iii)
Vincam's noncompliance with any of the responsibilities enumerated in Vincam's
Services and Responsibilities, Section 5 to the extent that Vincam has
direction and control of such responsibility; (iv) any negligence, tortious
conduct, violation of statute, law, or regulation, criminal or dishonest
activity attributed to Vincam, or (v) any claims based on facts or
circumstances relating to Vincam's activities that occurred or existed prior to
the Effective Date.
9. MISCELLANEOUS PROVISIONS. 9(A) THE PARTIES' AUTHORITY TO EXECUTE
THE AGREEMENT. The parties represent that each is a legal entity authorized to
conduct business in the state where the services of this Agreement will be
performed and that the officers who sign on behalf of the party are duly
authorized to enter into this Agreement.
9(B) THE SCOPE OF THE CLIENT COMPANY'S AUTHORITY. The Client Company
cannot hold itself out as an agent of Vincam, directly or indirectly, and is
not authorized to bind Vincam in any fashion (either through representations or
its actions) unless such act is specifically authorized and ratified by Vincam
in writing.
9(C) ASSIGNMENT; THIRD PARTY RIGHTS. This Agreement is a personal
services contract and is not transferable or assignable by the Client Company
without Vincam's prior written consent. The Client Company cannot assign the
services of a Worksite Employee to anyone without Vincam's prior written
consent except as needed in the normal course of business. Vincam may,
however, assign this Agreement to any of its subsidiaries or affiliates without
the prior written consent of the Client Company. For purposes of this
Agreement, a merger of the Client Company will constitute a transfer which
requires Vincam's prior written consent. This Agreement is for the mutual
benefit of the parties and does not create rights of any kind in a third party.
9(D) INTEGRATION; MODIFICATION; WAIVER. This Agreement constitutes the
entire agreement between the parties regarding this subject matter and
supersedes any other agreement between them, whether oral or written. Any
modification to the Agreement must be in writing and signed by the party
against which enforcement is to be sought. Failure by either party to act
when required or to claim a breach of any provision of this Agreement will not
be construed as a waiver of any subsequent breach.
9(E) MEDIATION AND ARBITRATION. If a dispute arises between the parties
relating to the terms of this Agreement, either party may inform the other by
giving written notice that it desires to have the dispute mediated by a mediator
selected in accordance with the procedures of the Federal Mediation and
Conciliation Service, or by a procedure as agreed by the parties to the
dispute. Once mediation is elected, the parties agree to allow a minimum of
sixty (60) calendar days to resolve the dispute through mediation. Any
mediation hearing shall be conducted in Atlanta, Georgia, or any other location
which is mutually agreed to by the parties in writing. If the dispute is not
resolved through mediation, either party to the dispute may elect to arbitrate
the dispute by serving written notice upon the other within fifteen (15)
calendar days after the mediation. Once arbitration is elected, the dispute
shall be resolved by a committee of arbitrators (one appointed by Vincam, one
appointed by Client Company, and one appointed by the two so appointed). Any
arbitration proceeding conducted shall be conducted in Atlanta, Georgia,
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association and using the Georgia Rules of Civil Procedure and the Georgia
Rules of Evidence.
9(F) REMEDIES NOT EXCLUSIVE; SEVERABILITY. The rights and remedies
provided by this Agreement are not exclusive. Vincam is entitled to any rights
or remedies created by law (whether currently existing or created in the
future) as well as those contained in this Agreement. Institution of an action
to collect payment of an amount in default at law or the obtaining of a
judgment in such action shall not be deemed to be an election of remedies by
Vincam. Such action will not prevent Vincam from pursuing other remedies
available to it at law or in equity. Should any part of this Agreement be held
to be invalid or unenforceable, the balance of this Agreement remains in force
and stands as if the unenforceable part did not exist.
4
9(G) GOVERNING LAW. The Agreement is governed by, and shall be construed
in accordance with, the laws of Georgia, both substantive and remedial, without
reference to the choice of law principles. All suits and special proceedings
arising out of the Agreement must be brought in the courts in and for Xxxxxx
County, Georgia, or the United States District Court for the Northern District
of Georgia unless the parties agree to mediate or arbitrate as provided in
subsection 9(E) above. Each party agrees to the exercise of personal
jurisdiction by any court of competent jurisdiction described in the prior
sentences.
9(H) ATTORNEY'S FEES AND COSTS. In the event of any litigation arising
out of or related to this Agreement, the prevailing party shall be entitled to
an award of attorneys' fees and costs incurred at all trial and appellate
levels. Further, if any payments are not made when due and the payments are
collected by or through an attorney, the Client Company agrees to pay all
expenses and costs of collection, including attorney's fees and court courts.
9(I) ATTACHMENTS; COUNTERPARTS; NOTICE; CAPTIONS. Any attachments
described in this Agreement are specifically incorporated into and made a part
of this Agreement. This Agreement may be executed in two or more counterparts,
each of which will constitute an original but taken together constitutes an
entire agreement. Any notice by this Agreement shall be delivered to Vincam and
to Client Company at the respective address and person designated below. The
captions in this Agreement are provided for convenience only and are not part
of the terms and conditions of this Agreement.
9(J) SURVIVAL. No termination or expiration of this Agreement affects or
impairs the obligations, duties, indemnities, and liabilities of the Client
Company, or the rights of Vincam relating to any unpaid obligations. These
obligations, duties, indemnities, and liabilities shall not terminate or expire,
but rather survive such termination or expiration and continue in full force
and effect until the longer of (i) such time as all the obligations have been
paid in full, or (ii) such time as is expressly provided in this Agreement.
10. TERMINATION. This Agreement has an initial two (2) year term
starting on the Effective Date. During this first year, either party may
terminate the Agreement by giving thirty (30) days' written notice unless
terminated for Cause, as defined below. After the first year, the Agreement
renews automatically on its anniversary date for an additional year's term
unless a party provides the other with written notice of non-renewal not later
than thirty (30) days before the next anniversary date of the Effective Date.
Either party may terminate this Agreement at any time if there is Cause. Cause
includes, but is not limited to, non-payment when due of any amount payable
under this Agreement, a material violation of law, non-performance of any
obligation of this Agreement, breach of a material term of this Agreement, or
the Client Company's filing for relief under the Bankruptcy Code or seeking the
appointment of a receiver or trustee. Upon termination, Vincam shall have all
of the rights and remedies available under applicable law, whether in law or in
equity, including, but not limited to, and without further notice or demand to
the Client Company: (i) all obligations evidenced hereby, together with all
accrued but unpaid charges, shall immediately become due and payable and may be
collected forthwith, regardless of the due date; (ii) to set off and deduct any
amount due under this Agreement from any account or deposit that the Client
Company may have with Vincam or other monies to which Vincam may be entitled
from the Client Company (including pursuant to a draw on a letter of credit);
(iii) to institute legal proceedings against the Client Company, and any other
individual or entity which may be primarily or secondarily liable under this
Agreement, to collect any amounts owed under this Agreement; and (iv) to
declare all other obligations of the Client Company to Vincam to be immediately
due and payable. Interest shall accrue on any outstanding balance of the
obligations due under this Agreement from the date of any default hereunder and
for so long as such default continues at the highest default rate allowable
under applicable law.
10(A) EFFECT OF TERMINATION OF THE AGREEMENT ON THE WORKSITE EMPLOYEES;
THE PARTIES' OBLIGATIONS UPON TERMINATION. Upon termination of the Agreement,
the co-employment arrangement ends. If the termination is for any reason other
than the Client Company's breach, including for non-payment, the Client Company
has the right to offer continued employment to the former Worksite Employees.
If the Client Company rejects any person, Vincam has the right to offer
continued employment and to reassign that individual to another worksite. If
the termination is because the Client Company breached the Agreement, including
for non-payment, Vincam has the first right to offer continued employment and
to reassign the former Worksite Employees. Upon termination of the Agreement,
the Worksite Employees are no longer employees of Vincam unless Vincam has
offered continued employment. Vincam will communicate the change in employment
status to the employees in writing. Vincam will cause the termination of all
policies and/or endorsements covering the Client Company and the Worksite
Employees. At the termination, the Client Company becomes responsible for
payroll, workers' compensation, employee benefits, etc., for the employees. The
Client Company agrees to pay Vincam immediately an amount for any unused,
accrued paid time off (e.g., vacation, sick, personal days) to which any
Worksite Employee is entitled upon the termination of the Agreement. If the
Client Company terminates the Agreement or breaches it, the Client Company is
solely responsible for obtaining replacement health care coverage for the
Worksite Employees. If the Client Company fails to obtain replacement health
insurance (or comparable) coverage for the Worksite Employees, the Client
Company shall immediately pay Vincam a fee of $500 per worker which cannot be
used as an offset against any fee due Vincam or any money due to Worksite
Employees. The Client Company acknowledges that this amount is reasonable to
cover Vincam's expense in extending continued health care coverage to the
Worksite Employees and that this amount is not a penalty. The Client Company
further agrees that the payment of this sum does not constitute an election of
remedies and that Vincam may obtain money damages for a breach of the Agreement
in addition to this amount. Vincam agrees to assist the Client Company during
the transition period by giving the Client Company information regarding
workers' compensation coverage, the health insurance plans and other benefits,
and the carryover balances (such as accrued vacation). Vincam is not obligated
to provide this information if the termination of the Agreement is because the
Client Company failed to pay Vincam.
11. THE LEGAL DEFENSE BENEFIT. Even in the absence of wrongdoing,
employers can be sued. Because of that possibility and Vincam's belief in its
services, Vincam provides the Client Company the legal defense benefit. This
benefit is not insurance; it is not additional indemnification; it is not to be
used as a fund to settle disputes between the Client Company, Vincam, and a
Worksite Employee (former or current). This is a "value-added" benefit for
which the Client Company pays no additional fee. It is Vincam's promise to pay
up to $75,000 in attorney's fees under the circumstances described below.
11(A) CONDITIONS REQUIRED TO OBTAIN THE LEGAL DEFENSE BENEFIT. To obtain
the legal defense benefit, the Client Company must fulfill all of the following
requirements for the particular claim: 1) comply with applicable law, 2)
observe Vincam's procedures for employment practices (both in general and for
that worksite), 3) follow Vincam's recommendation(s) regarding the incident
from which the claim arose, 4) use only Vincam-provided forms, 5) comply with
this Agreement, and 6) permit Vincam to exercise its responsibilities pursuant
to law and this Agreement. To obtain this benefit, the Client Company agrees to
accept Vincam's choice of counsel. If the Client Company prefers to select
its own counsel, it is free to do so. In that event, this benefit is not
available to cover the legal fees associated with that retention. If there is a
conflict between the Client Company and Vincam, this benefit is not available.
11(B) SCOPE OF THE LEGAL DEFENSE BENEFIT. If the Client Company fulfills
the above requirements, Vincam will pay up to $75,000 for attorney's fees to
cover any employment practices claim filed under one of the laws enumerated in
Vincam's Services and Responsibilities, Section 5, between a Worksite Employee
and the Client Company, Vincam, or both while this Agreement is in effect.
Specifically excluded are third party liability claims of any kind, including
but not limited to, those arising from automobile accidents and/or personal
injury litigation. The legal fees for this benefit will be based on the hourly
rate that the law firm selected by Vincam charges Vincam.
12. VINCAM'S SERVICE GUARANTEE. Vincam is confident about the quality of
its services. As a result, we make the following guarantee: if the Client
Company is not satisfied with Vincam's services and the Client Company wishes to
terminate the Agreement within the first six months of the initial Effective
Date, Vincam will refund all fees the Client Company paid Vincam excluding
wages, direct expenses, payroll taxes, employee benefits, workers' compensation
costs and other mandatory insurance (e.g., State Unemployment Insurance). Vincam
will provide, at no cost, assistance to the Client Company so that it may resume
full employer responsibilities. This assistance includes giving the Client
Company information necessary to obtain workers' compensation coverage, health
insurance plans and other benefits, arranging for payroll service, and
furnishing all carryover balances (such as accrued vacation). This benefit is
not available if the Client Company breaches the Agreement, including failure to
pay.
13. EMPLOYMENT PRACTICES LIABILITY (EPL) INSURANCE. Vincam has purchased
an EPL insurance policy with an endorsement that extends coverage to the Client
Company for claims brought by a Workplace Employee against the Client Company
alleging wrongful employment practices, as defined in the policy. The Client
Company's coverage is subject to a $1,000,000 annual aggregate limit, with
deductibles of $75,000 for legal defense costs and $25,000 for payment of
judgments or settlements.
Vincam and the Client Company execute this Agreement, in their respective
corporate names by their duly authorized officers, on the third day of March,
1998.
TOWNE SERVICES, INC. VINCAM HUMAN RESOURCES, INC.
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COMPANY NAME
By: /s/ Xxxxx X. Xxxxxxxx, Xx. By: /s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxx, Xx. Name: Xxxxxxx Xxxxxxxxxx
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Title: Chief Financial Officer Title: Area President
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Street Address: 3295 River Exchange Dr. Street Address:
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Suite 350
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City/State/Zip: Xxxxxxxx, XX 00000 City/State/Zip:
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