A Few Red Flags Indicating That Something Is Wrong with a Translation Agency Contract

Contracts between a corporation and a subcontracting company hired by the corporation are usually very one-sided and sometimes downright nasty to the party subcontracted to supply goods or services. This is indicated already by the prefix “sub” in English, German, Russian, and Czech, “pod” [meaning “under”] in Polish, or [shita, under] in Japanese. The prefix clearly shows who is the on top and who is way down below.

I have translated many contracts of this type from several languages, including Japanese, German, French, Czech and Russian. Certain things tend to be emphasized in these contracts more in some languages, while they may be only glossed over in other languages.

For example, Japanese contracts always strongly emphasize penalties, including the contract’s cancellation in the event of a single missed deadline, while the only excusable reason for such a major sin on the part of the subcontractor is usually what is referred to as force majeure, which in French literally means “greater force”, such as an earthquake, hurricane, flood, or armed insurrection or war.

(Personally, I think that “No Wi-Fi” should be added to the force majeure clause for contracts with translators as a legitimate excuse for non-performance of services.)

I remember that the last contract that I translated from Russian had a lengthy clause dealing with harsh penalties for subcontractors who send to the work site inebriated operators. I don’t remember a clause about alcohol or drunk subcontractors in any contract that I translated from any other language.

But one-sided as these contracts that I am translating may be, none of them approaches the nastiness and scope of illegality sometimes found in a number of contracts that translation agencies ask translators to sign.

The first indication that something is wrong with a translation agency that wants to hire you for a project is when you are asked to sign a contract before the agency even has a project for you. It has happened to me many times, most recently three days ago. Why do they ask translators to sign a contract if they have not even sent them any work yet? They usually say that they can’t show us the document until we have signed their non-disclosure agreement. OK, maybe that’s true, maybe not. But if it is true, then the agency should be obligated to send the work to the translator once a rate or a fee that is acceptable to both parties has been agreed upon.

But that is not how it works. What actually happens is that the agency asks a translator, or several translators as the case may be, to sign an agreement when the project is still at the bidding stage and the agency does not have it yet, and may not even have it in the end, or when the agency is contacting several translators, asking all of them to sign a contract, so that the translation will go to the lowest priced warm body available at the moment.

That is why I never agree to sign anything until the agency says that the job is mine if I sign a contract that I can sign in good conscience on the dotted line.

Once a confidentiality agreement is received, there are several possible strategies for dealing with it.

Some of these agreements are so nasty and tell so much about what kind of agency it is that the best way to deal with it is to refuse to sign it. Sure, I will lose a potential project, but I will avoid major headaches that I would have to deal with had I signed a demeaning contract that sometimes contains illegal clauses. Instead of simply refusing to sign a contract, it may be better to counter by offering to sign a Translation Services Agreement prepared by the American Translators Association for its members. If the agency is an ATA member (and they all are, and eagerly advertise on their website that they belong to this august organization), why would the agency refuse to sign a standard ATA agreement?

Abusive clauses that some translation agencies use, especially mega-agencies, include also the following outrageous demands:

1. A clause specifying that any and all intellectual property created during the translation process shall belong to the agency. Since the agency is acting only as a broker, intellectual property created during the translation process may belong to the translator, or to the end client, should the end client request it as the party that ordered the translation and pays for it. That makes sense to me.

But why should it belong to an intermediary, a broker who did not create any intellectual property and only acts as a go-between? If there is legislation allowing that, this legislation needs to be changed. But of course, if translators sign such a clause, they lose all rights to the intellectual property created by their own work, which shall henceforth belong to the middleman forever and ever, Amen.

And it is not even clear what such a clause actually means. Does it mean for example that a list of terms that the translator created while working on a patent project does not belong to the translator but to the broker? I think it does. But then it would also mean that the translator could not use the same list of technical terms that may be stored on his computer on another project for another agency or direct customer without risking a lawsuit, would it not?

2. A clause specifying that a translation agency has the right to raid the house of a freelance translator without prior notice, ostensibly “to verify that virus protection software has been installed correctly”, or under another ridiculous pretext. I doubt that employees who are paid twice a month and whose taxes are paid by their employer would allow their employer to spy on them in this manner. And these are workers who as employees are guaranteed a certain amount of income while they work for the employer. To infringe upon the personal freedom of “freelance translators” who are not promised, let alone guaranteed, any income by the agency in such a disgusting manner is in my opinion very disturbing and clearly unconstitutional. The police need a warrant to enter our houses, but translation agencies do not?

3. A clause specifying that a translation agency has the right to spy on a translator by having access to his or her computer, usually again based on some variation of the weird claim that the agency needs to ascertain something about software that has been installed correctly, etc.

Should another party have remote access to your computer, and should this party happen to be a translation agency, such a party would have a list of who your customers are, both direct customers and translation agencies who send you work, and it would know exactly how much you charge them for projects that you are working on and what these projects are. Such a quasi-omnipotent agency would also be able to see for instance which websites you visit on the internet, which blogs you read and it could also read the correspondence in your e-mail.

Granting this kind of extraordinary, illegal power to a translation agency would compromise your relationships with all of your other customers, both direct clients and agencies. Should they somehow find out about it, they would naturally stop working with you because signing such an agreement with one agency would mean a breach of any other confidentiality contract with any other client. Not even employees may be asked to grant such permission to their employers to be spied on in their own houses. Something like that would be clearly illegal in most jurisdictions on this planet, with the possible exception of North Korea, as I wrote in another post on this blog.

The fact that translation agencies dare to put something like this in a contract with persons who are at the same time called “independent contractors” in what is referred to as a “Non-Disclosure Agreement”, (albeit with non-disclosure going only in one direction, while everything about the translators would have to be disclosed), tells us a lot about the low moral standards to which “the translation industry” has sunk in recent years.

I do believe that something as vile as this particular clause would be simply unimaginable a decade or two decades ago when most translation agencies were simply businesses trying to make money by delivering service in the market for translation through honest cooperation with translators.

4. A clause stating that should the translation agency sue the translator (who is an independent contractor), this independent contractor will be liable for the agency’s “reasonable attorney’s fees”. This clause is designed to muzzle the translator and make him agree to anything the agency wants, no matter how illegal it may be, out of fear of being sued, if the agency has nothing to lose by suing for any reason whatsoever when its legal costs are paid by the translator.

Since these contracts are only proposals, translators are of course free to offer their own contract instead, such as the standard contract proposed for its members by the American Translators Association, or to modify the terms of the contract and cross out the most offensive clauses.

Personally, I think that a translation agency that puts all or some of the clauses listed above in what it purports is a “Confidentiality Agreement”, or “Non-Disclosure Agreement” (often abbreviated as NDA) is not a client that is worth having, especially since agreements of this kind are usually also connected with very low rates paid to translators and combined with short deadlines and a long waiting time during which translators are forced to wait for payment.

One thing the lawyers who draft similar contracts for translation agencies don’t seem to care about is that when the contracts give translation agencies so much control over translators who are officially classified as “independent contractors”, these translators may no longer be considered “independent contractors” under law. How can they possibly be called “independent contractors” when that they are forced to assign all intellectual property created by these “independent contractors” to the agency, when they agree to have their house raided by the agency without a prior warning, as well as agreeing to being spied on by the agency through their own computers and to pay the agency’s “reasonable attorney’s fees” should the agency decide in its wisdom to sue them for some reason.

Insertion of these clauses into a contract means that the translators who sign such contracts no longer belong to the category of “independent contractors” as defined by law in the United States and various EU countries.

Since translation agencies, (or Language Service Providers, if you will), pushing such contracts have so much control over translators, these translators can be reclassified by tax authorities as employees, which would make their employers liable for half of social security taxes and other taxes applicable in the United States and EU countries.

Translation agencies who push the clauses listed above on translators, who are officially “independent contractors” while being treated more as indentured servants than independent contractors, thus expose themselves as well as their translators to time-consuming audits for tax evasion and costly appeals based on the “Non-Disclosure Agreement” alone, simply because businesses using such contracts would exercise more control over their translators than employers have over their own company employees.