NON-compete agreements

[Jimmy L]

Are they enforceable or just a scare tactic?

Employee signs one and then quits to go out on his own.
As long as he doesn't STEAL your customers can he legally run his own CC business?

 

[RichardnTn]

Jimmy.... I just dealt with a situation here in Tennessee where the Non-Compete was legal and enforceable. Contract was drawn up by a lawyer and witnessed.... may vary from state to state....Richard R

 

[Jimmy L]

I heard that they cannot deny you making a living if its in your trade.

Carpenter quits and then works on his own?

 

[Shawn Forsythe]

You asking us for legal advice, Jimmy?

I think Richard is right. The enforceability varies by jurisdiction, and the manner in which it is written.

Don't you have some kind of attorney radio call in show you can ask?

 

[Ken Snow]

Michigan is a right to work state so does not look favorably on them. If you pay them well and treat them right they wont leave anyway.

 

[Guest]

Did you teach them? or did they get their experience before hand? If they had experience before don't waste your money on lawyer fees you will loose. have a sit down and tell them lets have a working relationship but don't visit your customers !!!

 

[Driguy]

i hear about these all the time.

If you read the E Myth Revisited, it talks about technicians who get fed up and get the urge to start their own business. With out being to involved, i will say that unless he knows how to RUN a business, you shouldn't worry about an employee quiting and starting their own.

But if the kid has his stuff straight and wants to move into his own business so he can grow something for his future, and his families future, why hold that against him? Now if he stole something, or threatened to take your customers. that's a different story

 

[Rex Tyus]

Ever notice how Law Firms and accounting firms keep adding names?

 

[Rob Lyon]

Terry,Good link, They are not even worth the paper their written on.

 

[diamond brian]

In Oklahoma, our Supreme Court has rendered the non-compete and any permutation thereof, completely unenforceable.

 

[Mikey P]

Whew!

 

[Steve Toburen]

As a bunch of rug-suckers we can conjecture and speculate all day long till the cows come home. (And to a certain degree a national discussion is irrelevant since each state has different laws- witness Oklahoma above!)

However, you can find one of the better discussions on the entire non-compete issue that I have read lately (and it is written for our industry) at http://www.randrmagonline.com/CDA/Artic ... 0000155834 This article is written by a real honest-to-goodness attorney and reads like it too. Yawn! But hey, the law is a dull subject. Check out the article if you are serious about learning what you can and can't do.

This piece is from Evan's new "Restoration and Remediation" magazine. Say what you will about ICS, if you are doing any amount of water or fire damage you should subscribe to R& R and even better, it is free. www.randrmagonline.com (Full disclosure: I have written a couple of articles for the mag but have no financial stake in it.)

There is a pretty good article in the Fall R & R issue by Ken Tucker on leadership called "Building Sand Castles that Endure" and an even better on restoration estimating by a fellow named Martin Woods. (OK, there is also a decent piece on the Emotional Dynamics of a restoration loss by some old ex-has-been rugsucker too.)

Steve Toburen CR
Director of Training and non-attorney
Jon-Don's Strategies for Success

PS As usual, Ken Snow hit it pretty well. Treat them right and pay them well and you don't need a (usually unenforceable) non-compete. However, I would add a "fall-back defense" to Ken's strategy. (Because remember sometimes people do suffer what Michael Gerber calls an "entrepreneurial seizure". No matter how good you are to them they want to have their own business!)

At SFS we suggest dealing with this "employee going into his or her own business scenario" in two ways. First, in my company we totally and completely dominated our local market. If you have your act together as a business so well locally the very best "non-compete" you will have is when a departing employee thinks, "I would be nuts to try to compete with these guys. I think I will move to where the pastures are greener to open my business." And in sixteen years I had several employees who went off on their own. But not ONE opened a company within 200 miles of me. (The shotgun helped too.)

However, another tactic our SFS members sometimes use is called "open mentor communication". That's right, bring the matter up at hiring. Explain that IF and when they do want to try going out on their own you will help them as long as they respect your current customers AND market position.

So for example if an employee wants to open his own business you offer to even let them take your excess work and/or jobs you don't want IF they focus on a different market. As someone (maybe Nick Paolella) elegantly put it, "I would rather have them inside the tent with me peeing out instead of outside the tent peeing into it!" There IS enough business to go around for everyone IF we use the Rodney King strategy, "Why can't we all just get along?"

 

[Kevin B]

PS As usual, Ken Snow hit it pretty well. Treat them right and pay them well and you don't need a (usually unenforceable) non-compete. However, I would add a "fall-back defense" to Ken's strategy. (Because remember sometimes people do suffer what Michael Gerber calls an "entrepreneurial seizure". No matter how good you are to them they want to have their own business!)

At SFS we suggest dealing with this "employee going into his or her own business scenario" in two ways. First, in my company we totally and completely dominated our local market. If you have your act together as a business so well locally the very best "non-compete" you will have is when a departing employee thinks, "I would be nuts to try to compete with these guys. I think I will move to where the pastures are greener to open my business." And in sixteen years I had several employees who went off on their own. But not ONE opened a company within 200 miles of me. (The shotgun helped too.)

This described what I did. The company I worked for, was larger than all the other companies combined. I would have been foolish to try and compete consistantly with them.

 

[Guest]

Your customers are anybodys customers..

 

[B&BGaryC]

Here in Montana they are all included in employment contracts, and not enforceable at all whatsoever. Montana is a "Right to work" state.