I signed a non-compete with another company when I started working there. Hell, I never thought I would end up doing this myself so I didn’t even think about it at the time. It’s for a year and basically states to keep out of the city offering window cleaning and whatever other like services. So, I’ve been honoring it keeping to areas where this company did not market. I’ve got enough business right now and I’m fine with keeping my nose out of the city proper for the duration. But my question, or questions are this:
Is a non-compete worth it’s weight in paper?? Does it depend how it’s written?? I’ve been told by some business people that a non-compete couldn’t even be enforced unless the person agreeing to the non-compete was given compensation for signing. I don’t know, … . that’s why I’m asking.
But the other, perhaps more important question, is “How do you protect your business from a potential employee who might quit and seek out your accounts?” Is this something to worry about?? I imagine some business owners wouldn’t care who is cleaning the windows so long as they are clean and cheaper than the last guy. So, I know we live in a free market, but I also want to protect myself from this scenario if possible when I consider hiring employees. Any wisdom?
Well the first step is to take care of your employees. If they’re good workers, pay them and treat them well. This is your best defense.
Secondly, try not to brag about how much you’re making vs them…and have them help out in the office on occasion so they get a taste of just how much you really have to do in a given day. It’s not just sitting at a desk watching netflix while profit rolls in…far from it.
Third, have your employees sign a non compete and be very clear what it states and what they’re agreeing to. After they sign it, don’t bring it up again. Never mention how strong you feel it is or isn’t. Regardless of how much weight it actually carries, this is just one more mental block to them going their own way.
I have no legal expertise on the actual document, it’s something I’ve been looking into lately though and I’ll keep you posted after I speak to an attorney. At the end of the day, those with the intelligence and will are going to do what they’re going to do. I too left another company here in town to go my own way.
At any rate, having employees is well worth any subsequent headaches…extra insurance, workers comp, worries of competition, training etc
A non-compete is COMPLETE doo-doo. It aint worth the paper its printed on. I DO use them though…enforcing it is another story. One man posted here that if you treat your people right, its probably not gonna happen, I agree with this. Treating your people with dignity and respect, and paying them well…creates loyalty. Even if they leave.
How is a peice of paper saying I will not create a business in the same city gonna stop me? It wont. The last person I worked for, she was HORRIBLE to work for. She payed me well, but that dignity and respect- she never gave it to me. I went out on my own, and she accused me of taking her accounts (which I did not) and actually had a lawyer send a cease and desist letter.
I took a video of me burning that letter and laughing. There is not one single thing that anyone can do to stop you from working or creating a business. There is not a judge who will take a case like that for a micro-business that makes peanuts compared to huge corporations…and even in those cases- this country that we live in touts freedom, and making money is one of those freedoms.
Create a system that your people can follow. Train them well for their positions, and only those positions. If you create a well oiled machine, your mind will be on other things and you will be moving forward in a way that your former employees will never be able to be ahead of you in the game. If they want to be their own boss, let em. There are plenty of windows to clean. If they want to come back and not have to spend every waking hour on running a business, let em.
I never really entertained hiring employees. I was expecting this to be really far down the road if at all. My intent was to be a one man show, max out, and ride it. But then I got really busy, … probably sounds familiar to some of you.
Paul- are you saying that a non-compete is unneccesary??
It seems from the other posts that they use one knowing full well that it isn’t going to really do them any good if push comes to shove. Perhaps it serves as an obligatory but unenforceable formality that gets the point across that my business and my accounts are pretty important.
Depending on the laws of the State where you live, Non-competes aren’t worth much. About the only thing they will do for you in Florida, is stop an employee or ex-employee from soliciting [B]your[/B] customers.
Even if those employees or ex-employees do that, what exactly are you going to do? By the time you find out about it (if you do at all) its already 6 months or a year later…are you really going to go to a lawyer and pay to file a cease and desist, and take them to court over a couple hundred bucks? In most cases, the way they get your client to bite is by giving them a lower price right? IF the client go’s with your employee, then you either have not created a loyal client for one reason or the other and something needs to be done about your customer satisfaction, or your client is only worried about price. If its the latter, you don’t want them anyway.
Same thing applies. If you create a tightly ran ship, it won’t matter. If your employee is doing this while he is working for you, his disloyalty and dishonesty will show in other areas of his routine while he works for you. If you run a tight ship, you will end up letting him/her go before any real damage can be done.
It depends on the individual you are talking about. If he is clever enough, he might make friends with your
customers while planning his moves. He might also cause you to think things are ok.
I speak to every customer that calls off to find out why they are leaving. I keep meticulous records. There is no way I would lose a customer and not know about it for months. I have enough rapport with my customers, they will tell me why they are leaving…it is a very rare occasion. I am in contact with every customer we have several times per year at a minimum.
And yes, If you leave my employ and try to steal my customers, I will come after you. Every one of my staff are contract employees. If you work with us, you sign a contract. Our contract covers non-compete as it affects our customers. It also covers dress code and behavior among other items. You must fully negotiate and agree to a contract with our company or there is no offer of employment.
Because you would be a contract employee, you would be facing a breach of contract action, and yes I would and have filed them. I have very high standards and a waiting list of people who want to work for our company if they can get the opportunity. I am very, very old school when it comes to customer service and relations. Phone calls from customers for complaints or call backs will get you bounced quickly, they are unacceptable
Keep in mind - if you are an employee who signs a non-compete, leaves your employer and becomes his competition - and that employer wants to go after you (legally) they can - anybody can sue anybody.
The thing is that it will cost both sides financially - typically the former employer will have more financial resources. Whether the employer is right or wrong the financial expense could force termination of the former employee’s new company.
I know a guy who was in a similar situation - was threatened by a non-compete law suit of the former employer, his legal counsel said they could most likely beat the suit, but it would cost $10-15K - they ended up settling for $5K - maybe not ethical, but a better business/financial decision.
Thats true Chris,
but please remember that you do NOT have to have a lawyer…you can represent yourself PRO-PER. You DO NOT need a lawyer. The reason why people get one is because they are scared of loosing everything they have worked so hard for, right? So naturally the first thing most people do is panik. OH NO, WHAT AM I GONNA DO, WHAT IF I LOOSE???
Sure, if you have to go to court and you are sued, you have to pay the court fees, but really it is not that much at all. Continuance is a word you need to memorize…not only does it work with parking tickets and traffic violations but its a great buffer for all else that is court related my friend. I have beaten 5 tickets over the last 2 years…well 4, the 5th I kinda lost, had to pay half of the fine for talking on the cell phone while driving.
Many people think that since they do not know for sure, that by having a lawyer that somehow this lawyer has the secret answer for their problems when all they are doing is the same exact thing you would be doing yourself, presenting the facts of the case. You do not have to have a law degree to tell the judge you are in the right or wrong, and I will go to court every time if I ever get sued.
You said you know a guy that settled out of court and gave up 5k? Wow. I feel for the guy.
If I were in those shoes I would not even call a lawyer. They always say the same thing…this way you retain them. The guy with the bigger wallet will win if he scares you enough. In my opinion which may not mean much, if it were me…
I would not even lose one wink of sleep over it, and continue on as usual until the court date. The judge is gonna throw it out of court anyway. There is no way he will even hear that case- its a frivolous lawsuit…if the judge DID take the case, and I lost…so what? So what exactly are the damages? How does the plantiff calculate the damages that he is suing for? I have read cases about brokers leaving their firms and getting sued, I read a case where Nike sued an employee for working for a “competitor” because she was a senior researcher for them. In the Nike case, the U.S. District Court of Georgia ruled that because of her position in Nike, that she could not work for one full year for the competitor, but that Nike had to pay for that full year of her being out of work.
In the case of the broker, the judge threw the case out because the plantiff could not prove that the broker solicited the clients.
It all boils down to the individual case, but really…with our industry (which makes peanuts compared to these guys) what is the amount of monetary damages? I bet it is much less than what would be payed to a lawyer. It only costs a couple hundred bucks to have a lawyer file and send a cease and desist and file for a lawsuit. Thats it.
So the scared guy who receives that paper quivers in his boots and forks out 5 gees? Not a chance. Bring it.
If the employeer trained you you can have an issue. If you never cleaned a window or even knew anything about the business and all or most of your knoweldge came from his/her business. You can have a problem. Non-competes are able to hold up in court, if you think they are not then ask John Gosselin from john and kate plus 8. He tried a few months back to get into the entertainment industry but can not legally. Why? Cause 1) he has/had another skill before he was on TV. 2) he signed a contract that he is not allowed to.
If he did go on another show it would conflict/compete with the current show.
Also large companys use them and they are enforceable. Problem is mom and pop shops don’t have 7 figure laywers to write up the contracts. In most states you can not stop someone from making a living. But if they sign a contract and you trained them and they jump ship, you have every right to sue them and in most courts will win. If the company is stating you can work in the industry they trained you in. But just not in a certain area because it’s where their business is and you go ahead and work in that area. You have an issue. They are not stopping you from working. Heck they can make a radius of 30 miles and if you have a car/truck you can drive that. They can say x amount distance from their business or your home or both, if your home is in their market area. They are enforceable. The company may lose the case in their state but if they lose enough $$ or can proove you opening a shop down the street from them after signing a contract caused them serious financial issues you can expect them to try and take you to a federal or higher state court.
Do you have a non-compete clause in your business? I always wondered if it was really necessary. Who would of thought with window cleaning that you need so much legal mumbo jumbo… non compete clause, scratch glass waivers, pre existing conditions waiver, chemical release waivers. Geez, you almost have to be like a philadelphia lawyer to protect your company!
No I don’t for me I personally believe you can’t really stop someone from working. If they are going to go on their own it’s only a matter of time regardless of a contract. I like to think my work speaks for itself and that there is so much stuff beind the scenes that goes on, most will fold up shop after the 1st year. Even if they don’t I have a few years of a customer list and bank account to compete with them. Also I would not shut them out or try and sue them, but make or keep friends with them. It’s better and cheaper to keep them friends then to fight a war over something you both cannot control. But I also believe if you treat your employees really well, you should not have the issue as much. It can still happen but I think not as much. Then there are those who will always want to be on their own and you should be able to spot them pretty fast as they have an alpha personality.
