non compete agreement

Apple Roof Cleaning said:
\A Waste of Time IMHO
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I disagree, I think they are good. I can tell you I put alot less guys in business once we started using one. Does it work and will your state uphold them? Likely not...

Good to have an good to use.
 
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You have to ask a labor lawyer in your state. I've seen them busted and I've seen them enforced. The one that was busted cost my friend $25K in legal fees to break it. One of the biggest ways they are broken is if they don't put reasonable terms in it. One of the more common ways employers protect themselves is protecting "trade secrets". Or protecting customer lists. Those are easier to enforce.

If they are enforceable or not is usually not an issue. Many times the ex-employee is intimidated into thinking it's valid when it may not be.

Kind of like the stickers on the back of dump trucks that say "Not responsible for broken windshields".
 
I do not have one bit I think it is a good idea, it would not hurt to try to protect yourself and your company, just might cost some money to have one made.
 
Ron Musgraves said:
I disagree, I think they are good. I can tell you I put alot less guys in business once we started using one. Does it work and will your state uphold them? Likely not...

Good to have a good to use.
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Yeah, I meant enforcing it is a waste of time.
You CAN use one to "psych out" your employees, make them THINK before they compete against you.
 
Christopher said:
I do not have one bit I think it is a good idea, it would not hurt to try to protect yourself and your company, just might cost some money to have one made.
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Like anything now you can find on via internet or get a paralegal to modify one for you for 50 tp 100 bucks.

I got a few from freinds read them and talked to my attourney. She corrected the one I wrote and billed me for 150.00

Remember a non-compete is different from a non-discloser.
 
Thanks for the info Ron.
 
Apple Roof Cleaning said:
Yeah, I meant enforcing it is a waste of time.
You CAN use one to "psych out" your employees, make them THINK before they compete against you.
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PArtly true Chris, its very difficult in todays world to hold one up.

Dont confuse this with a non-dsicloser. judges will protect your current customers and secrets.( if you have any) if a employee walks with your customer list and steals them with in minutes of leaving? you will have a case....most good customer wont touch this with a ten foot pole.
 
In the case of my friend his agreement was 25 years old, signed in another state, and incredibly restrictive. It said not only could you not compete but you couldn't be employed in the same industry for 10 years etc. It was nuts. But he signed it when he was 23. The company had been sold 2-3 times and it was then owned by a big corporation. Everyone knew it would not be enforced but they threw money at it for 2 years trying to make my friend give up. He didn't and still has a thriving manufacturing business. It still cost him the $25K.

So I guess the questions is are they enforceable? Sometimes.

Will they be? Not likely unless somebody just wants the guy to spend money.

A system designed by lawyers for lawyers.
 
That is very true, most court dealings.....the lawyers are usually the ones that win because no matter what they are getting paid.
 
You might think this is funny, but when I first started doing the filters I even had two of my vendors sign non-competes before my first order. I had a new idea that I had to explain to them and I didn't want them running with it. I had an ultrasonic company help me design a task specific ultrasonic machine and they had to sign it too.
I used to sell franchises (another type of business) and we had lots of people come to stake our business out and then go try to open their own. If we told anyone anything they had to sign a non-compete.
Did it work?
Yes, but only because it discouraged the competition, not because we could enforce it. It just costs too much money to enforce it.
 
For employee heads and owners at sale non competes are great and are usually part of a buisness sale or a contract to work for a company and kicks in upon seperation from the company.
I have a friend who owned a large trash service and as part of the non compete he was paid for 5 years to not show up to work when the company was sold to a bigger company.
As far as employees they are pretty much up to the state you live in. If you are using industry specific methods of your former compnay or client info you can be in for alot of problems. If you are doing the same work with new customers unless you are specificly forbidden in the non compete you are safe.
 
Unless there is a fair compensation for the Non Compete, it is totally unenforceable. I am surprised someone had to pay $25k to fight one.
The example of the guy that was working at the waste company is a great one. That is how they should work. You cannot go to work in our industry and we will pay you a reasonable amount to make sure that you do not.
 
Carey, do you have any close-up pictures of the truck in your signature?

I would like to see the pics if you have them, that truck is interesting.
 
A non-compete for an employee vs a person that sells a business is a whole different issue. I thought the original question was about employees. Compensation for a non-compete in a business sale is usually part of of the purchase. Even it has to be fair. Case law in each state is what will determine what has been shown to be fair.

My friend was a terminated employee that started a business similar to his former employers. It was really a case of a big corp vs a small business. He was in business 2-3 years before they went after him so he had a lot of capital invested. It actual went to trial in NC which if any of you have never done is very costly. Many business owners are surprised when they have a legal issue that after years of BS they get a surprise. If and when a small business actually goes to trial over the small claims limit most of your lawyers will refer you to a "Trial Lawyer". Then it starts over and the legal fees really jump.
 
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