your hired help leaves....then what

E

Envious Eric

New member
to those of you who own your own business and hire out help....



do you make your employees sign a NO COMPETE CONTRACT stating they cannot operate their own business in a certain radius from your location?



reason I ask is because I want to teach and develop people to do the work for me in due time, but I dont want to give them all the knowledge and "practice" under my name and have them start up their own business taking away my clients/potential clients
 
yes defenitely!...write up some sort of clause and have them sig it before they do any sort of work...i have seen this happen to a few people in a few different industries...



one thing to help also is have some sort of good pay or incentives for your employess NOT to leave at all....
 
You can have them sign any document you deem necessary prior to hiring them. Cover you butt. People get jealous when they see sucess and wil try to get there the easiest way possible. I know 3 large chemical distributors that have the sales people sign a no-compete clause. Try not to share any trade secrets you develop with your employees either.
 
I would suggest having employees sign a non compete agreement but as I have found out that in court you cannot stop somebody from making a living so the court will throw out your case/lawsuit. This was with a non compete contract that my lawyer made for my business and it just does not work in court so it is basically to scare them from stealing your clients and I knew this going into the courtroom. Keep employees away from any types of client lists and phone numbers is about your only remedy and not fool proof at that.
 
toyotaguy said:
to those of you who own your own business and hire out help....



do you make your employees sign a NO COMPETE CONTRACT stating they cannot operate their own business in a certain radius from your location?



reason I ask is because I want to teach and develop people to do the work for me in due time, but I dont want to give them all the knowledge and "practice" under my name and have them start up their own business taking away my clients/potential clients
Click to expand...



Fwiw. Non-compete agreements are illegal in California. In California, a non-compete agreement is enforceable only if someone sells a business and agrees not to compete with the new owner. That aside, California employers cannot restrict the livelihood of their current or former employees.



As far as other states are concerned. Whether or not a non-compete agreement is a legal and binding contract depends on state or local laws, the scope of the restrictions your employer included, precedents set in court decisions, and a variety of other factors.



A reasonable non compete clause might be enforceable if it restricts you from working for a competitor for six months within say a 25-mile radius, but not beyond that scope or if you can prove it will seriously impact your right to make a living.



Bottom line is you can have someone sign it, but it might not be worth the paper it's written on, if the other person hires a lawyer and fights it out in court.
 
yeah i was thinking of a time frame about 1-2 years or so....not forever!



but they do hold up in court, maybe in some instances not, but they will hold up according to my lawyer/teacher in my law for small business class right now
 
As others have said, non-compete contracts aren't worth the paper they are written on. Your safest bet is not to give them too much info, just have different people do different jobs, don't let them see who your suppliers are, maybe even go so far as to remove labels from your most important products and put your own on them or hand label them.



Basically though, there isn't much you can do except give good customer service and build customer loyalty.
 
Why try to hold someone back? Everyone of you either had some help of som kind or learned by trial/error.



These boards are full of people asking/giving advice,no one seems to have aproblem with that!



Detailing is not rocket science,information is everywhere.



Hire someone, traet them as you want to be treated,and hope to see them the next day.
 
yup...no competes are essentially worthless. the only time you MIGHT have a case is if you could prove that someone left and took existing customers with them...but even then it probably wouldn't be worth the expense of going to court to deal with it.
 
My old Auto Magic rep of many years quite and went to work for another chemical supplier called Sam Brown and got slapped with a non-compete lawsuit. I think it went to mediation and he could'nt work in the sales field for several years. The person claimed that this is the only trade he knows how to do and he still lost! This one stuck. Don't take these non-compete contract light. They are enforceable in some cases.
 
Even if it may not work, absolutely have them sign one. How could it hurt? I'd also have them sign papers saying that they were shown the material data safety sheets for all the chemicals that you use and that they were given the proper gloves, safety glasses, boots, etc. that would protect them. That should cover you fairly well if they leave under bad terms and then want to come after you for something.
 
I would definately advise anyone in our field to have your employees sign a no compete clause. I would also advise against giving them all your tricks. Its sad that we have to carry things in such a manner, but you gotta look out for #1. In my experience customers will leave, reason being, the same way they are used to you and your service, they trust you and your judgement, their used to your service, and your professionalism. Guess what? That ex-employee is part of all that, and in most cases he didn't have to put up any money to gain it. Like you did. Take it from me i had to learn the hard way. I had a manager, and several others come in pick up all types of marketing, and or detailing tips. They cut into all of my distributors and even my contracts(verbal) at the dealerships. I had one guy link up with the bodyshop across the street. I couldn't compete because they were doing body work for the insurance companies, detailing was just extra. They could charge far less than I could. At the same time i had ex-employees cutting prices, doing mobile work for my ex-clients. Some clients would even come and tell me and of course they didn't see anything wrong with it (same service, products, faces) cheaper price. My advice, be very careful of who you let in, and when you let them in have them do your car washes for you. Do the detailing yourself, or maybe go with a couple of family members(that you can half way trust).
 
You can have anyone you want sign a non-compete clause.. However, in Califorina it won't be enforced.



Unlike the situation in other states, non-compete agreements are illegal in California and against public policy unless you're giving away trade secrets. Like KFC's recipe or the Coca-Cola formula or something similar. Waxing techniques would not be considered trade secrets and the court would rule pretty quick in this matter. imo



California law "Section 16600" is quite simple and means what it says: California law voids any provision, contract term or purported "agreement" that prevents someone from working for a competitor or to work for him or herself. In other words, restrictions on an employee's right to work for a competitor or to operate a competing business are illegal and cannot be enforced.



Like ibstoney1, said keep your employees away from clients names and phone numbers. It's a shame people will try and steal your customers. I have a friend who signed a non-compete clause in a dog grooming business. He quit after a two years, ( employer was shafting him with his pay) many of the customers followed him on their own. He was sued anyway, but the case was thrown out of court and they had to pay his court cost and attorney fees.
 
If you have them sign a non-compete contract, then you should have them sign an employee contract, with all terms of employment. Hours, Salary, Job Duties, expectations.



The reason being is if you promise them something, and don't deliver. You are breaching the contract, therefore the non-compete is null and void. It also gives you a way to get rid of someone and still have the opportunity to enforce the non-compete if they fail to do their job duties or live up to your expectations.
 
Non-compete clauses are necessary if reasonable (few years and few miles) and the state in which you are in upholds them in court.



Why should you put your business at risk to someone working for you who not only leaves and opens up shop across the street, but steals your customers (which he thinks are now his).
 
toyotaguy said:
yeah i was thinking of a time frame about 1-2 years or so....not forever!



but they do hold up in court, maybe in some instances not, but they will hold up according to my lawyer/teacher in my law for small business class right now
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You've got some bad information. There is also a bunch of other bad information in this thread. First, noncompetes are unenforceable in California with only a very few exceptions. In other states, it varies from state to state. There are many states where a well written non-compete is enforceable. In the last 5 years, I have beed involved in 4 non-compete suits in 4 different states (I worked for an international company that agresively pursued non-compete agreements) and in three cases, the employer prevailed. The one where the employer lost involved and employee that stayed in the industry, but in a different capacity (moved from a sales to operations position) and the judge ruled this did not violate the non-compete.
 
toyotaguy said:
do you make your employees sign a NO COMPETE CONTRACT stating they cannot operate their own business in a certain radius from your location?
Click to expand...



Think about it. Becoming a successful entrepreneur is not that easy. If it was, everyone would be in their own business. Always remain focused on your own business, not the competition.
 
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