Non-compete Agreement

[gkm09]

Has anyone dealt with a non-compete agreement? I'm currently the lead guy in the shop and they want to have me sign a NCA. I'm fine with it but want to be compensated for the time I can't compete. I have friends who have done this. Any suggestions?

[kodydog]

Two years ago I worked for a company who did custom bus renovations. After working there 3 weeks they took everybody into the conference room and presented a 10 page disclosure contract. It had things in it like if my vehicle gets ruined while in their parking lot from neglect on their part I could not sue them.

It also had a non-compete agreement that I refused to sign. The wording was way to vague and I wrote a little note saying so. I wrote, I have been an upholsterer most of my life, long before I started working here. I will run my business and  upholster in the privacy of my own shop while employed here. And will continue to upholster after I leave your employment. I then wrote, I do not intend to get into the bus conversion business but if a customer hires me to upholsterer the seats in their coach I will take the job.

When I handed it to my supervisor I expected a conflict but he just shrugged and said fine.

My thoughts about a non-compete agreement is they are for upper management or a CEO of a corporation. The guys making the big bucks. If a shop owner feels he needs to have all his employees sign a non-compete disclosure so he will never have the competition it sounds like he may be a bit insecure.

One last thought, and I do not know your situation. If this shop owner is taking you under his wing and teaching you a new trade you should feel obligated to hang around a while so he can recoup his expense of training you. Maybe in this case a non-compete agreement is in order. Another thought is if this shop owner is helping you and your family move to a new location you may feel obligated to sign the agreement.

[sofadoc]

I'm a little confused.

I've heard of NCA's that would prohibit you from quitting and opening your own shop within the same market for a designated period of time.

But are you talking about an NCA that would prohibit you from working on jobs at home in your spare time?

We used to have a guy working for us. He would listen intently while we made a deal with a customer. Then he would call them at home that night and offer to do the job a lot cheaper.

I understand why an owner might want you to sign an NCA to prevent you from stealing customers, or taking the training he gives you and opening a competing shop down the street.

But I think you have to draw the line somewhere. If your boss doesn't want you earning extra cash in your spare time, he should pay so well that you really have no incentive to moonlight. And we all know that probably isn't going to happen.                                           

[brmax]

I agree with; many times these papers are for a good reason. Let me first say its not always a craft or trade that these formal papers are promoted. As you already have figured simple retail all through an extreme name brand recognition product and or service is in conversation here.

This thinking from me is also mentioned for "both" parties concerned in the agreement. Here is a small example: I had Jerry repair this, last week, did a great job. You should look him up! Time might be a factor as he works daily at " such n such " ( a recognized quality, long established Co. ). 
Here is some of the issue, obviously a tallented prospect because His employer is long recognized as having good quality. 
Here is another aspect and dont think for a second it doesnt happen. The same Jerry does this work on the side and is quietly penalized by getting some low paying piece jobs ( during the day ). Not his normal senior/lead/even not senior quality jobs.
We have to remember some jobs are infact or can be single shop accomplished. Then again they are in a shop of 30 the very same stations. In this environment special tools can be used so eliminating and or equalizing a task for accomplishment or learning!

Good day
Floyd


ps: selling a business and agreeing to not ever to open a business on same road facing the road.
Result: open business on same road " not facing road" 🧐

[kodydog]

But are you talking about an NCA that would prohibit you from working on jobs at home in your spare time?                                     

In my case the contract was so vague it could have meant anything.

If it had been more specific, for instance, I could not open a bus conversion company in the same industrial complex I would have gladly signed it. It pretty much said I could not preform the same tasks for another company or for myself within a 150 mile radius.

[gkm09]

I have been doing upholstery quite a while. I am giving him a few years to train a replacement. But i want to do more custom cars and currently doing mostly furniture. I can make a lot of money where I am doing it by myself. Though he pays me very very well.

[brmax]

In your present position, who might be training a new person. This new employee or another to gradualy fill your position when you take another path. 
I ask because training or mentoring in anyway has its benefits and bumps. The position many times is not thought about, as the very same person later thinks and hopefully values the experience. This I believe is one of lifes automatic benefits to all.


Good day

Floyd

[kodydog]

I have been doing upholstery quite a while. I am giving him a few years to train a replacement. But i want to do more custom cars and currently doing mostly furniture. I can make a lot of money where I am doing it by myself. Though he pays me very very well.

So why does he feel the need for the non-compete agreement? Sounds like you are doing him a favor. A big favor. A few years is a long time.

[MinUph]

Yes a few years notice is way beyond fair on your part. What is he offering in return for the NCA? There has to be something for you in there. Or don't sign it. What can or will he do if you don't? Sounds like you can move on anyway. From an employers view if I wanted to have an employee sign one I would expect there was something for them in it. Like the job, compensation, something. And this would probably be at the hiring point not the leaving time.

[Mojo]

We make all new employees sign a non compete clause. If they don't, they wont be hired. Period. I am not going to spend my time teaching you new ways to make awnings not to mention show you some of our trade secrets just so you can go into business on your own and compete against me.

This happened to us 2 years ago. I spent a year teaching her the business, how to run a business, how to sew, our trade secrets on how we make awnings ( yes we have a certain technique that no one else uses to give a better fit ). She walked out the door, took our procedures manual, our technique book, our marketing plans manual, supplier contact info and then went to work for our competitor.

I made sure that she along with our competitor knew I would sue them into the stone age if they started using any of the stuff she stole from us ( and yes I call it stealing ). They contacted all of our suppliers and everyone told them to go pound sand and refused to sell to them. I also made sure a few key customers knew what happened and they spread the word through the RV community. It killed the competitors business and they had to shut down their sewing operation and stick with parts.

Non compete clauses can be difficult to enforce in some States. Florida is real tough on these clauses and makes it easy for an employer to sue the hell out of an employee. For the most part non compete clauses can be very difficult to enforce in regards to trade people. If you are an HVAC tech, Electrician, plumber or upholsterer it is considered a skill and trade and no judge or jury will back a former employer and force a trades person out of their profession.

Where employees run into trouble is when they take certain procedures and techniques with them to a new business or competitor or worse yet STEAL a customers list, marketing plans, files, business operations procedures, etc. etc.. That is when they become easy targets to get the hell sued out of them and get shut down. I might add that case law is loaded with judgement's against a new employer who hired a former employee of a competitor and copied styles, techniques or used operating procedures from the former employer. 

A non compete clause is to keep a dishonest employee from taking trade secrets, customer lists, files, procedures, etc. to a new employer or worse yet to start their own business. All trade's people are looked upon by courts as being free to ply their trade. You just have to do it in an ethical and honest way by not screwing your former employer.

I gave our former employee a free pass and didn't sue her. But I will never do that again. If an employee pulls that crap again on us I will spend everything I have to bankrupt them. Sound harsh ? You bet. But then I hate dishonest and unethical people. To put it bluntly, if I seen a dishonest person standing on the corner with their brains on fire, I wouldn't piss in their ear to put the fire out.

Sorry but this subject jacked my blood pressure up. Trust me if any of you were in my shoes and this witch pulled this crap on you then you would be livid too. I have over a decade of hard work, blood, sweat and tears into developing this company and I will be damned if I will allow a former employee to run off and make money using business models that I developed.

Mojo

[SteveA]

Ethical + Honest is what we should expect but people will let you down  - litigation is expensive and maybe their assets are protected but I still enjoy reading your words when your blood pressure is up. 
Years ago there was a guy in NYC who did leather tooling - he was the best and many of the refinishers subbed out to him.  When he was ready to retire a lady asked to buy the business and she would work hand in hand at his side for 6 months before taking over.  No need to finish the story. 
About a year later I ran into him - then fully retired; and I inquired about taking a few lessons which I paid handsomely for.  Enough knowledge to get me by but for 6 months free learning that was criminal by her.  He was too upset to go after her  - she has a great business today - much larger than the old timer ever had.
SA

[Mojo]

I would be a millionaire today if I had tossed out my ethics and morals and chased a few business deals and screwed a few people along the way. I had many opportunities. But I have to wake up and like myself each day and my Dad and Godfather raised me differently.

It seems every year that goes by people have less ethics and morals and will slit your throat to make a dollar. I have met some very honest business people in the past that always did right by their customers, employees, suppliers, etc. And I have met some ruthless bastards that would sell their mothers soul to get ahead or make a dollar.

We have 2 employees now. 1 is 55 and the other is 65. They are old school, respectful, honest and loyal. They do not carry their cellphones with them in the shop, stay focused on their work and do not need to be babysitted. Old people rock......Millennials suck and if we hire again it will be older people. In regards to the millennial that royally screwed us, that was all my fault. I should have never trusted her or advanced her career so soon. My Bad. :(

Trust me when I say I learned my lesson.

Mojo