Anyone use them? Thoughts?
Anyone use them? Thoughts?
funny you should ask this now... details in PM..... in general I do agree with the CONCEPT....
anyone bidding against me is pretty much a non-compete:D
They're pretty much unenforceable depending on the individual circumstances. In most cases they're not worth the paper they are printed on. No company can deprive an individual from making a living.
The only enforcement and penalty is damages caused, proprietary secrets, property, etc., that can be enforced.
my companies lawyer wrote one up for the service guys. It's basically an agreement that I won't work in a competing area or within 100 miles of our city for 3 years after leaving the company.
In short, it's unenforceable, as long as I don't try to actively target my current customer list.
I don't run into or haven't heard of these "can't work in the area in the same field for x amount of years".
I've only heard of "can't start a business in the same area/field for x amount of years".
Heard of that in many other businesses too. That seems enforceable. But I'm no lawyer. :rolleyes:
Sure they sound good.
Is a company going to persue it?
In the past three years I've personally witnessed employees walk with a customer list.Nothing happened.
One company sold.Old employee stayed on for a few months,saw things going south.Departed from the new guy with phone numbers.Now he's running three trucks in a little over a year.
My employment contract is approximately 17 pages long, not including any addendums. Yeah you read that right, 17. It has been a work in progress, started back in the 80's when I worked for another company as the National Sales and Marketing Director. Itís been tested in court and never lost.
For those of you that do not think a non-compete is not enforceable , (California - I canít speak for other states) it is. What it comes down too is how its worded and who it targets.
For example, you canít make an office receptionist sign one. It would never hold up in court. The litmus test is the fact that there are no true skills involved with answering the phone or managing the day to day routine of that position. They consider these non-skill jobs. However the exception to this rule would be a receptionist that worked at a company that made a top secret "Widget" for the government, and she fielded calls from speciality vendors, customers and had direct contact with key personal. Then the non-compete clause could be enforced to stop her from being employed at a competitor company. It does not stop here from being employed at a non-related company.
Where the non-compete does work is when you can demonstrate that your company provided unique training, and marketing skills to the employee.
Examples are hiring someone with little to no experience in a trade area. You, (the company) spend countless hours training that person. You provide them with a service truck. Tools, etc... You provide them specific proprietary techniques to accomplish there job. Tricks of the trade. Up selling a customer, how to bid against competitors, how your competitors operate, etc... Those are enforceable under a non-compete. Also the general rule of thumb is one year on a non-compete. Anything more and the courts frown on it. However, under certain situations a longer term Non-compete is enforceable. Examples are company executives, key personal, ie Service Mangers, Operations Mangers.......
When I created my first non-compete back in the 80's, I did it not so much for the fact that I thought it would be enforceable. I did it to scare employees into believing that he could not take the training and go off and start a competing business or work someone else.
When I left that company in the early 90's, four other key employees also left. One of them a very good friend of mine started his own company and immediately started competing with the old company. Bidding on projects, for example a Restaurant chain that was expanding, providing service for broken equipment, plumbing etc...
The owner of the company took the non-compete and sued my friend in Superior Court, California for a million dollars, breach of contract, non-compete etc....
The case went to trial and my friend lost, on the grounds I described above.
In the end the verdict reduced the amount he owed the company to attorney fees and a couple of thousand dollars. (He had nothing) but the restrictive part was they enforced the non-compete in two areas.
The first was the company submitted a current and past customer list. That meant that he could not call on, service, etc... any company name listed on that list. For example if the company was doing business with Hilton Hotel in Los Angeles, the Non-compete protected the company to every Hilton Hotel from Central California to the Mexican Border. This was the protection in the non-compete contract that dealt with proprietary customer lists.
The second part of the verdict restricted him from servicing specific target markets. Restaurants, hotels, hospitals, laundry, car washes, specific industrial/commercial companies etc...
That got justified because the company demonstrated that they had provided a unique training to the individual that was specific to that company and that the individual came to the company with no knowledge in that arena. Also the contract was so well worded that the court allowed the case to be sealed, due to "proprietary customer list" that was attached. In the end he was reduced to only working with residential customers. The restrictions were put in place for five years.
Another example was another one of the four that left, service manager, went to work for a residential water treatment company. The purpose of his employment with them was the company wanted to expand into commercial service and sales. His only role in the company was to develop the service portion and then oversee the employees etc....
The old company found out about the job and not only sued the employee but the company that hired him. They sued on the grounds that they had provided the training to this individual and everything that he knew was a proprietary secret from the company. In the long run the new employers lawyers advised the owners to let the employee go to protect the future of the company to go after commercial business.
Hope this info helps. All post some more Doís and donít that have helped me out over the years.
I have only heard of one case where it was enforced with success here...Most are not worth the paper as another member has posted. Unless theres alot of money at stake the only ones who win are the lawyers.
Here are the lawyers from BOTH sides after court......:party-on: