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Anyone have a non compete contract?

Discussion in 'Business Fundamentals' started by IMAGE, Nov 25, 2008.

  1. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    I am looking to hire a manager who would have a pretty much open book to the company bidding and pricing structure. While not a major deal at the size I am now, it could be important in a couple yrs, and I want to get a noncompete signed at the onset of employment.

    I couldn't find one searching. Anyone got one? I just want one that says the employee wont soliciate any of my customers for 2 yrs after termination with my company, or accept soliciations for bid from any customer they did business with while employed by my company. I dont care if they start thier own company, just dont want them using confidential company information to steal customers while they are managing for me(with one foot out the door, stealing customers on the way out, before giving notice, etc...).

    I found some on the net that were general and OK, but just want to see what you guys use or have signed if you subbed.

    Is there generally a penality written in a non-compete? Like 50% of the gross $$ of any account soliciated that the employee would of had knowledge of our pricing because of thier employment with us.

    Thanks for your help. If you dont want to post it up here, pm me and email it to me.

    Thanks, :drinkup:
  2. Grampa Plow

    Grampa Plow Senior Member
    from Midwest
    Messages: 274

    I have done several non competes for a travel agency and tanning salon that I owned. Have a lawyer do it. There is such a fine line between non-compete and restraint of trade it's not funny. A lot of times poorly written NC agreements are found to be non-binding and it will cost u a lot of money for nothing. Also, don't forget, enforcing a non compete is time consuming and expensive. The best rule of thumb is have it written in a reasonable fashion. In Iowa, it's hard to convince a judge to deny a person a right to work and make a living. A lawyer is expensive but money well spent!
  3. grsp

    grsp Member
    from indiana
    Messages: 89

    your best bet, and the only way to ever make it ever legally stand in court, is to have a lawyer write it up. our company attorney charges $200 per document. every non-compete is different, so requires different wording for every application. in my experience, there isn't a generic form for every individual. at least not one that would carry any weight in court.

    it helps us out lots that we barter out services with our company attorney. maybe find one that would work something out similiar.

    Messages: 32

  5. plowtime1

    plowtime1 Senior Member
    Messages: 446

    I always said...your training your next competitor. Hire a good attorney specializing in this field; it helps and worth the money JMO
  6. Grampa Plow

    Grampa Plow Senior Member
    from Midwest
    Messages: 274

    Holy Crap...4 consecutive posts and they all agree! That's gotta be a record...you should be able to take that info to the bank!
  7. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    Several years ago I made all my subs sign one. I just used a generic one from an office supply store. It was more or less to just make a point, which worked...but is a touchy thing here in Ohio. Best to use a lawyer draw one up like everyone else has stated...Just bear in mind that that info can be transfered or even sold to another competitor or a potential partner or associate w/ whom they chose to do business with...it's funny how that can all work, but can be very hard to prove in court!

    Expect the unexpected!!!
  8. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    A non-compete with your subs are one thing...pretty basic. But to make your "new manager" sign one as terms of his employment is another.

    While it's good to think ahead, you will effectively create a wall of non-trust from the onset with this individual. I personally would never sign anything to that affect. This industry is quite different from, let's say pharmaceutical, or other industries with real trade secrets.

    You will have a hard time preventing a former employee in this industry from pursuing employment with a competitor (and sharing his experiences with them), a customer, or even soliciting existing customers. I'm thinking your paranoia will get in the way of you properly choosing the right person for this position.

    If your new manager believes that reservations exist within you, or the trust you should have bestowed, he will not excel for you. Who would? That's asking quite a bit from someone you don't even know yet.

    Most would understand your concern, but you shouldn't make it an issue, or prerequisite. It would behoove you to hire someone who is either smarter or better than you in terms of your weaknesses, or one who is best suited to fill your void or new position.

    Choose wisely. Give him (or her) all the tools and support required and don't look back.....move forward.
  9. slongfellowii

    slongfellowii Senior Member
    Messages: 157

    Is it possible to have a customer sign one? Only for employees that might start their own company or act as officers of another company. Just thinking out loud.
  10. salopez

    salopez Senior Member
    Messages: 876

    Forget a non compete...you need a non disclosure agreement. Thats what I have run into this week.

    don't get me wrong a non compete is important, but the damage that can be done before they compete with you is huge!

    you don't want an employee give out proprietary information and pricing....
  11. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,249

    Excellent advice by both. I would suggest taking it.

    Just out of curiosity, if a customer decided to do his own plowing or salting, would you have an issue with that, since it's your specialty? After all, they're just trying to save a buck or 2.
  12. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    If they stole my contract(like one recently did), and used it as thier own, while lowballing the town, yes I would be pissed.
  13. Grampa Plow

    Grampa Plow Senior Member
    from Midwest
    Messages: 274

    I've had that happen before. I have never minded if they decided to buy their own equipment to do their own lots. That's what I would do if I was them if the numbers worked. I've also lost a few over the years when an employee of theirs bought a plow and asked them if he could do it. If it happens, it happens, no big deal.
  14. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    What if its not just thier own lots, what if they offer to do ANY driveway in town for $25? What if its a copy of my contract they are using?
  15. Rcgm

    Rcgm Senior Member
    Messages: 613

    Waste of time having a employee sign one. Call a lawyer first. 9 out of 10 judges throw them out saying you can't denie someone the ability to work. Take the guys advise above call a lawyer.

  16. Rcgm

    Rcgm Senior Member
    Messages: 613

    What if its your contract there using? As long as it doesn't have your name on it you can't do nothing about it. I am sure alot of guys on PS use the same contracts if they are using a sample one. I took 5 contracts off line and wrote my own adding and removing stuff as needed.It has worked for me for 8 years now.

  17. ford6.9

    ford6.9 Senior Member
    Messages: 452

    That is not denying someone the ability to work. In all non-compete contracts there has to be a "reasonable time frame" (this time frame is independent due to the industry) I am sure your lawyer will have an idea of what the state will allow by researching past cases that have been successful in your state & your industry. What will not stand is saying that someone can never plow for them selfs. Have a lawyer write it up, Its always cheaper to do things correctly the first time no matter how much more it is up front. And very good point on the non disclosure, that can cost you more than anything else. A foolish man with knowledge is still a fool. But the smart man that overhears the fool is dangerous.
  18. Grampa Plow

    Grampa Plow Senior Member
    from Midwest
    Messages: 274

    1. If they do every driveway in town for $25, I sub out my lots to them (with their contract) and I collect my money every month!
    2. My contract was probably scarfed off of the internet, like most everyone else's, who then tweaked it to fit their needs. Again..no problem!
  19. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    I asked this question earlier this year. What I got was give it a time frame. 1 year. Give it an area. My county. All my employees signed it and it says, If they leave on bad terms, they can't work for a landscape or snow removal company for a period of 1 year in Kalamazoo County.
  20. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    Doesn't make any sense. If a guy "leaves on bad terms", that means he was most likely terminated for failing to meet whatever measurables you have in place (IE; tardiness, not showing up for work, poor workmanship, failing to meet goals, insubordination, theft, difficult behavior, etc., etc., etc...) Why would you care if his next stop is a competitor? What's it to you...........let them deal with a marginal or crappy employee.

    So, it would be OK for them to seek employment with others in your county if they "left on good terms"? Which is what......giving a week or two notice? That might be the one you really don't want to loose.