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Do not compete contract

Discussion in 'Business Fundamentals' started by ThePlowKing, Sep 21, 2006.

  1. ThePlowKing

    ThePlowKing Member
    Messages: 59

    I was wondering if anyone out there makes their subcontractors sign "do not comptete" contracts. I want to start having both my employees and subcontractors sign a contract preventing them from bidding against me with my current clients. This industury is cut throat enough, I don't need my own guys goin behind me back and takin work from me.

    Thanks for the help

    CARDOCTOR PlowSite.com Addict
    Messages: 1,312

    the co. i sub for has one . 2yrs no compete

  3. jcesar

    jcesar Senior Member
    from Mi
    Messages: 492

    I have 2 guys that work for me with my trucks. They have their own, but I prefer to use mine. Liability issues. Anyways, I make them sign a noncompete clause for 2 years. Cant bid on my jobs, or work directly for anyone i sub for .Hope this helps
  4. Big Dog D

    Big Dog D PlowSite.com Addict
    Messages: 1,134

    My question would be are they even enforceable ????
  5. Keith_480231

    Keith_480231 Senior Member
    Messages: 389

    Would be interested in seeing one if someone could send one to me at keith_480231@talkamerica.net. I am curious to see if they are enforceable also?
  6. jcesar

    jcesar Senior Member
    from Mi
    Messages: 492

    The state of Michigan has a law for these things. It says, that a verbal contract if proven will stand up in court. Any contract that is signed, dated and notarized is a legal binding document.
  7. millsaps118

    millsaps118 Senior Member
    Messages: 702

    I know what the law is on this in MN just because I went through it with this guy I use to sub work to. I won't go into details on how a "NON-COMPETE" clause really works cuz I might pizz off a lot of people who know the law on this. I will say it does vary from state to state, and if you find the right answer you might be real surprised! I know I was.:angry: :angry:
  8. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    Translation: It's still the USA last I checked and Non Compete clauses are useless, unenforceable, and a waste of a sheet of paper.

    Trying to stop someone from free enterprise is nearly impossible,as it should be, and un american if you ask me.
    Last edited: Sep 23, 2006
  9. bigjeeping

    bigjeeping Senior Member
    Messages: 678

    Thank God for Free enterprise!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  10. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    It's a risk of teaching someone your craft and inviting them into your house. Kindof like a marriage. Everyone brings something to the table and everyone walks away with something.

    Its not always fair and I see the "intent" of the theory and Im sure in some circles it may be enforceable, but I dare say weve all walked away with a contact, some networked people, some ideas, and a starting point.

    Im not advocating stealing work from close associates but we all started somewhere.
  11. Gicon

    Gicon Senior Member
    from MA
    Messages: 989

    2 Year Non-Compete, 35 Mile Radius, Cannot work for, advise, or start your own company.

    JD PLOWER PlowSite.com Veteran
    Messages: 751

    I had a conversation with our lawyer about this subject and according to him the law (around here) gives the judge a wide interpretation of what’s fair and what’s not as far restrictions go.
    He told me you really have to watch it when it comes to making them too broad and far reaching. He said you can't tell an employee that they can't open/or compete against a business within two or three miles of yours if there are three or four others providing the same service all within the same distance to your business. You can't tell an employee that they can't open a landscaping business within so many miles of your location if you have three or four landscaping companies in the same area. Competition already exists so get over it.
    You can't make it for a long period of time. Two years is pretty much the most you can hope to make enforceable around here.
    How enforceable it is probably also depends on how much money you want to spend. The bigger companies that use them also have plenty of lawyers, so going to court might mean that what they really want is not the contract or to keep the person from working for another company, but just compensation. I first heard about non coms when I was dating a secretary for a healthcare company and she told me that when ever an exec would leave they would tell them if they gave up their compensation or buyout package they could be free to work for anyone in the healthcare industry or they could wait six months or a year.
    I also haven’t heard of anyone enforcing them for snowplowing but it probably has been done on the larger projects where the money is really big? Hope this helps.
  13. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

  14. ThePlowKing

    ThePlowKing Member
    Messages: 59

    Does anyone know where i can find a do not compete contract anywhere, or does everyone pretty much make up their own and go over em with their lawyers?

    On a side note, i believe in free enterprise just as much as any other hard working american, the problem I am having that has raised the issue of the do not compete contract is for the last 3 years i have been subcontracting work to a guy who has helped me with supplimental plowing when needed, now he's going to my customers and bidding against me because the properties he has helped me with are the only one's he konws and is comfortable with. He is also using me as a reference without my permission and telling my customers he is a "business partner." Personally, if this guy wanted to go for other contracts i'd even be willing to help him out to bid them properly so he could get them and not end up as just another lowball hack, but he's trying to take my work right out from under me and trying to do so by lying. I think is quite unprofessional and unbusinessman like.

    Thanks for the help everyone

  15. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Brian, what makes you think he'd sign a noncompete contract now? The time to have them sign is when you first hire them. The other thing is - you have to decide if it's worth pursuing even if you do have a noncompete contract. If someone did violate it, you'd have to give them an opportunity to cease and desist. Then if they didn't stop, you'd have to file and take them to court. Maybe you'd win, but what would you win? It would cost you money, time and aggravation with no certainty that the judge would back you. Then, you'd have to somehow enforce the award you MIGHT get. And that may be years after you start action.

    Also follow up on some of the suggestions above about being enforceable and pay attention to what JD Plower wrote.

    Personally, I wouldn't waste my time with a noncompete.
  16. Five Star Lawn Care LLC

    Five Star Lawn Care LLC Senior Member
    Messages: 426

    Yeah ive got a lifetime no compete cluase....his name is Brunno, my dad used to know him back in the 70's....he will put anyone 8 feet under for only 99.95
  17. Joe D

    Joe D Senior Member
    Messages: 605

    Brunno's clause has been overwritten by the Smith and Wesson clause.:D
  18. flykelley

    flykelley 2000 Club Member
    Messages: 2,127

    I have subed for 2 large companys here in mIchigan and they both had me sign a no compete contract for 2 years on the jobs I subbed for them. I look it as not a big deal I needed some extra work that first year, last year a friend from the owner of the 1st company told him to call me to do some jobs in my area for him. I guess my point is if you do your job right you will have work no need to steal work from a company that already has the contract. I do have a copy of that contract if anyone want it send me a email flykelley930@aol.com or a PM

    Regards Mike
  19. ThePlowKing

    ThePlowKing Member
    Messages: 59

    At this point in time there is no guarentee that he will sign a do not compete contract. However, the advantage I have right now is that the only plowing work he is getting is from me. I know he still has the opportunity to work as a subcontractor for another company or he can try to go on his own, but he lacks the equipment and manpower to handle large accounts. Long story short... if he doesn't sign the do not compete contract, i don't really care, however he'll be out the work for the winter, so it leaves him with only a few options. At least I have the satisfaction of konwing that he's not working for me and trying to steal my clients when I'm not looking.

    I am also gonna start tryin to sign the following year's contracts right after this year's plowing season has ended, at least then I don't have to worry about this nonsence.
  20. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    i become friends with my employees and subs, if they are willing to invest the big $$$$ it takes to start a business, i will be more than willing to help them,no need to steal jobs from me, i'll give them away. why wouldn't you want to help someone better themselves. if you help them out it will only help you to network and dominate the region.
    Last edited: Sep 26, 2006