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View Full Version : no compete clause...


nobagger
11-01-2006, 01:58 PM
Who has employees sign a no compete clause prior to each season. If so, is it just not to compete with your customers or is it in lawn care itself.

WJW Lawn
11-01-2006, 02:31 PM
Ive always heard non competes make good toilet paper.

Total.Lawn.Care
11-01-2006, 02:34 PM
Most non-competes are designed to prevent someone from taking your customers in the same industry. In other words, it would prvent them from operating a business or working for another business in a sales capacity that would solicit business from your customers for the same services that you provide. So they may be able to work for another company, as long as they are not soliciting business for that company, and it gives the a period fo time that they cannot start up, pruchase or otherwise take over operation of a company that woudl compete with yours.

Frontier-Lawn
11-01-2006, 02:49 PM
when i have a need for some employees i will have them sign a 1 year term DNC Clause which takes effect the moment they quit or get fired and wont be able to start a lawn company, just work for another company.

JB1
11-01-2006, 03:38 PM
I think it would be a waste of time.

rodfather
11-01-2006, 04:21 PM
Enforcing it would be difficult I would think and the fact I have more important things to worry about

JJLandscapes
11-01-2006, 04:33 PM
another reason why many people hire illegals because they will never have enough money/ resources to branch off themselves.... why they are such hard workers and have loyalty because they will work with you for 20 years


you might as well have them sign it i doubt an employee would refuse to do it... what are the chances of you finding out they are cutting one of your lawns anyway im sure they would hide pretty good from you.... if tyhey take all your customers its one thing but are you going to waste time to bring someone to court if they stole an account?

Surf'n'Turf
11-01-2006, 04:45 PM
Not worth their weight in ink.

Frontier-Lawn
11-01-2006, 05:08 PM
when i applied to a landscape lighting company in 94 for a job out of vo-tech, they had me sign one with a part that they check all license boards for 2yrs after separation with the possibility of $10,000 in damages they would asked for in addition of your company being disbanded and assimilated into there's. and it was sign by a big legal company as the maker of the form.

rodfather
11-01-2006, 05:16 PM
with the possibility of $10,000 in damages they would asked for in addition of your company being disbanded and assimilated into there's. and it was sign by a big legal company as the maker of the form.

interesting strong arm method..however extremely unlikely to say the very least :laugh:

Fantasy Lawns
11-01-2006, 05:24 PM
Frontier that's interesting

What was the compensation they gave you too sign the agreement

MarkintheGarden
11-01-2006, 06:28 PM
Cover yourself with a non compete clause it is worth the ink, if in the unlikely event an employee just plain goes out and steals all the gravy work from an employer. Could it happen? In order to enforce it you would have to file a lawsuit, certainly not worth it over a couple accounts, how about the best 60% of your customers? A smart guy could pull it off, especialy in a situation where customer satisfaction is lacking. Even 25% would make it worth the lawsuit.

I think the clause should cover the area of operation. I would be happy for any of my former employees to go out on there own, just take it to the other side of town.

Precision
11-01-2006, 06:59 PM
Cover yourself with a non compete clause it is worth the ink, if in the unlikely event an employee just plain goes out and steals all the gravy work from an employer. Could it happen? In order to enforce it you would have to file a lawsuit, certainly not worth it over a couple accounts, how about the best 60% of your customers? A smart guy could pull it off, especialy in a situation where customer satisfaction is lacking. Even 25% would make it worth the lawsuit.

I think the clause should cover the area of operation. I would be happy for any of my former employees to go out on there own, just take it to the other side of town.
but by the time the process winds its way through the courts you are already dead as a company and do you really want the clients back who went with the former employee and do you think they will want you back. And what kind of assets are you gonna get from the "new company".

This is really just a different version of I lost all my accounts to lowballers. If those are the kinds of accounts you have then be aware, otherwise don't bother worrying.

jameson
11-01-2006, 07:54 PM
Huh. None of my employees have the motivation to start out on their own - I keep them fat and happy under my roof.

However - When I started out my old boss was an incompetent horses a$$ - and I was young - fresh outa college and motivated. I took a good chunk of the choicest accounts with me when I departed - candy from a baby.

Moral of the story - Mind your business.

;)

AintNoFun
11-01-2006, 08:30 PM
you'd probably be the first one to cry foul if it happened to you.. i have a cousin who has a large manufacturing biz, one of his key engineers left to work for another company. my cousin took him to court, had a non compete and non disclosure contract. he lost on the non compete and won on the NDC. i forgot what he got but it was decent amount. he lost the non compete because the judge told my cousin he cant stop someone from making a living especially in a field they know best...



However - When I started out my old boss was an incompetent horses a$$ - and I was young - fresh outa college and motivated. I took a good chunk of the choicest accounts with me when I departed - candy from a baby.

jameson
11-01-2006, 09:50 PM
you'd probably be the first one to cry foul if it happened to you.. i have a cousin who has a large manufacturing biz, one of his key engineers left to work for another company. my cousin took him to court, had a non compete and non disclosure contract. he lost on the non compete and won on the NDC. i forgot what he got but it was decent amount. he lost the non compete because the judge told my cousin he cant stop someone from making a living especially in a field they know best...

LCO's are like rabbits around here - we are saturated with them. I would not discourage (nor actively encourage) any of my employees from diving into the market to see if they could make a go out of it.

Fat chance any LCO or ex-employee taking any customers from me. I 'mind my business' - I have carefully cultivated working relationships with my clients. After 10+ yrs of business I still retain each and every customer that broke ranks with my old boss. In those 10+ yrs almost every new customer added has been a referral - I cannot remember when I last advertised for new business (maybe 1999?).

My old boss was a dolt - I learned what not to do. I treat my employees very well - old boss did not - they are compensated generously for their time. I keep tight reigns on every aspect of my little enterprise - old boss had trouble finding his truck keys. Whether I am phyically present on the jobsite or not - I am the face of my business - old boss had zero name recognition with clients. I could go on ad infinitum ad nauseam.

ECS
11-01-2006, 10:02 PM
However - When I started out my old boss was an incompetent horses a$$ - and I was young - fresh outa college and motivated. I took a good chunk of the choicest accounts with me when I departed - candy from a baby.
I did the same thing. My boss fired me, threw my ass out in the street, lost my housing. I am sure my old boss thought i was just going to get up and leave the valley. WRONG!!!!! Don't have the #s readily available right now for last year, but for 2006, the business I took from them is close to $30k and still 2 months to go. I also took a lot of their potential customers from them. I pushed them to get these customers and they sat on their arse and did nothing. These same potential customers total another $20k for 2006. Not a wonder why I would be dead if looks could kill. They give me the dirtiest looks, and I just look back at them and smile.

Frontier-Lawn
11-01-2006, 10:06 PM
Frontier that's interesting

What was the compensation they gave you too sign the agreement

$1,000 signing bonus paid in 2 $500 checks after each 6months over your 1st yr (didn't get the job thou for the training poss.)

steve45
11-01-2006, 10:40 PM
A non-compete clause is worthless if you fire someone. You can't keep them from earning a living. If someone wants to go into competition with you, all they have to do is make you fire them and they're off the hook.

As an engineer, I've had to sign a couple of them. However, that is a much more specialized line of work. It can also be applied to intellectual property.

Frontier-Lawn
11-01-2006, 10:45 PM
it prevents them from starting there own compnay not going to work for a different company

Ed Ryder
11-01-2006, 11:48 PM
I attended some seminars on non-competes about 10 years ago. Back then the maximum viable duration was 2 years, and there had to be limits, including geographical limits. Like you couldn't demand that they not re-enter the lawncare workforce anywhere on the planet. A tight geographic area would be more enforcible, like one or 2 zip codes. The non-compete must be reasonable to hold up in court.