Employees can get you big time

Discussion in 'Lawn Mowing' started by Mdirrigation, Mar 8, 2004.

  1. Mdirrigation

    Mdirrigation LawnSite Silver Member
    Posts: 2,766

    A friend of mine with a fairly large operation ( 7 crews) sent out his 1400 contract renewals in January and 200 were signed in Jan , 200 in Feb and about 50 this month. Finally a bell goes off in his head and he starts calling customers. Well come to find out there is a new company in town. He hired all imported labor 2 years ago , these guys spent the winter going to all his customers and signing them up. Naturally they went after the best paying ones first. He now has 7 rigs and only enough work for 3 , and only enough guys to run 2 crews , the rest went with their amigos. He wants to sue the guys for stealing the customers. I told him not to waste his time , there is no law against starting a business and solicitating work from you ex employers customers. ( unless they were in his employ at the time they solicitated the customers)

    Remember that you could be training your future competition, they know your customers , and they do the work. A non compete clause is a great thing to have your employees sign.
     
  2. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    But if he lost that much you kind of wonder if he wasn't providing that good of service then. That is a lot of customers to lose.
     
  3. proenterprises

    proenterprises LawnSite Silver Member
    Posts: 2,297

    what an idiot. who wouldnt put a no compete clause in their employment contract. he just crushed himself and lost almost 1,000 ACCOUNTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    i am not sure wether they bailed because he does crappy work or just the price. I would tend to say price though.

    You dont get 1,400 accounts by doing crappy work.
     
  4. xcopterdoc

    xcopterdoc LawnSite Senior Member
    Posts: 752

    Yup.. not to mention.. Why did his workers bailout on him and go on their own??
     
  5. Mdirrigation

    Mdirrigation LawnSite Silver Member
    Posts: 2,766

    2 former employees started the company and got the rest to come to work because they are from the same country. He runs a good operation he got blindsided , he didnt think his spanish guys had the knowledge to strike out on their own. I was telling this to a guy that owns a nursery today and he knows of 2 other companies that had a similar problem
     
  6. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    Welcome to the nightmare that is the future for immigrant employers in America. Those neato ultra low-paid workers you hire will be working for themselves and putting you out of business in a few years. Once they learn the language skills and get enough cash together, you're history. And since they can band together and save the latter, it will happen even if you try to prevent it. Courts have consistently ruled against non-compete employment contracts that are too restrictive (such as "will not work for anyone else in the lawn maintenance biz" or "will not start own business") and do you really think you'll be in court suing some Immigrants in pickup trucks ? I'd love to see the quality of attorney who would take that case, seeing as there won't be much in the way of a collectible judgement.

    You can't do it alone of course, but if wages for workers were higher, they would have less incentive to deal with the risk and stress of self employment and most would prefer to remain employees with stable incomes and decent benefits. But give them the choice of poverty or self-employment and guess which they will choose. One reason many businesses in higher paying fields don't have this problem is that their wage structure tends to keep employees happy enough to not go out on their own. Self-employement is harder in many ways, but if the alternative is to remain poor forever, many more will choose to become your competitors. And face it, you can't compete with them when it comes to price.

    As the saying goes....you reap what you sow. Develop an industry that depends mostly on immigrant labor at low wages and it will eventually come back and bite you. Funny how things work that way.
     
  7. promower

    promower LawnSite Bronze Member
    Posts: 1,232

    After he sent out renewals that left 950 accounts that did not renew with him. Lets say his former employees were able to attain half of those accounts (425) Thats a ton of work not to mention a lot of startup costs to be able to handle that size of workload. I think these guys will flop and return begging for there jobs back, at which point I would slam the door in there face.
     
  8. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    that is a good point promower
     
  9. dkeisala

    dkeisala LawnSite Senior Member
    Posts: 911

    Afraid of competition? Get out of the business.
     
  10. Mudmower

    Mudmower LawnSite Member
    Posts: 102

    Bruce32 had a great point, welcome to what has been happening in Southeast Texas for better than 20 years. And don't think lack of funds will slow them down. They can get a small business loan (backed by the government) faster than you would ever believe.

    How would you like to have started your business with someone else's money????? With very liberal repayment terms??? Happens all the time here.......

    Jim
     

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