[Bob Shoaff]

I have what may be a stupid question. I am getting ready to hire a crew supervisor as well as a crew member or 2. I have heard horror stories on how you hire someone, train them or for someone with experience you let them get more involved and then to reward you they try taking business from you. Now for the question. Has anyone ever had an employee or supervisor sign anything stating that they are not allowed to solicite your business or have a business in your area within a certain amount of time from leaving your company? Any thoughts or hysterical laughs would be appreciated. Thanks.

 

[Skookum]

I believe, many large corporations have such clauses that are even usable for damages if broken. I would say it would be worth an attorney's hour rate to find out if you are that worried about adding such a clause.

 

[treyhamra]

man if they do steal biz then you can take them to court. im not sure what the charge is but if it happens i would reccomed hiring a lawyer to help you. unless its worth your time,say 25 accounts , then hell yea take him to court. but yes i would think that he could sign a stament that if he ever becomes unemployed from you, then he must stay away from your customers for a given amount of time.

 

[JimLewis]

That is not a stupid question at all. It's a very common reality. So to protect ourselves, companies use what's called a "non-compete agreement". It is best to spend $100 or so and have an attorney create on for you. But there are free ones available on the net.

We make every employee sign one and it's important they sign it on or preferably before their first day of work, for legal reasons.

There are two facets to a basic non-compete agreement.

1) That the employee will is not allowed to share knowledge of your company, clients, trade secrets, etc. with anyone else for any reason for the duration of employment and X years after. (Ours is 2 years)

2) That the employee agree not to become your direct competition for the duration of employment and X years after. (again, ours it 2 years). This part of the agreement also limits the employee for a certain mile radius. The courts have generally agreed that it's not fair to block an employee from starting his own business anywhere. But that it is reasonable that the employee not do it in your territory. Ours is 10 miles.

These are things you discuss with your lawyer as it may change from state to state as to how much you can get away with.

It is important to note that Non-compete agreements are not always totally enforcable. And even when they are, it's not often worth the effort to pursue enforcement of them. However, it is the psychological effect on the employee that matters. They don't know this so the mere fact that they THINK they are bound by the agreement, typically keeps them from trying.

I think these agreements are invaluable. My first employee is now my competitor. Fortunately we are friends so it doesn't hurt so bad. And fortunately for me he doesn't have the best business sense to he isn't much competition. But once guys see that there's good money to be made in the industry their minds start turning. You want to make sure you are not in the business of training your direct competition.

 

[kutnkru]

RESTRICTIVE COVENANT



Governing the Confidentiality of Information and Non-Solicitation of Company Business Or Customers by Contractor after Assignment with the Company.

This Restrictive Covenant is made between ( Joe Landscaper D.B.A. LAWN MEDIC – TRIPLE CITIES, City, State, the Company, Work Designator, and/or John Q. Public, D.B.A. SOUTHIERN LAWN & LANDSCAPE, City, New York, the Sub-Contractor.

Whereas, the Sub-Contractor expressly understands and agrees to abide by the following covenant:

In recognition of the value of the trademark, corporate name, reputation, and good will of the Company, and the value of the training and operating methods and techniques of the Company, Sub-Contractor expressly covenants and agrees that in the event his work assignment is completed or terminated for any reason, he will not for a period of 18 months thereafter engage either directly or indirectly as a principal, alone or in association with others: in the solicitation of or in contracting with, existing customers of the company as specifically shown and listed hereto attached, similar services provided such customers by the company.

In the event that LAWN MEDIC-TRIPLE CITITES ceases operation, sells its business and/or accounts, or should become financially insolvent this covenant shall no longer be binding and will be considered null and void.

I, John Q. Public, the Contractor/Sub-Contractor, Have read, understand, and agree to the above covenant, and so acknowledge by my signature and date below.

 

[kutnkru]

Basically they wont come to work for me, learn the customer base and then either go work for the competition or themselves.

If you take the time to get to know your customers, are personable, and provide exemplary service ,,,,, we should have nothing to worry about.

As a side note if they can take away a customer that easily then they were not woth acquiring to begin with.

Hope this helps.
Kris

 

[Green Finger]

What has worked for me is you treat them good and pay them good but you work their fingers to the bone.

You work them to the point that on their day off, Which is Sunday. That they are at Church, after Church catch a game and they go to sleep.

and come Monday It's back to the TERROR DOME.

Also I don't share any financial matters with the guys. I don't have them do any collections. I will mail bills and I will collect.

My guys are just that employees, not owners.

Another thing, I call all my customers twice a month to check on them.

I try to establish a bond. So some clown wouldn't be able to come in steal them. I let them know that they have a professional landscaping company and not a mom and pop shop.

Control is given up in moderations. But total control is never given up.

PROTECT YOUR INTEREST.

P.S. If all else fails and they try and steal some of my accounts, I'll just send my cousin BUBBA after them, some how he has a way of making them get out of the lawn business. LOL

 

[Bob Shoaff]

Thanks to everyone for your help. As always there was a few good different viewpoints. This site has really helped alot in the advancement of my business. If we all listen to each other and share our knowledge we should all be millionaires in no time! Thanks again.

 

[Green Finger]

AMEN TO THAT BROTHER!

 

[GroundKprs]

I started out working with a guy who had a do not compete clause in agreement, and I was to work as a subcontractor. Took agreement to my attorney, and he said never to come back to him if I signed. Do not compete is used in many fields today almost as a form of servitude. The general legal principle of "interfering in an economic relationship" can be used as protection against former employees raiding your customer base, but of course it is about as useless to try to enforce as trying to enforce a "do not compete" agreement.

So, if you are looking for gaurantees, forget it. But do consider using a do not compete clause as a psychological block, as Jim Lewis stated. One problem is that you will scare off experienced and/or intelligent workers who do not want to be enslaved to the agreement.

 

[Bob Shoaff]

OK. Now this has created another thought. Does anyone offer any incentive or profit sharing to their crew leaders?

 

[JimLewis]

I agree with Jim. But I am not sure it would scare off experienced employees. Because most non-compete agreements don't prevent them from sarting their own business. It just prevents them from starting one within a few miles of you. They can start one anywhere else.

 

[Green Finger]

Bob,

Personally, I don't say overitme or profit sharing.

What I do have is: if a crew manager completes his routes with no call backs. I do give out random bonuses.

Gotta take care of the good ones.

 

[1stclasslawns]

Non-compete agreements in the coutrs are just that agreements, from what I have seen in my aera that is. I know of some that have been broken that have worked for very large pest control companys for years.
I talked to a lawyer last year about the idea of a contract in which the employee agreed if he did start a lawn care company in the aera I served,that they agreed to pay me 50% of the gross reciepts as educational fees for 5 years from the date of the termination of employment.
He thought of it for a while and told me he thought it would work.
Heres why.
You are not keeping them from making a living.
Adn they are getting years of knowledge and learning. That you have gotten from the school of hard work.
A little absorbident yes but he told me it was enforcable because it is a volentary agreement, they can do what ever they want to do if they choose to do lawn work later you win.
btw this is a chancery court judge and happens to be a client.

 

[JimLewis]

As I said in my initial post, this is something that varies from state to state and you need to talk to a local attorney for the best advice. In my area, these agreements are enforceable and the courts do enforce them if they are written fairly and correctly. Whether they are worth the effort is another issue.

 

[kutnkru]

Yes.

Say that a crew's sales were $80k for the '92 mowing season. I would take 5% of that(=$4000) and divide it up over 8 months. This would mean $500/mo for the '93 mowing season or aproximately $125/wk added to his/her paycheck.

I would only offer this to employees who have been with you for at least 3 seasons only. This way you know that both of you are obviously interested in a long term employment agreement.

The other way to think of it is this:
Is it worth loosing possibly $76k in sales because you weren't willing to show some gratitude to those who drive your operation upward.

I would also contemplate giving laborers say 1%($400) bonus check "CASH" at the end of the season. Employee's always talk. This way everyone wins. They come back the following year, and we can rest at night knowing our clients will be happy.

Hope this helps.
Kris

 

[MRSleeslawncare]

What you need to do is have them sign a "NON-COMPETE" contract. Computer engineering companies do it all of the time with their techs. Standard time that your employee could solicite customers or go into lawncare at all is at least one year (this gives it time for the relationship between the customer and your former employee to go cold) and sometimes up to 5 years. it depends upon what you want to do, but a lawyer can get one drawn up for you. They are not difficult to create, so you won't need an expensive lawyer. The trick to finding an inexpensive lawyer is to use a New lawyer at a smaller firm. They are generally around $100/hour whereas a partner or one practicing over 10 years will be around $180-200/hour. (in this area anyway)

 

[Majestic]

Upon hiring new employees we make them sign a non compete clause also.Will they have to actually pay damages? Not sure.Most people applying will just want to work for you and not have the headaches as long as you treat them good.We also issue and make them sign off on safety glasses,hearing protection,and safety orientation.Keep your customer base personable and 98 percent wont even look at another contractor.If they do you arent losing much just a price shopper.Dont work for price shoppers they"ll try anything to save two bucks. As far as bonuses ive tried several and I have found the best to be sporadic and based on abilities.Most employees are floored when they are the last to leave at the end of the day and you call them to the office to Thank them and pat their back for a job well done,Slide them a nice bonus when YOU feel its deserved and your guys will really respect you.Don't forget about pay raises a little money spent now is how you will build your future.I want my guys to make so much working for me that they would never consider another contractor and I tell the that.I also make them aware that team effort is the only way to accomplish that.