Thoughts on non compete clauses? Anyone have one?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My employer had me sign one when I started; I can't work in solar anywhere for three years.

I only make about $70k as an engineer and consider it a worthless piece of paper. I am openly looking for the same position at competing companies.

More than likely yours is not enforceable. It is too broad and unreasonable.

You really can't say that without knowing what law governs the agreement, the specific terms of the agreement and, to a lesser degree where the new job is.

It may be too broad for most states, but some will redline an agreement, meaning they will narrow the agreement to limit certain activities, which may be enough for the PP to have a problem. Other states will simply strike an agreement that is overbroad.

[Anonymous]

They are the worst. I had one from a govt contractor which was 3 years on product AND industry - meaning any govt agency or govt contractor was on the hook! And they got litigious. I ended up finding an equivalent job in Healthcare so avoided issues; but come on 3 years no gov work in this town is close to impossible.


My old company went after a $30k/year employee who went to a competitor to make $50k. They sent lawyer letters to both her and the competitor. The competitor dropped the employee. She ended up homeless for a few months; it was awful.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My company puts them on low-level people with none of the leverage that pp's describe. I think it's pretty crappy to make run-of-the-mill employees sign them. Fine at the VP level and above where people are involved in long-term strategy and decision-making.

Many aren't enforceable. See, for example, Home Paramount case in Virginia.

Varies greatly by state. They are basically useless in CA, for example. In general, the broader it is, the less enforceable. But 'enforcement' is only done in court, and that does not stop lawyers from threatening action, which is often enough to scare people off. One thing I'll say as an employer - if you have one, disclose it to your new employer before you are hired. If you do not, and your old employer goes after your new employer, you will look pretty dishonest. Technical people are the worst on this stuff - they sign whatever is put in front of them and then claim ignorance to the new employer. I'd dealt with it a few times.

[Anonymous]

Anonymous wrote:Except in some cases like law, I think they are pretty much garbage. And even in law, I think they should be restricted only to prevent people from stealing clients away from their previous employer.

It's just another way to hold a thumb down on employees who will be cast aside like garbage whenever it's convenient to their employer. Luckily, they are often unenforceable.

I use them for employees, but they are written to restrict competing with existing clients and prospects. So you can't walk out the door, take the sales pipeline with you, and start calling into those accounts. Those are 100% enforceable. Saying you cannot work in the industry is typically only found in buy out agreements - that is, I bought your company from you, and you cannot start another one doing the same thing for a period of time (typically 5 years).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Except in some cases like law, I think they are pretty much garbage. And even in law, I think they should be restricted only to prevent people from stealing clients away from their previous employer.

It's just another way to hold a thumb down on employees who will be cast aside like garbage whenever it's convenient to their employer. Luckily, they are often unenforceable.

I use them for employees, but they are written to restrict competing with existing clients and prospects. So you can't walk out the door, take the sales pipeline with you, and start calling into those accounts. Those are 100% enforceable. Saying you cannot work in the industry is typically only found in buy out agreements - that is, I bought your company from you, and you cannot start another one doing the same thing for a period of time (typically 5 years).

This is how it should be. But I have seen tons of these and this is not usually how they are drafted. Many times the employer is very overly broad. It is terrible. Unless you are in a state like Virginia that will just toss out the whole thing if it is too broad. And then it is great if you have the means to fight it. But too often low level employees are forced to sign them with no ability to fight. Awful.

[Anonymous]

Jimmy John's used to put them on front-line sandwich guys. They've since stopped the practice.

https://mobile.nytimes.com/2014/10/15/upshot/when-the-guy-making-your-sandwich-has-a-noncompete-clause.html

[Anonymous]

Anonymous wrote:I love non competes. They are HUGE levers for massive pay. Don't want me to work for a direct competitor for a year? No problem, I want 3x annual salary as a sign on to compensate for the risk. Boom, huge payday.

And then when you leave it's simple: they hire you into a role outside your non compete to lock you in, then once your non compete expires you move into the right role. It's done all the time.

This doesn't work when you are shoveling dirt. Did you read the article? It focused on people in lower level jobs.

[Anonymous]

I saw one for a help desk person. Literally the lowest level IT person you could find. And the prior employer went after the employee. Also had terms in her agreement that she had to repay training $, claw back raises if she left, just horrible stuff. This on a 40K/yr IT person.

[Anonymous]

Anonymous wrote:I saw one for a help desk person. Literally the lowest level IT person you could find. And the prior employer went after the employee. Also had terms in her agreement that she had to repay training $, claw back raises if she left, just horrible stuff. This on a 40K/yr IT person.

How do all of these employers know where low level people go for their next job? Are they sitting their pulling up LinkedIn pages or otherwise tracking them down? Seems like a giant waste of time.

[Anonymous]

I think these are just immoral for normal, every day employees. These companies going after $30k and $40k a year employees are criminal. I refused to sign one at a previous govt contractor. They seemed shocked. I was a mid level employee at the time.

[Anonymous]

I got screwed on two things in my last noncompete:

1. not being able to work for a customer

2. not being able to recruit any former colleagues

I really wanted to work for a customer but would have been screwed. I also really wanted to hire a few coworkers (months after I left and they were actively looking).

[Anonymous]

Anonymous wrote:I got screwed on two things in my last noncompete:

1. not being able to work for a customer

2. not being able to recruit any former colleagues

I really wanted to work for a customer but would have been screwed. I also really wanted to hire a few coworkers (months after I left and they were actively looking).

So your prior employee introduced you to a customer and your former coworkers, but it's ok for you to poach both? You are why these exist.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I got screwed on two things in my last noncompete:

1. not being able to work for a customer

2. not being able to recruit any former colleagues

I really wanted to work for a customer but would have been screwed. I also really wanted to hire a few coworkers (months after I left and they were actively looking).

So your prior employee introduced you to a customer and your former coworkers, but it's ok for you to poach both? You are why these exist.

+1

[Anonymous]

Perfect timing with this question for me.

I'm making a career change from office drone to the beauty industry.

After beauty school I applied to be an employee at high volume salon #1 and was given a non-disclosure/non-compete to sign. The non-compete was really a no solicitation for 2 years agreement. They don't want you to steal their clients. No problem. The deal breaker for me was the money I'd have to pay if I didn't make it through at least one year at this minimum wage + low commission + tips job to reimbursement them for my training. It was literally 2+ months' salary if I left early and there are close to no benefits like flexibility like I was expecting at a salon job.

I moved on to high volume salon #2. I have been in unpaid training for two weeks. Now the owner has told me I need to sign a non-disclosure/non-compete to start getting paid as a 1099 contractor. I've read it and this one says no stealing clients, of course. It also says I can't start my own salon or have an ownership stake in a salon business within 10 miles of her salon. I am a business already and if her business is slow I don't want to limit my ability to make money. I could be ok if she reduced the radius to 5 miles.

A few things about job #2:
1. The owner is currently in a lawsuit with a former contractor who started her own business with the owner's blessing until she heard that contractor was soliciting her clients.
2. The owner let another contractor leave with her blessing to start her own business because that girl had a lot of complaints about poor service and she was trying to figure out how to get rid of her anyway.

One of my friends is warning me that the owner of salon #2 sounds unstable, but the commissions are great and she is very flexible with work hours which is why I'm willing to put up with some of this craziness.

Anyway, I've read that 1099 contractors cannot be held to non-competes like employees. Does that apply in Virginia?

[Anonymous]

Anonymous wrote:Perfect timing with this question for me.

I'm making a career change from office drone to the beauty industry.

After beauty school I applied to be an employee at high volume salon #1 and was given a non-disclosure/non-compete to sign. The non-compete was really a no solicitation for 2 years agreement. They don't want you to steal their clients. No problem. The deal breaker for me was the money I'd have to pay if I didn't make it through at least one year at this minimum wage + low commission + tips job to reimbursement them for my training. It was literally 2+ months' salary if I left early and there are close to no benefits like flexibility like I was expecting at a salon job.

I moved on to high volume salon #2. I have been in unpaid training for two weeks. Now the owner has told me I need to sign a non-disclosure/non-compete to start getting paid as a 1099 contractor. I've read it and this one says no stealing clients, of course. It also says I can't start my own salon or have an ownership stake in a salon business within 10 miles of her salon. I am a business already and if her business is slow I don't want to limit my ability to make money. I could be ok if she reduced the radius to 5 miles.

A few things about job #2:
1. The owner is currently in a lawsuit with a former contractor who started her own business with the owner's blessing until she heard that contractor was soliciting her clients.
2. The owner let another contractor leave with her blessing to start her own business because that girl had a lot of complaints about poor service and she was trying to figure out how to get rid of her anyway.

One of my friends is warning me that the owner of salon #2 sounds unstable, but the commissions are great and she is very flexible with work hours which is why I'm willing to put up with some of this craziness.

Anyway, I've read that 1099 contractors cannot be held to non-competes like employees. Does that apply in Virginia?

They still apply but there is still a reasonable standard as with employees. As a 1099, you should have a lawyer reviewing your contracts.