Readers Digest version - my wife does baby sitting on the side to help expedite paying off her grad school loan. She was going through a company/service provider that is run by two clueless people. She was constantly getting the run around, late notices of family’s in need who had actually booked elsewhere due to no response from the owners and the likes. She built up her own clientele through her normal job and word of mouth along the way. Finally she had enough of the companies shenanigans and quit.

Fast forward the last couple of weeks and she’s getting the ball rolling on her own company to provide the same service. She has a web site in the works, met with an insurance agent, forming a LLC, got a business license packet and the whole 9 yards to start this up properly. The catch is she signed a non-compete agreement with the other company. She’s meeting with an attorney later this week, but as always I thought I would ask here as well.

My understanding is non-competes vary from state to state and industry to industry. In short, if you possess trade secrets, proprietary knowledge or the likes, they can be enforced. A run of the mill company/job they hold virtually no weight outside of a potentially threatening, but worthless letter from a previous employer’s attorney.

We’re in SC for what it’s worth. Appreciate any thoughts from the legal minds and those staying in a Holiday Inn.

I’m curious to know what the terms of the non-compete agreement are. Is it based on time? Distance? I mean, it can’t be so damn restricting that no one could work in the field again.

Can’t wait to see the answers for this one.

Not a bit. Specifically in SC I worked for a company that would hire folks directly from the competition with the promise that any non-compete suit they'd handle. I recall hearing of one former employer that tried it. Made the judge laugh and nobody bothered to try that again.

Right-to-Work means you have no say over who I work for or when, only when you don't want me working for you.

quote:

Originally posted by Edmond:
I’m curious to know what the terms of the non-compete agreement are. Is it based on time? Distance? I mean, it can’t be so damn restricting that no one could work in the field again.

Can’t wait to see the answers for this one.

Good catch, forgot some info. It’s a 2 year non-compete within a 30 mile radius. We’re virtually dead center of Charleston County here in SC. She has been told to just get a PO Box outside the 30 mile radius as a possible work around should it come down to that, but that has not been confirmed as a viable solution if necessary.

Devil is in the details, but non-compete agreements are generally enforceable if they are reasonable as to duration and geographic reach and protect a legitimate business interest. It also matters if they impose an undue burden on the ability of the employee to earn a living.

I am an attorney, but not in South Carolina and not for the past 18 years or so.

quote:

Originally posted by ChicagoSigMan:
Devil is in the details, but non-compete agreements are generally enforceable if they are reasonable as to duration and geographic reach and protect a legitimate business interest. It also matters if they impose an undue burden on the ability of the employee to earn a living.

I am an attorney, but not in South Carolina and not for the past 18 years or so.

Legitimate business interest, my research shows that preventing competition in a free market will not hold up in this given scenario. I defer to you as I’m clearly not an attorney, but would you agree that preventing competition would be the previous employers only gripe? For what it’s worth, there’s at least a half dozen other companies that provide an identical service in the area. Furthermore, not holding you to an answer as your advice is worth what I’ve paid

Their leverage is that they'll sue you. And you will need to pay for your attorney. Its pretty clear that your wife is going to use former customers as her base. Those customers were considered the property of the former employer. She basically stole them. I would think the former employer would have nothing to stand on if she used her own customers, as in customers that hadn't been with the former employer. A non-compete that precludes her from working in the field was demanded to prevent her from working and stealing away customers.

So yes, see an attorney that is familiar with your state's laws and customs.

Read how you would like, but she isn’t stealing customers. The vast majority of the customers from the previous company were those on vacation to the area, tourist overload here. The few remaining were local, but far from regular customers due to in efficiencies by ownership. She has made a point to not poach prior local customers based on the lack of need to along with avoiding any potential headache. Clear now?

Very state specific as I understand it, non-competes were a contractual issue with my primary vendors, so it popped up as an issue periodically. Judges in VA are loathe to deny individuals the right to earn a living in their chosen profession.

My experience is they are included frequently as a deterrent for those unfamiliar with their likelihood of enforcement.

Not a lawyer (thank the Lord!), but that seems overly restrictive in both geography and time.

I’d not worry about it; it is possible that if it did come to the point where it was attempted to be enforced, the restrictions would be dramatically decreased.

What was she offered in exchange for signing it? Employment?

She must have been offered something of value in order to justify the company imposing this? Many times this is, in fact, employment.

They do when you won't get a severance package nor a year's salary plus stock options unless you sign...

They sure do! (provided it's written correctly)

A non compete agreement...for babysitting?

quote:

Originally posted by Balzé Halzé:
A non compete agreement...for babysitting?

My thoughts as well about the whole thing.

I have no idea about the non compete but kudos to your wife for workingan extra job to pay off the grad school. I see less and less people who are willing to work more to pay off debt.

In Ohio it would be binding. I don’t know about SC. I hate non competes and wish they’d be banned as a matter of public policy. They were intended for a very specific type of employee who had real trade secrets and were highly compensated. Now employers are taking them too far and having everyone sign them in an effort to restrict people from leaving if they aren’t happy. That’s not ok with me. People should be free to support their families anywhere they want.

I never have, nor never will ask an employee to sign a non compete. If I don’t earn their loyalty, shame on me.

Enforceability varies from state to state - in Florida they are enforceable but also limited by statute in terms of geographic scope and temporal duration.

Right to work means you can’t discriminate in hiring based on union status (in every state I am aware of). It has nothing to with and no impact on restrictive covenants.

quote:

Originally posted by esdunbar:
In Ohio it would be binding. I don’t know about SC. I hate non competes and wish they’d be banned as a matter of public policy. They were intended for a very specific type of employee who had real trade secrets and were highly compensated. Now employers are taking them too far and having everyone sign them in an effort to restrict people from leaving if they aren’t happy. That’s not ok with me. People should be free to support their families anywhere they want.

I agree with this. I signed one for my current position and it's not that I'm not privy to juicy aspects of what we do, but its nothing of revelation that most people couldn't figure out on their own or just outright assume. I see how our little dictator uses them to fuck people when they want to leave on their terms and very seldom does he let people out of them. It creates the shitty type of morale you'd assume from such a situation.

I'll ask to be let out of mine knowing full well I could circumvent it quite easily if necessary. He doesn't know that, but I may let him know if I want to piss in his Cheerios when the day comes.

We just lost a VP of sales and he had a hell of a hard time finding a new gig as the NCA scared off a lot of potential employers. He moved outside of our commodity but still within our industry so he didn't need to completely start over.

I'm also in the category of people who are thinking, "babysitting"?

I am not an attorney, but I had to take business law in college (1995) and we discussed this topic, only as it relates to Colorado. The lawyer/professor who taught the class said in Colorado they are basically unenforceable. He said that a judge would consider who is better able to handle the loss of income. Generally speaking, the former employer is able to handle losing some customers, but it amounts to the employee being unable to earn a living.

He told us if you are offered a job and they insist on signing one, sign it, it will not be enforced in court. Obviously hire an attorney in SC and get their opinion.

Their shit don't mean shit.