I looked into this a while ago in AZ, so YMMV. But the places that make you sign an NCA as a condition of employment generally don't have much leg to stand on. You're signing under duress. If they later offer you some kind of bonus, raise or other compensation to sign, then you're in a different situation.

The most sue-happy, d'bag former employer I had made everyone sign an NCA on day one and wouldn't give copies to anyone. (And many were afraid to ask for a copy later on.) But he also never went after anyone who left to work for a competitor, likely because he knew he had no shot and just wanted to intimidate those who weren't the wiser.

Disclaimer - Not providing any legal advice just my thoughts ...

Is she an independent contractor or employee? (1099 vs W-2)

Is she just renting the chair?

Did she bring in a book of clients when she started?

2 years seems way overly aggressive. The courts look to see if the person can still earn a living.

10 miles may be also. Is it rural than maybe ok? Is it NYC probably not.

All this goes into the tests whether or not the contract is enforceable.

In the last year courts have turned against non competes. Such as Jimmy John's and their sandwich makers.

She may want to chat again with a local labor attorney.

quote:

Originally posted by Jamess1:
She may want to chat again with a local labor attorney.

I am not a lawyer, but I was forced to sign a non-compete agreement about a year into my employment with my previous employer (about 20 some years ago). Shortly after that the SHTF (not with me directly, but losing my job was part of the fallout) - there were multiple lawyers involved. At that time my lawyer said non-compete clauses, especially those that didn't come with some additional compensation, were not enforceable.

Her circumstances may be different, but I'd recommend another chat with a lawyer. I can recommend one in the Mpls area if needed. On the other hand, if she's got a good clientele base, 10-20 miles away probably won't be too far either.

I am certainly not a lawyer, but this topic came up when I took Business Law in college. Of course these laws are also state specific. I went to college in Colorado. Our lawyer professor told us non-competes were not generally enforceable (1995 time frame). He said that the courts look to see if it places a hardship on the signors ability to earn a living. He said a business is generally better able to take the loss/financial hit than the employee.

I would find another attorney in her area and get a second opinion.

I think the goal here is to avoid legal action, not get into it and then win it. If the hair salon owners are litigious, difficult and have deep pockets, that's a problem for the former employee, unless she gets a lawyer who will work on a contingency fee and is sure she'll win a settlement. I've seen a few former employers go so far as to send C&D threat letters, but nothing farther than that.

Follow up question and comments -

We are going to talk with a lawyer. One of the questions we are going to ask is if a proven record of:

- Hostile work environment (oh the stories I could tell about her treatment from the owner and the manager)

- Changes of terms of the job (they paid for insurance when she started, but now they only pay 50% of insurance )

Could negate a non-compete contract?

quote:

Originally posted by calugo:

quote:

Originally posted by Powers77:
Just curious, how long does the non compete last?
I'm kind of surprised a lawyer said it would even hold up. Have always heard the more restrictive the less enforceable they would be.

I thought a court ruled a few years ago that non compete clauses were unenforceable. If she's serious about leaving her current employer it might be worth to consult an attorney. With that said if the non compete is enforceable 10 miles isn't a great distance to commute unless the majority of your clients walk or depend on public transportation.

One tactic is for the old employer to sue her new employer for interfering with her contract with them.

So while they may or may not go after her, they may use this to enforce the agreement by scaring off the other shop.

Get another opinion on the agreement, you don't want to get into a legal battle, be sure you understand it's limits and your rights as of today. Be sure its someone that specializes in these agreements.

Agree, most women will follow their hairdresser for miles, she needs a social media presence where her customers can read up on her activities and know where she ends up, sort of advertising with out direct solicitation.

If she has some idea where her best clients live, look in that direction for a new location. Chart that out if possible.
Unless they live next door to her present employer, they have to drive some distance to get to her now. Move in a direction that lessens the commuting distance for them as much as possible.
That way the 10 miles may not mean that much.

quote:

Originally posted by 220-9er:
If she has some idea where her best clients live, look in that direction for a new location. Chart that out if possible.
Unless they live next door to her present employer, they have to drive some distance to get to her now. Move in a direction that lessens the commuting distance for them as much as possible.
That way the 10 miles may not mean that much.

I was just going to say that.
A friend of mine who is a pediatrician had a NCA and he just plotted the location of the majority of his clients and opened up shop near them. It turned out to be very successful.

I live in AZ and know each state is different but several years ago i took a non compete to an atty for review and was told that for it to be enforceable it must be very specific as to where and how long.

The example given to me was you cannot say "cannot work in the XXX industry for 5 years" but instead would need to read "cannot for for bob, Pete and Jim for a period of 5 years".

The other side to it is, given the current economic climate I am not sure there is a judge that would prevent someone from making a living?

quote:

Originally posted by calugo:

quote:

Originally posted by Powers77:
Just curious, how long does the non compete last?
I'm kind of surprised a lawyer said it would even hold up. Have always heard the more restrictive the less enforceable they would be.

I thought a court ruled a few years ago that non compete clauses were unenforceable. If she's serious about leaving her current employer it might be worth to consult an attorney. With that said if the non compete is enforceable 10 miles isn't a great distance to commute unless the majority of your clients walk or depend on public transportation.

This is dependent on state law, and the several states have VERY different rules on non-competes. You cannot know anything about what your state does from knowing the rules from another state.

My understanding is California permits very few non-competes. But I could be wrong.

I know about Texas non-competes. They can be valid, but are subject to limits. Non-competes contained in proper employment contract are enforceable in a wider variety of situations.

Over the last 20 to 30 years, the general trend is to expand the enforceablity of non-competes. Texas has certainly followed that trend.

You have to consult your state's law. Not your invisible internet non-lawyer friends. While I don't know much about non-competes outside of Texas, there is a lot in this thread that just doesn't sound right to me - laymen often get this stuff wrong or only half right. But I don't really know.

I've been in IT for my entire career. A consulting firm I worked for made us sign non-competes. The firm took ten consultants that quit and went to work for a competitor to court and lost all ten cases. A non-compete is very difficult to enforce.

quote:

Originally posted by Bytes:
I've been in IT for my entire career. A consulting firm I worked for made us sign non-competes. The firm took ten consultants that quit and went to work for a competitor to court and lost all ten cases. A non-compete is very difficult to enforce.

Difficult in your state, and under those facts and circumstances, and as that non-compete was worded.

Others would be a slam-dunk for enforcement.

You just can't make blanket statements like that.

I believe that jhe888 is spot on that the employer would have a very hard time with that noncompete in CA. (Duh. Legal question, jhe888 spot on? Go figure.)

I’ll suggest starting with a different question: Does she want to fight with these folks, or does she just want to get on with her life in the most expeditious manner?

She can probably* beat them in court on the non-compete, maybe even sue them for something else obnoxious that they are doing and maybe even win something. However, going to court is a crapshoot, even when the facts are in your favor, and it is rarely cheap. (Possibly the only thing worse than a cheap lawyer is a cheap doctor.). It is very possible that she could win on the non-compete and be allowed to work wherever she wants, but at great cost in time and money and with no other recovery.

Seems like there are three basic approaches:

1) Find the best place outside the ten mile non-compete area, setup shop there, and don’t look back. 220-9er and smisig have great ideas along this line.

2) Find the best place with no consideration to the ten mile non-compete area, setup shop there and go to work. Recognize that the old shop may come after you if you’re inside ten miles, but try not to lose any sleep over it and cross that bridge if it shows up.

3) Go to war (legally) with the current shop. Sue them for everything under the sun and try to get the non-compete ruled invalid before even starting out.

Personally, I’m not sure whether I’d choose 1 or 2 (don’t know the full circumstances), though I’d lean toward 1. The only one that seems like a non-starter to me is option 3. For me at least, life is too damned short to spend it looking back. I prefer to focus my energies looking forward.

YMMV...

ETA: *This is absolutely not legal advice. IANAL (though I have employed a few. The best one likes to say, “Do you want to talk about what is right, or what we can reasonably expect to get done? The meter runs the same either way. )

If your friend is leaning toward option 2 or 3, please implore her to hire (local) counsel and get good legal advice.

I think Slosig has it right.

If a lawyer tells your friend that her non-compete is unenforceable, what she would do is ignore it, and take whatever job she wants. I wouldn't advise a client in the situation to sue for a declaratory judgment that the non-compete is invalid. And you won't have a claim, generally speaking, if they asked you to sign an unenforceable non-compete. IF it is unenforceable, just do what you want. Be aware they may sue you, though. Although if it is that clearly unenforceable, their lawyer will tell them that, and they may desist.

I've seen a fair number of non-competes that were unenforceable (sometimes because they adopted a form from another jurisdiction and sometimes because a business tried to draft it on their own without legal help), and a not uncommon outcome is that, when push comes to shove, they drop the matter, knowing they don't have a leg to stand on. Perhaps they were just trying to bluff.

I'm not saying this non-compete is unenforceable, you have to confirm that first.