Non-Compete Agreements: For or Against?
There was a hot topic on the Interiorscape Facebook group that reminded me of my own experience with non-compete agreements. The comments were incredibly charged and rightly so. When you’ve worked hard to build your business, the thought of an employee who you trained and trusted leaving to work for the competition or start their own interiorscape business can be a devastating betrayal. On the flip side, is it fair to not allow someone to be in a field that has been their main source of income?
The Non-Compete Clause
Having a non-compete clause in employee contracts is one way to protect your company from former staff working for your competition, revealing inside information, or starting their own interiorscape business by soliciting your clients. The standard length of time for non-compete clauses is six months to two years. Any owner can make it for as long as they feel is right, but most courts will only recognize a year and some states such as Florida may not even recognize it as valid.
A non-compete clause should also include a geographical location limited to where you conduct business. It won’t hold up in court if you include other areas such as different states in which your business doesn’t have any clientele. Every jurisdiction is unique. I’m not an attorney, so getting the advice of one is the best protection. This is just my personal experience dealing with this legal matter. Any owner who decides to pursue an ex-employee for breach of contract, going to court and winning is never absolute. And then, you have to justify if it’s worth the cost of attorney fees, legal expenses, and the emotional drain of dealing with a court case.
Put Your Employees First
Employees who enjoy their job and feel respected and appreciated are less likely to leave for a competitor or start their own company. I don’t like having new hires sign a non-compete agreement, because it automatically sets a negative tone that I don’t trust them. It instills fear for someone that has devoted their career in the horticulture industry. It’s like a red flag that says, “We have high employee turn-over here so you better not go to the competition like others have done, otherwise, the owner will prosecute and make your life miserable.”
To me, there’s better protection than having new hires sign a non-compete agreement. Caring for employees and treating them fairly is a realistic commitment. Just like the saying, “happy wife, happy life,” if you have happy employees, they will work diligently and be faithful to the company.
Secondly, it’s important to provide your clients high-quality service, showing your appreciation for their business, and making sure you keep in contact regularly. It’s when service becomes unsatisfactory, customer service becomes neglectful, and communication ignored, you leave yourself open for business betrayal and contracts to go out for bid. I’ve learned a couple of things: 1. Satisfied clients aren’t tempted to follow a former staff member to a new company, and 2. Most satisfied clients will simply say ‘no’ to attempts to steal them away.
By putting your employees first and treating them right, there isn’t a need for a non-compete agreement.
Unfortunately, there are people whose true intent is to use your company to learn the secrets of your trade, steal clients, and create their own interiorscape business. One way to help prevent this betrayal is to have a very thorough vetting process. Such as, during the interview, ask what their aspirations are and then pose that same question differently a couple of times more. If you find their answer is inconsistent, that’s a good sign they aren’t being sincere and may have ulterior motives.
Job history will also give you good insight as to the type of employee they are. Some may come straight out and say their goal is to be their own boss. No matter how big the layer of protection a business owner uses, there is always a risk of being harmed by former employees. If I treat my customers and staff right, I have to hope karma is on my side.
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