What do you know about Non-Competes??

mk42 · Jul 3, 2019

Timeismoney08 said:
I'm in Georgia

Non-compete laws vary a lot state to state. I am not a lawyer, but I google pretty well:

First, for a non-compete agreement to be valid in Georgia, the contract must contain consideration, which is something of value. If you want one of your current employees to sign one of these agreements, you need to provide them something of value in exchange. The consideration of your agreements is left to your discretion and can change from agreement to agreement.

https://www.upcounsel.com/are-non-compete-agreements-enforceable-in-georgia

Specifically, the court explained that under the RCA a former employer cannot enforce an agreement that restricts competition by any employee who did not, in the course of his or her employment with the former employer:

Customarily and regularly solicit for the employer customers or prospective customers;

Customarily and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others;

Perform the following duties:

Have a primary duty of managing the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;

Customarily and regularly direct the work of two or more other employees; and

Have the authority to hire or fire other employees or have particular weight given to suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or

4. Perform the duties of a key employee or of a professional.

https://www.fordharrison.com/non-co...nterprets-who-can-be-subject-to-a-non-compete

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Georgia state law generally supports these documents, as long as they meet the following three requirements:

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Consideration . In order to be valid, these agreements must be supported by consideration. Consideration is a legal term used to denote that the employee received something of value in return for his or her agreement to abide by the contract. This can take the form of the employment opportunity itself or a raise in salary. However, a promise of continued employment is generally not sufficient. As a result, employers must tread carefully when updating these agreements for current employees.

Business interest . The provision must be structured to protect an actual business interest. Examples include trade secrets and proprietary information.

Reasonable . The agreement must be reasonable in the amount of time and geographic area it covers, as well as the scope of activities.

http://www.mcdr-law.com/Articles/Non-compete-agreements-in-Georgia-Three-requirements.shtml

Vlad Romanov · Jul 3, 2019

Tom Jenkins said:
A company is within its rights to make signing a non-compete agreement a condition of employment. Many non-compete agreements are unenforceable because they are too broad.

A non-compete can prevent you from starting a business in direct competition with the employer, but there must be a reasonable time limit and geographic area. It can keep you from using customer lists and proprietary technology obtained from the company, but it can't keep you from using publicly known info. (For example, everybody knows GM uses PLCs.)

It can't keep you from earning a living with your expertise. If you are a programmer, you can get a job with another integrator as long as you don't reveal the other guy's trade secrets (assuming he had any!).

Abusive and unenforceable non-compte agreements are common. There is a law firm in my city that advertises its main business is to help you "beat your non-compete"! I did a search on "limitations of non-compete agreements" and got a great deal of info. I suggest you do that. (Most of us on this forum don't even play an attorney on TV.)

This is very accurate. I'm no lawyer but spoke to one who said exactly the same thing.

Many businesses will try and intimidate employees from competing, but the contracts they put out are simply unenforceable in the court of law.

All that being said, the most basic of rules of thumb is not to take any of their existing customers. At that point, you're definitely doing something wrong.

Again, this is just what I heard; consult a lawyer.

James Mcquade · Jul 3, 2019

KEEP the letter you are talking about !!
if they call you on it, you can use the letter to show that they breached their part of the contract.

also, a non compete letter must be brought up before employment, not after the fact. I had that happen, sign by the end of the day or get fired.
I signed it, but in court it is considered as signing under duress.

also keep the non compete letter if you have a copy.
keep your first check stub also.

james

Timeismoney08 · Jul 3, 2019

Wow, so much great information. Thank you everyone!

dogleg43 · Jul 3, 2019

Keep track of other employees who quit and where their next job is. In most states a company cannot selectively choose to enforce the non-compete clause.

Ken Roach · Jul 3, 2019

mk42's summary is excellent.

Georgia provides fewer statutory and precedent protections for employees than many other states, but their approach toward Covenants Not to Compete is fairly standard.

The question of "is continued employment sufficient consideration" is very important. The distinction might come down to whether or not TIM08 had already been hired earlier in the day than when they CNC was presented to him.

I think it's actually a good argument for the enforceability of the CNC that it was presented at the start of employment.

A short period of employment tends to argue against the enforceability of a CNC; unless TIM08 was given a big old packet of Trade Secrets right away, it's a good argument that he did not do enough professional services for his employer to develop a protectable business interest.

janner_10 · Jul 3, 2019

Interesting discussion. Whilst I know the states is a different kettle of fish and whilst I have never been asked to sign one.

Recent case in the UK: http://www.mondaq.com/uk/x/631982/e...unals/When+Is+A+NonCompete+Clause+Enforceable

They (employer) basically got told to piddle off.

Decent FAQ for the UK chaps:
https://www.ms-solicitors.co.uk/emp...de-to-post-termination-restrictive-covenants/

Can't say what I would do in the OP situation, at the end of the day, I've got to pay the mortgage and put food on the table.

diat150 · Jul 3, 2019

I definitely wouldnt sign it, and havent made any of my employees sign one up to now.

regardless, it all boils down to if you do sign it, will you or the company that hires you foot the legal bill of civil litigation attorneys that will be charging 3-500 dollars an hour.

Gene Bond · Jul 3, 2019

An interesting question is:

What about the customers YOU BROUGHT to the company? Are they now the company's customers, or still your's?

As mentioned above, in the end it all boils down to who has the best lawyers, and who is willing to fight (and pay) the hardest...

alive15 · Jul 3, 2019

Why can't you take their customers? If you know you can have better pricing, then why not? Isn't this how businesses work, they see other companies pricing, and then adjust theirs accordingly? I wouldn't even call it stealing customers, but rather, just providing a better option? I don't own or run a business, but interesting to read about this non-compete idea.

alive15 · Jul 3, 2019

I used to work at a hotel, and the manager would literally drive to other hotels and see like another company's van, get the phone # off the van, and then call them up and say "Hey, my hotel offers you bigger rooms at cheaper rates, and we are right next door, would you like to save money and transfer over here?". He filled up a lot of his rooms like this.

diat150 · Jul 3, 2019

alive15 said:
I used to work at a hotel, and the manager would literally drive to other hotels and see like another company's van, get the phone # off the van, and then call them up and say "Hey, my hotel offers you bigger rooms at cheaper rates, and we are right next door, would you like to save money and transfer over here?". He filled up a lot of his rooms like this.

yeah alot of it is subjective, but in that case, it is public knowledge that the companys van was at the other hotel. now had his sister who worked at the competing hotel provided him a list of customers and the special pricing that they were getting, it is a different story.

alive15 · Jul 3, 2019

diat150 said:
yeah alot of it is subjective, but in that case, it is public knowledge that the companys van was at the other hotel. now had his sister who worked at the competing hotel provided him a list of customers and the special pricing that they were getting, it is a different story.

Ah, I understand now, that makes more sense.

alive15 · Jul 3, 2019

Even at my current work, I was told I was not allowed to show one quote from one company to a different company in order to bring the price down. But I figured both company's could pretend to be customers and get quotes from each other to figure out how much to charge their own product for.

But then, if only two company's existed that sold a particular product, they can collude also and both keep their prices high, but very similar?

mk42 · Jul 3, 2019

alive15 said:
Even at my current work, I was told I was not allowed to show one quote from one company to a different company in order to bring the price down. But I figured both company's could pretend to be customers and get quotes from each other to figure out how much to charge their own product for.

But then, if only two company's existed that sold a particular product, they can collude also and both keep their prices high, but very similar?

Most competing companies probably know each other's list price, just like Grocery Store A could walk into Grocery Store B, and see how much they charge for Milk.

What they might not know is the discounted price given to good/high volume customers. That info is usually considered proprietary, although, I'm pretty sure that gets thrown out the window in practice.

What do you know about Non-Competes??

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