Brother hit with Non-Compete form... UPDATE: Unemployment Blocked (1 Viewer)

[bigbottom]

I read the OP but none of the responses.  I have been through this and quit Goldman Sachs because they were trying to get me to sign a non compete.  I spend a lot of time and money figuring out this stuff.  Essentially, the most important factor is the state.  Some states enforce them and some don't.  If he's in one that doesn't enforce them, have your brother sign it and not worry about it.  If the state does enforce it, all is not lost.  If he signs it and then moves to a competitor, it's up his former employer to file an injunction with a court and the outcome almost certainly depends on the judge.  Some will enforce it and others won't deny your brother the opportunity to make a living.

HTH

Non-competes can be enforced in Florida as a general matter. Whether they will enforce this particular non-compete (assuming he signs) and the extent to which they will do so in terms of temporal limitation, geographic area, and scope of activity to be restrained depends on the facts and circumstances of the case (and, as you note, the inclination of the judge).

 

[glvsav37]

apparently deadline was today 

when prompted if he will have Job tomorrow, his boss said he would get an email tonight. 

For fear of not being able to get into the office tomorrow, he packed up his personal belongings, made sure The bosses wife went through the box so he wouldn't be accused of stealing anything, and took them home.

if he does not receive an email today, he plans to go into work like normal tomorrow. 

I am strongly advising him to talk to an employment lawyer  to go over the contract, then likely sign it knowing full well it will be of limited enforceability. 

 Reportedly one person has already left and is being sued… But apparently that person stole a bunch of client information and was using it to contact clients… I explained that clearly being a ####### moron is going to get you sued, but that doesn't apply to him unless he's a ####### moron too. 




3

What a ##### pickle. IDK your brother's financial situation, but I would have done the same. F this guy and his NC deadlines. Seems like he is testing guys. Jabrony Managment 101. In any case, I'd have your brother firing off resumes ASAP. This place cant stay stable. 

 

[The Big Guy]

Nothing constructive to add other than wishing best for your brother. Sounds like they are willing to walk some employees over this, especially if they see him packing up his stuff and say nothing other than asking to look thru the box.

 

[gianmarco]

Thanks @bigbottom

update: 

apparently deadline was today 

when prompted if he will have Job tomorrow, his boss said he would get an email tonight. 

For fear of not being able to get into the office tomorrow, he packed up his personal belongings, made sure The bosses wife went through the box so he wouldn't be accused of stealing anything, and took them home.

if he does not receive an email today, he plans to go into work like normal tomorrow. 

I am strongly advising him to talk to an employment lawyer  to go over the contract, then likely sign it knowing full well it will be of limited enforceability. 

 Reportedly one person has already left and is being sued… But apparently that person stole a bunch of client information and was using it to contact clients… I explained that clearly being a ####### moron is going to get you sued, but that doesn't apply to him unless he's a ####### moron too. 

The deadline was yesterday?  Why on earth did you wait so long to start this thread?  This is on you, buddy.

 

[[icon]]

The deadline was yesterday?  Why on earth did you wait so long to start this thread?  This is on you, buddy.

I started the thread shortly after I got the call from my pop yesterday. Apparently my brother went rogue on this one and didn't tell anyone until yesterday. Might end up costing him big. 

Big more detail came out.. this "everyone signs a NC" was bought on by a sales girl leaving and taking a bunch of business with her. Boss consulted attorney and he advised the NC form. 

Still waiting to hear if the email came through or if he's at work. He's apparently ashamed and doesn't want anyone to know so I'm getting all info secondhand from pop. 

 

[[icon]]

Nothing constructive to add other than wishing best for your brother. Sounds like they are willing to walk some employees over this, especially if they see him packing up his stuff and say nothing other than asking to look thru the box.

In the interest of brevity I didn't relay every detail of the day, but he fought pretty hard over this... it wasn't as simple as "Fine, F you, (packs stuff and walks out)"

He's going to leave the company now, i'm just trying to get him to do it on his own terms once he's had time to secure other employment. My father is in "F them" cowboy mode telling him to just take the firing and collect UI while getting work. The problem is brother has extended himself a bit (big house, 2 kids, etc) and trying to live of UI while job hunting might limit his flexibility to wait for the right position. I think he'd be much better off continuing to work there while job hunting. then leaving on his own terms once he's found something (and has been told by an employment lawyer that he's outside the likely bite of his NC clause. 

 

 

[Godsbrother]

In the interest of brevity I didn't relay every detail of the day, but he fought pretty hard over this... it wasn't as simple as "Fine, F you, (packs stuff and walks out)"

He's going to leave the company now, i'm just trying to get him to do it on his own terms once he's had time to secure other employment. My father is in "F them" cowboy mode telling him to just take the firing and collect UI while getting work. The problem is brother has extended himself a bit (big house, 2 kids, etc) and trying to live of UI while job hunting might limit his flexibility to wait for the right position. I think he'd be much better off continuing to work there while job hunting. then leaving on his own terms once he's found something (and has been told by an employment lawyer that he's outside the likely bite of his NC clause. 

 

It is always better to be working in the industry of your expertise when looking for a job rather than being on UI.

 

[bigbottom]

If I knew I was leaving regardless, no way would I sign the non-compete. I don't know what being "outside the bite of his non-compete clause" means, but assuming the lawyer is suggesting that the non-compete is unenforceable under these circumstances, there still is little question that the likelihood of getting sued increases if he signs. And if he gets sued, the only one who gets paid if your brother wins is the lawyer. 

 

[[icon]]

Just got verdict: He told the owner he'd like him to rework the NC to be more equitable and he can't sign it as is. Assuming this will lead to him being canned. Will see how it goes. 

 

[Jayrod]

I worked for a guy who owned a landscaping company and pushed to get all of his employees to sign an NC agreement.

One of his laborers refused and they got in an argument over it.  The laborer got mad and was storming off as my boss followed him saying, "by leaving you are quitting!"  That was so that he wouldn't file for unemployment (guy was crazy cheap and watched every penny).

Then afterward when the owner was talking to me about the gist of their argument, he said, "He refused to sign the non-compete agreement, so I guess he wanted to compete."  I think some business owners get this mentality of you are either for me or you are against me.  Refusing to sign a NC raises a red flag to them that you aren't loyal and could potentially do something to harm them down the road.

 

[WampusCat43]

FWIW, I got served a C&D order (from a Texas company) about 20 years ago, and contacted a lawyer about it.  The conversation was pretty brief:

"How many employees does this place have?"

"About 75."

"Forget it.  It's not worth their legal costs to pursue the case."

He was right.

 

[Doug B]

 Reportedly one person has already left and is being sued… But apparently that person stole a bunch of client information and was using it to contact clients… I explained that clearly being a ####### moron is going to get you sued, but that doesn't apply to him unless he's a ####### moron too. 

[icon], not sure how much you know here, but: is there any issue at all with intellectual property here? Or is you brother's boss only/chiefly concerned about taking clients away?

Reason I ask is that I worked in your brother's field throughout the 1990s, and never heard of a no-compete clause. Might not have been high enough up the food chain to have run across one, though I did a lot of design work for print/silk screening/etc.

 

[[icon]]

[icon], not sure how much you know here, but: is there any issue at all with intellectual property here? Or is you brother's boss only/chiefly concerned about taking clients away?

Reason I ask is that I worked in your brother's field throughout the 1990s, and never heard of a no-compete clause. Might not have been high enough up the food chain to have run across one, though I did a lot of design work for print/silk screening/etc.

It wasn't intellectual property. She was a saleswoman and apparently stole a couple decent sized clients as she quit. 

 

[skillz]

It is all state law specific.  The noncompete can be valid if it is reasonable in time, duration and geographic scope.  In some jurisdictions, courts can blue pencil (i.e. modify) instead of invalidate the noncompete if the employer seeks to enforce its terms and the court finds the employer overreached.  Also in some jurisdictions  continued at-will employment can be sufficient consideration to enforce a noncompete for an existing employee, but most employers give something of nominal value to ensure there is consideration for the noncompete.  Bottom line is the employer may be able to require him to sign the noncompete (it all depends on what the consideration is) and the enforceability of the noncompete if the relationship ends is based on its reasonableness (the time, duration, and scope). 

 

[James Daulton]

It's hard to believe that in this country you can be fired simply for not signing a document.  Particularly when there is no specific intellectual property or training the company provided.  Employers really do have the upper hand in most situations it seems.  I'm not sure if that's good or bad in most cases though.   

 

[guru_007]

So, your brother has been there for 10 years, is in good standing, presumably likes his job and does well there.

Is asked to sign a non-compete agreement, and now has decided to risk his livelihood by not signing it?  Seems a bit extreme to me as he was not intending on leaving beforehand.

I get it.  About 15 years ago I asked for and was given a rather large promotion and pay raise at my job at the time.  The owner of the company drafted up a non-compete for me to sign before giving me the position and pay rate.  I was mad  at the time, but slept on it, had an attorney look it over.  Basically I was told this was fairly standard as I was climbing up the corporate ladder and I should just ask for a geographic limit placed on it, which I did and they added it and I signed.  

As an employee I took it as my bosses not trusting me.  But at the end of the day, they were just covering their asses too.  And realistically what were they going to get if they sued me?  Unless I did something malicious or stole trade secrets, etc... which I wouldn't have really done anyway.

I actually did end up leaving that position in less than a year for greener pastures, but left on good terms, the NCA was a total non-issue.

I'm definitely not a lawyer, I just don't think the boss here is going to go out of his way to sue every ex employee that signs this and tries to prevent them from getting a job elsewhere.  Would become too expensive, and probably will get no satisfaction out of the verdict.  

Boss was obviously burned up by a sales person stealing clients, wouldn't you be if you were in his position?  Maybe acting after the fact was a bit tactless, but I was working there and saw business being pried away from the company I worked at, it would burn me up a bit too.  This is his livelihood, no?

Of course, if he was already looking to move on, this is all moot - just not the way I read the post.

 

[RUSF18]

A lot of what you just wrote was based on your own experience with a NC after being given a promotion. I think if OP's brother was asked to sign one as a condition for receiving a new job/higher salary, just like you did, he may have had a very different reaction. Most people would. 

 

[Christo]

It's hard to believe that in this country you can be fired simply for not signing a document.  Particularly when there is no specific intellectual property or training the company provided.  Employers really do have the upper hand in most situations it seems.  I'm not sure if that's good or bad in most cases though.   

Why is it hard to believe? Seems to me at-will is a very American thing.

 

[Christo]

A lot of what you just wrote was based on your own experience with a NC after being given a promotion. I think if OP's brother was asked to sign one as a condition for receiving a new job/higher salary, just like you did, he may have had a very different reaction. Most people would. 

We don't know the reason for this in icon's situation. There was a change in ownership from Dad to Son. For all we know, Dad was a handshake is as good as your word guy. But when Son took over he had a talk with Dad's lawyer and was told he was always trying to get Dad to get employees to sign a NC, so Son decided to take his advice. 

 

[CletiusMaximus]

What kind of trade secrets in trimming mulberry bushes did he need to protect here?

Trade secrets are protected by law in most states, whether or not in a contract. Non-compete / non-solicitation agreements prohibit employees from working for competing businesses, taking clients, taking co-workers. A successful landscaping business would likely benefit from employee non-compete agreements.

 

[BigSteelThrill]

I would absolutely turn this into a (negotiation and) subsequent raise.  Good luck.

 

[bigbottom]

Trade secrets are protected by law in most states, whether or not in a contract. Non-compete / non-solicitation agreements prohibit employees from working for competing businesses, taking clients, taking co-workers. A successful landscaping business would likely benefit from employee non-compete agreements.

In a number of jurisdictions, noncompetes are enforceable only to the extent they are designed to protect the employer's confidential and proprietary information. 

 

[Johnny Rock]

Unless the son has lost his marbles, I don't see him firing a good 10-year emp like your brother unless he's trimming staff anyway. It will cost the son more to replace him than the risk of keeping him. Now in order to save face the son will probably negotiate on the language and your brother stays on.

Doesn't change the fact that if the son is a db your brother should look for other work.

 

[The Z Machine]

In California, non-competes are generally unenforceable unless there's serious ownership $$ at stake. In Maryland, they are very much enforceable and made me think twice about where I was applying for jobs.

In short, it very much depends on the state.

Also, I never had to do a piss test in California, but I've had to do 2 in Maryland.  Also dumb.

 

[fantasycurse42]

Rarely enforced, each state varies, I wouldn't worry about it.

Hypothetically he gets a job with a competitor, it costs his current employer money to go try and enforce it. Unless he is a senior executive at a public company, it isn't worth it.

 

[bigbottom]

Rarely enforced, each state varies, I wouldn't worry about it.

Hypothetically he gets a job with a competitor, it costs his current employer money to go try and enforce it. Unless he is a senior executive at a public company, it isn't worth it.

I've litigated many of these over the years. Not one of them involved a senior executive at a public company. 

 

[fantasycurse42]

I've litigated many of these over the years. Not one of them was a senior executive at a public company. 

I don't get that at all, why would a company pay to litigate over Joe Schmoe?

I know a lot of people who have blatantly ignored these things with zero repercussions. 

 

[bigbottom]

I don't get that at all, why would a company pay to litigate over Joe Schmoe?

I know a lot of people who have blatantly ignored these things with zero repercussions. 

Because Joe Schmoe can cause a lot more damage than the cost of a lawsuit. This is particularly the case when Joe Schmoe is your top sales guy. 

 

[[icon]]

Well it's over... I'll keep it short and elaborate if desired:

- of the 4 creative staff (my bro was head), 1 walked out of initial meetign, 2 walked on deadline day... none will have UI claims 

- DB (owner aka son) kept playing games with verbiage "you are walking out" and brother kept saying he was showing up until he got termination paperwork. 

- DB actually handed him letter of resignation trying to trick him into signing it as termination papers.

- Brother called him on the games saying he's not trying to sue for wrongful term, just wants to be able to claim UI to protect his family while he looks for new job. DB said he won't be getting UI according to his attorney and will fight the claim. 

- DB then told bro to leave the shop. Bro wouldn't without termination paperwork. DB threatened to call cops... they eventually showed and brother asked them if they were instructed to escort him off premises. Yes. Okay that's all I needed.

- Bro Has the video and police calls and has since talked to a labor lawyer who says no judge will deny his claim.... but other guys are screwed. 

- DB now has a design shop with zero creative staff, a huge backlog of work and a growing number of pissed off clients due to deadlines missing (smallish town and bro knows many clients personally and they're texting/calling asking wtf is up).

- Soooo... small victories, DB seems to have at least temporarily crash landed his biz in spite of himself. Surely will lose several clients over missed deadlines while he rebuilds/retrains staff. 

 

[Van Dyman]

Well it's over... I'll keep it short and elaborate if desired:

- of the 4 creative staff (my bro was head), 1 walked out of initial meetign, 2 walked on deadline day... none will have UI claims 

- DB (owner aka son) kept playing games with verbiage "you are walking out" and brother kept saying he was showing up until he got termination paperwork. 

- DB actually handed him letter of resignation trying to trick him into signing it as termination papers.

- Brother called him on the games saying he's not trying to sue for wrongful term, just wants to be able to claim UI to protect his family while he looks for new job. DB said he won't be getting UI according to his attorney and will fight the claim. 

- DB then told bro to leave the shop. Bro wouldn't without termination paperwork. DB threatened to call cops... they eventually showed and brother asked them if they were instructed to escort him off premises. Yes. Okay that's all I needed.

- Bro Has the video and police calls and has since talked to a labor lawyer who says no judge will deny his claim.... but other guys are screwed. 

- DB now has a design shop with zero creative staff, a huge backlog of work and a growing number of pissed off clients due to deadlines missing (smallish town and bro knows many clients personally and they're texting/calling asking wtf is up).

- Soooo... small victories, DB seems to have at least temporarily crash landed his biz in spite of himself. Surely will lose several clients over missed deadlines while he rebuilds/retrains staff. 

Crappy situation.  Hope your bro gets the UI or new work quickly.

 

[Henry Ford]

Crappy situation.  Hope your bro gets the UI or new work quickly.

Or opens his own shop immediately.  

 

[jon_mx]

Unemployment rules are strange.  They all were forced from their jobs.  Good luck to all the guys in being successful. 

 

[Aerial Assault]

Meh, I was going to stay out of posting in the thread and just read (some good responses for sure so far), but what the hey . . . . 

Not a Florida practitioner, but have litigated maybe 30 or 40 of these on both sides, and used to be an executive for a company and several subs that had them in place before I arrived and considered using them during my time there.

First, I doubt any of the three other creative staff who "walked out" will have any difficulty with UE compensation claims.  That's probably going to be deemed to be constructive termination under coerced circumstances, not voluntary job abandonment.  I am very confident that would be the result in three of the states in which I'm admitted for sure and relatively confident about the same outcome in the others.  Best of luck to them.

Second, my personal views are and always have been, since I started practicing employment law almost two decades ago, that noncompetes are - with some important exceptions - for crappy businesses that don't have sufficient confidence in their ability to retain their clients on their own organizational merits.  My last noncompete litigation, within the past year, involved defending a client who was sued by a huge corporation (owned by one of the company's largest investment firms) for allegedly violating an employment agreement with all of the typical restraint-of-trade clauses.  We counterclaimed, engineered a walkaway with no money changing hands and a silly settlement agreement that didn't really encumber my guy/gal any more than s/he had been encumbered before, and I would guess that the "big firm" hired by the other side spent at least $150K to $175K on legals, a total waste. 

Unless the EE in question is a top sales producer, someone with serious confidential and proprietary information (more IP-related than something as simple as a client list) in an industry involving complex mechanical, theoretical or technical matter, or a C-level executive or very close, such suits are almost never worth bringing, even for the supposed deterrence value they confer.  That does not mean, however, that companies won't bring them anyway, and it doesn't mean that courts won't uphold noncompetes.  However, most well-advised companies with a certain level of sophistication will not bother with such nonsense except in the cases of employees like those I described.  As well they should not.   

 

[Leeroy Jenkins]

Not sure about Florida, but typically for this to be enforceable, in addition to the reasonable scope and length conditions, it must also be accompanied by some sort of consideration. When starting a new job, that is simple; it is the job offer. But in the midst of employment you might need a raise, promotion, or some other form of consideration to make it an enforceable contract. 

 

[Mr. Ected]

Well it's over... I'll keep it short and elaborate if desired:

- of the 4 creative staff (my bro was head), 1 walked out of initial meetign, 2 walked on deadline day... none will have UI claims 

- DB (owner aka son) kept playing games with verbiage "you are walking out" and brother kept saying he was showing up until he got termination paperwork. 

- DB actually handed him letter of resignation trying to trick him into signing it as termination papers.

- Brother called him on the games saying he's not trying to sue for wrongful term, just wants to be able to claim UI to protect his family while he looks for new job. DB said he won't be getting UI according to his attorney and will fight the claim. 

- DB then told bro to leave the shop. Bro wouldn't without termination paperwork. DB threatened to call cops... they eventually showed and brother asked them if they were instructed to escort him off premises. Yes. Okay that's all I needed.

- Bro Has the video and police calls and has since talked to a labor lawyer who says no judge will deny his claim.... but other guys are screwed. 

- DB now has a design shop with zero creative staff, a huge backlog of work and a growing number of pissed off clients due to deadlines missing (smallish town and bro knows many clients personally and they're texting/calling asking wtf is up).

- Soooo... small victories, DB seems to have at least temporarily crash landed his biz in spite of himself. Surely will lose several clients over missed deadlines while he rebuilds/retrains staff. 

DB seems an appropriate name for the son! Is the dad still around (alive)? I bet he's PO'd that son is destroying the company he built!

Also aren't these NCs less useful in the small town that [Icon] describes? If everyone knows everyone, and there aren't too many companies; taking names isn't that big of a deal, right?

 

[The Big Guy]

So it seems that the boss was just trying to change out the staff after all. Gl to your brother.

 

[Godsbrother]

I have seen successful family businesses being ruined by the owner's kids several times over the years.  This looks like one more example.

 

[[icon]]

I agree with your assessment of the son running the company into the ground. I have known this kid for over a decade, and he is frequently shown examples of being hotheaded, rational, overly emotional. Generally the kid sucks at running a business. 

 A little more backstory, and I'm dictating my phone while driving so forgive any typos…   About seven or eight years ago the sun was starting to take the reins of the company, as the father was wanting to retire… Well the sun sucked and started causing some significant issues with clients and what not, so the father had a talk to them in the sun agreed to take the T-shirt portion of the business and branch out on his own under a sub company.  

 The father absolutely love my brother, and was actually grooming him to take over the business… He gave them a significant raise to keep him, and was working on a tentative agreement to sell the company to my brother. The sun caught wind of this and began to threaten the father with a lawsuit because of some long-standing verbal agreement to sell the company to him when the father retired.   I thought it was just trying to retire, felt bad, and eventually acquiesced and hand of the company over to his son.  This was around two years ago or so.

The father was in the office when I brother came in with his box of things for the sons wife to go through… Apparently he was tearing up pretty good and was begging My brother to not leave... my brother said he apologized give him a hug, thanked him for the years of employment, and that's when the police thing started up

in the end this is a good thing, my brother skill set significantly outpaces his role at this company… Have been doing a significant amount of freelance work at home on the side late night that was well beyond the scope of what he was doing hair… It'll be some lean times for a little bit but I'm confident he will land on the street and this will end up being a good thing in the long run… It's very easy to get complacent at a company sometimes

 

[[icon]]

Lol at all the typos in there, I blame Siri… Hopefully you guys get the idea

 

[msommer]

Lol at all the typos in there, I blame Siri… Hopefully you guys get the idea

I'm with HF - have him organize the guys that walked out and set up shop themselves, then start going after DBs customers.

Can any of them double as a salesman?

 

[[icon]]

I'm with HF - have him organize the guys that walked out and set up shop themselves, then start going after DBs customers.

Can any of them double as a salesman?

Ordinarily this would be my approach as well.... Downside is this business niche requires significant (7 figure) capital investment in printing equipment. This shop, for all its warts, was the best in the area by a measurable margin.  That said, he's in talks with a guy from his church about hanging out a shingle in a similar but not quite direct competitor with the potential to land a large client (another friend from church) that could provide enough business to get them off the ground. Rooting for that as I love the idea. 

 

[glvsav37]

Well it's over... I'll keep it short and elaborate if desired:

- of the 4 creative staff (my bro was head), 1 walked out of initial meetign, 2 walked on deadline day... none will have UI claims 

- DB (owner aka son) kept playing games with verbiage "you are walking out" and brother kept saying he was showing up until he got termination paperwork. 

- DB actually handed him letter of resignation trying to trick him into signing it as termination papers.

- Brother called him on the games saying he's not trying to sue for wrongful term, just wants to be able to claim UI to protect his family while he looks for new job. DB said he won't be getting UI according to his attorney and will fight the claim. 

- DB then told bro to leave the shop. Bro wouldn't without termination paperwork. DB threatened to call cops... they eventually showed and brother asked them if they were instructed to escort him off premises. Yes. Okay that's all I needed.

- Bro Has the video and police calls and has since talked to a labor lawyer who says no judge will deny his claim.... but other guys are screwed. 

- DB now has a design shop with zero creative staff, a huge backlog of work and a growing number of pissed off clients due to deadlines missing (smallish town and bro knows many clients personally and they're texting/calling asking wtf is up).

- Soooo... small victories, DB seems to have at least temporarily crash landed his biz in spite of himself. Surely will lose several clients over missed deadlines while he rebuilds/retrains staff. 

Tell him to call me...I'll charge double and use the excess income to heavily support your BBQ tent this year.  

In all honesty, that sucks that your brother is in this situation. Hope things get resolved or he finds a new gig very soon!

 

[bigbottom]

Good thing he didn't sign the NC and leave later.  DB sounds like the type of guy who would sue simply out of spite.

 

[glvsav37]

I agree with your assessment of the son running the company into the ground. I have known this kid for over a decade, and he is frequently shown examples of being hotheaded, rational, overly emotional. Generally the kid sucks at running a business. 

 A little more backstory, and I'm dictating my phone while driving so forgive any typos…   About seven or eight years ago the sun was starting to take the reins of the company, as the father was wanting to retire… Well the sun sucked and started causing some significant issues with clients and what not, so the father had a talk to them in the sun agreed to take the T-shirt portion of the business and branch out on his own under a sub company.  

 The father absolutely love my brother, and was actually grooming him to take over the business… He gave them a significant raise to keep him, and was working on a tentative agreement to sell the company to my brother. The sun caught wind of this and began to threaten the father with a lawsuit because of some long-standing verbal agreement to sell the company to him when the father retired.   I thought it was just trying to retire, felt bad, and eventually acquiesced and hand of the company over to his son.  This was around two years ago or so.

The father was in the office when I brother came in with his box of things for the sons wife to go through… Apparently he was tearing up pretty good and was begging My brother to not leave... my brother said he apologized give him a hug, thanked him for the years of employment, and that's when the police thing started up

in the end this is a good thing, my brother skill set significantly outpaces his role at this company… Have been doing a significant amount of freelance work at home on the side late night that was well beyond the scope of what he was doing hair… It'll be some lean times for a little bit but I'm confident he will land on the street and this will end up being a good thing in the long run… It's very easy to get complacent at a company sometimes

Its funny (not really) but this sounds kinda exactly what happened to me in a sense. Unfortunately I came into my situation 1/2 way though this. 

Was in a bad situation with my current studio that I loved working for but management change made it unbearable. I started looking and jumped at the 1st opportunity I could just to get out. I learned in the interview that they were in legal action with an old employee who stole 'some clients' and they were actively getting them back. 

When I get there I found our "some' turned out to be "almost all, except for 2" and in the 5 or so months I was there, we lost 1 of them after their contract was up. So I got laid off. 

Backstory goes that the agency was a long run studio where the owner was getting older. Head/top sales guy made an offer to buy the business and they were in solid negotiations right up to almost signing the deal. During the last round, the buyer put in the contract that the owner's son would have no role in the business and thats when everything fell apart. Owners son was a failed actor who used the studio more for free highlight reel editing (and I say "highlight" very loosely), would come in when he pleased, talk down to everyone and throw public fits over stupid things like when the coffee pot wasn't full.

So the owner freaks out, pulls the deal claiming he built this business for his son yada yada. Flash forward, the deal is squashed, buyer opens his one agency and takes all the clients. Son takes over the biz, and in 5 months they are shut down. 

good times. 

 

[eoMMan]

I remember having to sign a NC years back for an old job. We had a new owner come on board.  I ended up signing it but only after scribbling out a bunch of stuff. It didn't affect me in the long run. I left a few months later for another job  (same type of job but different industry). He was a DB too. 

 

[bigbottom]

Meh, I was going to stay out of posting in the thread and just read (some good responses for sure so far), but what the hey . . . . 

Not a Florida practitioner, but have litigated maybe 30 or 40 of these on both sides, and used to be an executive for a company and several subs that had them in place before I arrived and considered using them during my time there.

First, I doubt any of the three other creative staff who "walked out" will have any difficulty with UE compensation claims.  That's probably going to be deemed to be constructive termination under coerced circumstances, not voluntary job abandonment.  I am very confident that would be the result in three of the states in which I'm admitted for sure and relatively confident about the same outcome in the others.  Best of luck to them.

Second, my personal views are and always have been, since I started practicing employment law almost two decades ago, that noncompetes are - with some important exceptions - for crappy businesses that don't have sufficient confidence in their ability to retain their clients on their own organizational merits.  My last noncompete litigation, within the past year, involved defending a client who was sued by a huge corporation (owned by one of the company's largest investment firms) for allegedly violating an employment agreement with all of the typical restraint-of-trade clauses.  We counterclaimed, engineered a walkaway with no money changing hands and a silly settlement agreement that didn't really encumber my guy/gal any more than s/he had been encumbered before, and I would guess that the "big firm" hired by the other side spent at least $150K to $175K on legals, a total waste. 

Unless the EE in question is a top sales producer, someone with serious confidential and proprietary information (more IP-related than something as simple as a client list) in an industry involving complex mechanical, theoretical or technical matter, or a C-level executive or very close, such suits are almost never worth bringing, even for the supposed deterrence value they confer.  That does not mean, however, that companies won't bring them anyway, and it doesn't mean that courts won't uphold noncompetes.  However, most well-advised companies with a certain level of sophistication will not bother with such nonsense except in the cases of employees like those I described.  As well they should not.   

Agree with this.  The one wrinkle regarding the bolded, however, is that sometimes you need to pursue enforcement of a non-compete against someone where it isn't worth it so that you can be in a position to pursue enforcement when it is.  For example, if you have your sales staff sign non-competes, you may only care about your top sales producer as you suggest.  And let's say one of the crappy salespeople leaves and goes into direct competition with you in violation of the non-compete.  You may not care.  After all, he was a crappy salesperson.  So you don't do anything.  And then another crappy salesperson leaves and goes to a competitor in violation of the non-compete.  You don't do anything then either.  But then your top sales producer goes to a competitor.  Now you care.  And you sue to enforce the non-compete.  If I'm defending that guy, and trying to bust the non-compete, the first thing I'm finding out is all the times that you didn't bother to enforce the non-compete with other people in the same job category.  It depends on the judge, but I've busted non-competes multiple times on that argument alone.  Because simply preventing competition is not a legally justifiable reason for enforcing competition in the jurisdiction where I practice (as well as a number of other jurisdictions).  Rather, the justifiable basis for having and enforcing the non-compete is to protect the company's confidential and proprietary information and specialized training techniques.  And if you let other people who had access to the very same information walk out the door to a competitor, your argument that you are trying to protect company assets is wholly undermined.  So there are occasions where it is a rational decision to enforce non-competes when you don't really care all that much so that you can successfully enforce a non-compete when you do care. 

Of course, there's also the deterrent effect previously mentioned.  Many people will comply with a non-compete either because it's enforceable, or because they believe it to be enforceable, or because they don't want to deal with the cost of a lawsuit.  But if your good workers see a stream of people leave and violate the non-compete with no repercussions for doing so, they will be more likely to do so themselves.  So while it may not make sense to pursue enforcement in an individual case, some companies do so consistently to create a broader compliance and enforcement culture.  Of course, pursuing those lawsuits can be risky for the company beyond the individual case as well.  If the court ultimately determines the non-compete to be unenforceable, all your other employees with non-competes are going to find out about it.

As a practitioner, I know you know all of the above very well.  I was just adding these editorial comments for others who don't litigate these things for a living.

 

[James Daulton]

Hearing horror stories like this make me thankful I work for a large, professional organization.

 

[msommer]

Ordinarily this would be my approach as well.... Downside is this business niche requires significant (7 figure) capital investment in printing equipment. This shop, for all its warts, was the best in the area by a measurable margin.  That said, he's in talks with a guy from his church about hanging out a shingle in a similar but not quite direct competitor with the potential to land a large client (another friend from church) that could provide enough business to get them off the ground. Rooting for that as I love the idea. 

Can they use a 3rd party supplier with the equipment? I.E outsource the physical printing and then ship in the result?

Logistically more challenging to do it that way, obviously , but it could be a way to save up the capital or at the very least show the bank that you have a going concern that could be even more profitable with in-house equipment 

 

[msommer]

Hearing horror stories like this make me thankful I work for a large, professional organization.

Having worked for a large professional organization and hearing horror stories like this make me thankful I work for myself

 

[Aerial Assault]

As a practitioner, I know you know all of the above very well.  I was just adding these editorial comments for others who don't litigate these things for a living.

Sure.  And good post.

I've had that waiver argument tried against me a few times, when I was repping the ER plaintiff (in cases where either the EE in question fell into one of those categories I mentioned meriting enforcement litigation, or, in one notable case, where the client wanted to "send a message" and was sufficiently sophisticated, a regular source of business, and realistic about outcomes that I took the case anyway).  And it never worked for the opposition, mostly because our argument in opposition was always "that other EE who left and went to work for a supposed competitor didn't have access to confidential information" or "that other EE who left and went to work for a supposed competitor didn't appropriate proprietary info," etc.  That puts the EE defendant in a box as to the waiver argument because of significant proof problems.  It's difficult enough to get helpful information from a third party EE & their new third party ER who have nothing to do with the case; it's even more difficult to get them to admit that they did anything wrong.  And the argument has always struck me as a little weak too: "Well, I didn't violate the noncompete.  BUT EVEN IF I DID, Johnny did as well and ER-plaintiff did nothing about it."  I defeated the waiver defense each time it was raised, but I may have just been lucky.