Thread: Non-Compete Clause

Hi all, I am new to the forum. I have had a job offer from a large company that performs inspections for the insurance industry. I am concerned about the non-compete clause they require following the probation period. I would welcome insight about non-compete clauses and what some of you may consider to be reasonable elements of the clause. Thanks.

What are the stipulations of the non-compete clause?

Originally Posted by Scott Shan

Hi all, I am new to the forum. I have had a job offer from a large company that performs inspections for the insurance industry. I am concerned about the non-compete clause they require following the probation period. I would welcome insight about non-compete clauses and what some of you may consider to be reasonable elements of the clause. Thanks.

You have to be very careful. From my Government contracting days, they can be not too bad, to you would have to completely leave the industry for two years. The last one I had was like that when small company sold itself to a very big company. I was the first one to resign before signing it. Others followed when they were force to accept the new company wasn't going to relent. Some claim to ownership of anything you might develop, on your own time, when working for the company. It didn't make any difference if it was related to their industry or not.

Only enforceable if not overtly inclusive...If you are in business, you should have an attorney on retainer...
run it by him with regard to applicable State Enforceable laws and Regulations prior to proceeding.
The Key to Risk is Knowledge of the Risk......

Ultimately, the word "enforceable" comes up which kind of stinks. As in, a lot of people enter into agreements they have no intention of sticking to. As HIs we should be particulary sensitive this issue

The question of "enforceable" comes down to who has the most money and the best attorney and wants to fight the most (again, does this sound familiar to anyone?)

If you agree to take on the job, be ready to accept the terms that go along with it as it's presented... IMO.

I worked for a company once that asked me to sign a two-year non-compete after having worked there for three years already. I asked them for a bonus equivalent to two years salary in exchange for my signature. If someone is asking me to forfeit my livelihood for two years, you can be certain I'm going to get compensated for it.

It's one thing to agree not to poach existing customers, and it's certainly reasonable to restrict one from using or disclosing trade secrets, but to restrict someone from working in the industry of their expertise should come with remuneration.

Non-compete agreements are hard to enforce in Florida (but you are in Ohio, not Florida, I know).

A non compete has to be specific in its territory, type of work and period of time. I had them with all my employees for a two year period after they left the company and the agreement was upheld in court twice. A business owner is not a school, nor is he a repository of potential future clients, both of which come to a new employee as he is trained and as he works for the company. He learns good business practice, marketing, all things related to a successful HI company, for free. He is introduced to Realtors, Lawyers, Mortgage brokers and to the rest of the HI community. There has to be a cost to the employee for receiving the training and knowledge to open his own practice and that protects both him and his new employer. The specifics of the agreement will allow the employee to work in certain areas but not in the protected areas, which have to be very well defined or the agreement will be thrown out of court. (CT) In my case our agreement only included towns that our company had done a "significant" amount of business over the previous three years.

John, it sounds like the scenario in this thread and in your experience differs from mine in that I was already established in my field, whereas you're thinking more about prospective trainees. Also, since my previous company considered their market to be all countries where English is spoken as a primary or secondary language or having education institutions in which English is spoken as a primary language, it would have shut me out of my industry for two years.

But have you considered starting a school? I mean, perhaps they should be paying you for such valuable training. That might obviate the need for a non-compete.

Originally Posted by Corn Walker

John, it sounds like the scenario in this thread and in your experience differs from mine in that I was already established in my field, whereas you're thinking more about prospective trainees. Also, since my previous company considered their market to be all countries where English is spoken as a primary or secondary language or having education institutions in which English is spoken as a primary language, it would have shut me out of my industry for two years.

But have you considered starting a school? I mean, perhaps they should be paying you for such valuable training. That might obviate the need for a non-compete.

All the people I hired were not inspectors. They came from the trades. I paid a weekly salary , I gave benefits, health, pension , paid vacation, company vehicle with all expenses and a year end bonus. That's why they signed a non compete. There are too many schools and I am retired. All the schools teach now is how to lower prices and market to Realtors.