Employee Noncompete Agreement?

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redBaron

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Jul 5, 2007
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ElPugDiablo said:
Nope. Why would you need one?

I the industry I'm in (roof equipment mfg) it is extremely aggressive. At this moment a former employee has gone in competition with us, using our trade secrets and customer list.

A noncompete would - in theory - prevent an employee from learning all there is no know about your business, only to open a new shop across the street and use that info against you.
 

cafemakers

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Nov 3, 2004
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These agreements are useful more as a deterrent than anything else; you can try to scare your employees, but are essentially unenforceable. No judge will rule against the right of an employee-at-will to pursue gainful employment elsewhere. If you have an equity partner or other "key man" leave your business, this is another story altogether and you should contact an attorney for advice.

I have found that the most cost effective solution will be to provide a work environment that makes your employees not want to leave.

I'm not recommending that you hand out cash at the door, but pay competitive wages and give them opportunities for growth and the recognition that they need. Create an environment that is fun to work in and you don't need to worry about non-compete agreements because your best people won't want to leave for a competitor across town.
 

KharmaCoffee

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Jul 3, 2007
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Sneads Ferry, NC
Having experience in both coffee and the staffing industry, let me tell you that Cafemakers reply is spot-on - best advice. It also helps to get to know your employees and understand what their goals are. Most people will go (or stay) where they feel they are being most valued (and not just monetarily).
 

FairviewCoffee

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Jul 22, 2007
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Fairview Park, Ohio
Non Compete

Although a judge would have a hard time enforcing a non compete with an at-will employee who was let go, they will usually enforce it against someone who quit. But you have to limit the scope of the non compete. You can tell them they can't go work in the place across the street, but not someone in another town that is not competing with you.

Non competes are looked at for limitation in location and time. Just keep them as limited as possible and you will have some teeth, even if small, for your document.

That being said, the legal bill from enforcement would not usually be worth it for a $7-8 employee. Plus, as cafemakers said, they are usually most effective as a deterrent.

I've considered this myself for someone I may take the time and money to train in latte art. There is a justifiable reason to keep them from training with you, quitting and then working next door. Or the company next door doing it for that matter. No one in this area does latte art and it is something that would stand out.

That's my two cents
 

demetri

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Jul 18, 2006
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Winnipeg, MB
They're worth it only if you are willing to enforce it.

The non-compete is a good way to protect "Your" secrets but you can't stop someone from using something they learned working for you that they could have learned working for anyone else.
 
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