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Non-Compete Agreement - Anyone Used One?

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  • Non-Compete Agreement - Anyone Used One?

    Has anyone (as an employee or employer) used a non-compete agreement with their instructors/trainers?

    Thinking of implementing one, but before I do so, I would be interested to hear your experiences, comments, etc.

  • #2
    No opinion on use but check validity in your state. Not enforceable in CA (i.e., not legal).

    Comment

    • Original Poster

      #3
      Originally posted by paint hunter View Post
      No opinion on use but check validity in your state. Not enforceable in CA (i.e., not legal).

      Thanks for the "heads up". I have checked, and they are legal in my state.

      I am not looking to prevent someone who should leave my employment from pursuing the same work elsewhere. Just trying to help minimize the possibility of them walking out the door and setting up shop just down the road and taking a bunch of clients they were training at my place with them. If they want to leave, and then set up shop down the road in a year or so, so be it.

      Comment


      • #4
        I have not used one in the horse business, but use one at my "real job" all the time. They are a good general agreement to have when someone leaves to remind them of their obligations, however, should they choose to ignore the agreement, and you have to take them to court to have it upheld it's a long and expensive process. It is also a very gray area in some cases, and whether it's upheld or not may depend on the judge you get and how strictly they interpret the agreement. I have seen it go both ways-some I thought were sure would be upheld were thrown out, and some I thought the company had no chance of winning were upheld. Usually the standard of proof lies on the plaintiff to show how the person is clearly violating the agreement, and how its a threat to your business. An overly broad agreement that seems to just prevent someone from making a living is not likely to be upheld. So for example, if you said "You can't train or teach in a hunter/jumper barn within a 20 mile radius of exisiting barn for one year" that would probably be OK but "You may not train in a hunter/jumper barn for one year" and the person moved to another state and you wanted to pursue them, good luck.

        Comment


        • #5
          The key to enforceability of a non-compete agreement is reasonableness. If your state allows them, as you said it did, then your provisions must be reasonable. Like Kimball1 said, you can't be overly broad. Each state has applicable case law setting out what the courts have found to be reasonable. No competing business within 10 miles for 1 year, probably reasonable. No competing business within 100 miles for 6 months, could be questionable. The balance is protecting your livelihood but not cutting someone else off from pursuing their own. If you have an attorney, preferably in employment law, you might want to have them draft it or draft one of your own and run it by them. Good luck!

          Comment

          • Original Poster

            #6
            Originally posted by kimball1 View Post
            if you said "You can't train or teach in a hunter/jumper barn within a 20 mile radius of exisiting barn for one year" that would probably be OK but "You may not train in a hunter/jumper barn for one year" and the person moved to another state and you wanted to pursue them, good luck.

            I have no problem with that. If they want to leave and do the same thing elsewhere, that's fine with me. I just don't want them doing it in my back yard!

            Comment


            • #7
              Way back fresh out of my jr years I had a trainer want me to come teach a couple up/down lessons weekly (like a Saturday). I lived about 25 miles (a solid 30-40 minute drive then) away. I opted not to do it cause I liked my ammy status, but a big reason I said no was she wanted me to sign a 50 mile no compete agreement. I thought that distance was just too big for a w/t 1x/week instructor especially cause at the time there weren't really any other barns in that area that offered what she did. A 10 or maybe even 20 mile would have been more reasonable IMO. Just my experience.

              I guess it depends on what type of position this person will have with you as well & what the "horsey" area is like where you are located. Obviously the more advanced teaching/riding they are & more involved a person is with your clients/program the bigger the risk is to you that if they leave your clients might too.
              "I'm not crazy...my mother had me tested"

              Comment


              • #8
                They can be difficult and expensive to enforce. An example would be if you improperly fired an employee, the employee felt the need to quit because of some violation of employment law or improper working conditions, or you laid the employee off.

                A non-compete is also difficult to enforce if the person is an independent contractor.

                Non-competes are generally used to protect trade secrets. I'm not sure that's applicable here.

                Comment


                • #9
                  I have something very similar but it's not a "Non-Compete Agreement." Mine is a "Non-Solicitation and Non-Disclosure Agreement." You basically can't dictate to someone who lives in your area where they may or may not do business. The horse world is small, and people move around. If trade secrets aren't involved, it's going to be pretty tough to uphold saying "you can't work within XX miles of me."

                  My document essentially allows someone who conducts any riding/training/sales/whatever-horse-related business on my farm to do so as long as they desire and as long as I WANT them here. Once their association or affiliation with my farm is ended (by them or by me), they are prohibited, for a period of two years, from soliciting specific horse-related business (exactly what is spelled out in the document) from any customers that: were here when they came here; that arrived after they began their affiliation/association with me; or that may be a potential customer who has contacted my farm about services offered here during their affiliation/association with my farm. It also prohibits them from disclosing any information about the operation of my business that they may become privy to during their time here.

                  Basically, it prevents another professional or an employee from actively trying to steal clients, but it doesn't prohibit any clients that WANT to go with them from doing so.
                  Whoever said money can't buy happiness never owned a horse.

                  Comment


                  • #10
                    I would imagine that in some states and situations you would be violating labor/right to work laws.
                    ... _. ._ .._. .._

                    Comment


                    • #11
                      Client $.02:

                      If I found out a barn I was boarding/riding at made its instructors sign a non-compete clause, I would think they were nutbars and run away. I also feel this way about hair salons and anywhere that specific product innovations aren't involved. If being in your employ has made someone more valuable, you have to pay them enough to stay or suck it up when they go down the road. If my favorite trainer Joey couldn't train me at his new farm because of some ridiculous, client-specific non-compete clause, I would be extra pissed.
                      _____________________________________________

                      -Catherine Cullen

                      Comment


                      • #12
                        I should also add that you can have anyone sign a non-compete agreement. That doesn't mean you can enforce it. Just ask Microsoft!

                        Comment


                        • #13
                          If a business is ethically and legitimately run, then why would it bother you if another instructor set up shop close by? The horse community is small. If you treat clients fairly, are honest, forthright, and competent then you should have no worries. Frankly, if I were in your shoes, and someone in my employ wished to leave I would simply bid them farewell on as positive a term(s) as I could manage. Then I would continue to run my business as usual. Clients come and go for all sorts of reason. I wouldn't worry about clients leaving. If I were in their shoes, and I wanted to follow the trainer to another barn, 20 miles wouldn't stop me. The overall end result would be the same.

                          Don't sweat it - life is too short. When clients aren't happy and wish to leave, bid them farewell. Makes life simpler for you actually. I would only want happy, positive relations to do business with.

                          I think non-compete agreements casts the originating party in a suspect, if not down-right negative light. It makes the originator look fearful and lacking in self-confidence. Sorry - not trying to be harsh - its simply my POV.

                          Comment


                          • #14
                            [QUOTE=Prima Donna;4201560]The key to enforceability of a non-compete agreement is reasonableness. If your state allows them, as you said it did, then your provisions must be reasonable. Like Kimball1 said, you can't be overly broad. Each state has applicable case law setting out what the courts have found to be reasonable. No competing business within 10 miles for 1 year, probably reasonable. No competing business within 100 miles for 6 months, could be questionable. The balance is protecting your livelihood but not cutting someone else off from pursuing their own.QUOTE]

                            I have to agree. I was asked by my trainer if I wanted to go pro and teach the beg/int lessons. All sounded good until she whipped out the non-compete that said I couldn't teach, train or board horses w/i a 50 mile radius for 3 years. I ran away! At that point in time, i didn't realize that the contract was unreasonable and that I could contest it....however, as a friend pointed out later - if she felt that "threatened" then I probably didn't need to be there to begin with! I didn't even have a problem with the radius....more the time frame!

                            Comment


                            • #15
                              Originally posted by Strictly Classical View Post
                              If a business is ethically and legitimately run, then why would it bother you if another instructor set up shop close by? The horse community is small. If you treat clients fairly, are honest, forthright, and competent then you should have no worries. Frankly, if I were in your shoes, and someone in my employ wished to leave I would simply bid them farewell on as positive a term(s) as I could manage. Then I would continue to run my business as usual. Clients come and go for all sorts of reason. I wouldn't worry about clients leaving. If I were in their shoes, and I wanted to follow the trainer to another barn, 20 miles wouldn't stop me. The overall end result would be the same.

                              Don't sweat it - life is too short. When clients aren't happy and wish to leave, bid them farewell. Makes life simpler for you actually. I would only want happy, positive relations to do business with.

                              I think non-compete agreements casts the originating party in a suspect, if not down-right negative light. It makes the originator look fearful and lacking in self-confidence. Sorry - not trying to be harsh - its simply my POV.
                              I completely agree!

                              Not being a trainer, I'm baffled at this "stealing my clients" attitude. Isn't it the client's decision to stay at current barn or follow trainer around? Sure, trainer can make that decision tough by refusing to teach client should client not move w/ trainer, but trainer cannot force client to follow him/her around. But maybe I'm missing something here ...?
                              Full-time bargain hunter.

                              Comment


                              • #16
                                Originally posted by katie16 View Post
                                Has anyone (as an employee or employer) used a non-compete agreement with their instructors/trainers?

                                Thinking of implementing one, but before I do so, I would be interested to hear your experiences, comments, etc.

                                I think it's ridiculous and any trainer that signs one, is out of their mind.

                                Comment


                                • #17
                                  My former trainer had one with a woman who trained out of his barn briefly. Either he was an idiot and didn't press charges, didn't want the clients anyway, or didn't have it in writing, but the woman took about 5 clients with her, with 1-2 horses.

                                  Comment


                                  • #18
                                    As a professional that worked their way up through a myriad of barns that had young trainers coming and going, I can somewhat see the reasonings. Too many people just seem to stir up trouble among clients, maybe too inclined to gossip with them, and next thing you know a group of customers that was previously quite happy is suddenly not so.

                                    Another example would be when hiring a full time assistant from out of state. I can absolutely see the logic in that - no need to get them all set up here, help them establish a reputation, then watch them walk away with your clients.

                                    Within reason there is nothing wrong with protecting your business.
                                    EHJ | FB | #140 | watch | #insta

                                    Comment


                                    • #19
                                      Didn't press charges? Seriously?

                                      Maybe he realized that the whole concept is ridiculous! She didn't steal the clients, they left. As long as they met any requirements for notice, etc., wave goodbye with a smile!
                                      Can you imagine how you would look if someone tried to use a non-compete clause to prevent a former employee from serving his/her former clients? What do you think they would do, come back??
                                      _____________________________________________

                                      -Catherine Cullen

                                      Comment


                                      • #20
                                        Originally posted by Pirateer View Post
                                        My former trainer had one with a woman who trained out of his barn briefly. Either he was an idiot and didn't press charges, didn't want the clients anyway, or didn't have it in writing, but the woman took about 5 clients with her, with 1-2 horses.
                                        Noncompetes are purely civil -- you can't "press charges" for violating them because it is not a crime. Pursuing a suit is extremely expensive. Your former trainer may have done a cost-benefit analysis and decided she wasn't worth the expense.

                                        Comment

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