No Compete Clause Question

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D

djdon

New DJ
Jul 31, 2006
96
0
64
Barnegat, NJ
www.puttinonthehits.com
A guy works for me signs a no compete clause as follows:

9.1 Employee agrees not to solicit current or former clients of Puttin' On The Hits! (DJ Service).
9.2 In consideration for being employed and trained, at any time after two (2) months of employment or work, employee agrees that upon the termination of work with DJ Service, employee agrees not to solicit current or former clients of DJ Service with a 50 mile radius of Barnegat, NJ, for a period of one (1) year, either working for himself or for another employer.
9.3 In the event employee violates this agreement, then and as and for liquidated damages, employee will pay to DJ Service sum of $500.00 per occasion, regardless of the fee charged for the job they worked, and will also be responsible for the costs of collection including reasonable attorney’s fees.

He quits or gets fired. If he goes to work for another company, and THAT company takes a job at a former client of mine, and sends the DJ I trained, do I have grounds to go after the guy that worked for me?
 
Don I have always heard that a no compete is more of a scare tactic than an actual enforcable instrument. What have you heard?
 
Don, you really should ask a lawyer. Every state is different in the way it applies contractual law.

Personally, it looks very hard to enforce. You being the plaintiff, the burden of proof is on you. I think it would be very very hard to prove a DJ contacted a former client of yours and the client didn't contact them first.

Lastly, I'll say this: If you don't trust someone not to gank you after you put trained them and food on their table, they aren't work hiring in the first place
 
djdon said:
A guy works for me signs a no compete clause as follows:...............
........do I have grounds to go after the guy that worked for me?
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Bad news Don. I've been on both sides of this situation in the electronics business. Your lawyer did a fine job drawing up a very scary document. Unfortunately, a little research will show you that VERY few non-competition contracts have been successfully ( for the contractor) tried IN NEW JERSEY. In most cases, NJ sees non-compete contracts as restraint of trade, on which they frown heavily. As a matter of fact, the very act of requesting that an employee sign one can, in some cases, cause problems for the employer ( i.e. - having to pay unemployment benefits if the employee refuses, or damages to the employee). If you were in most other states this would not be the case. Maybe NJ is just hungry for generated income, but I don't know.
 
Joe hit it on the head for New Jersey.
And from what I understand, in general, non-compete clauses are more for when an owner sells a business rather then for individual employees. For example, if you sold your business you would sign a non-compete contract with the buyer saying that you agree not to start a similar business within a given period of time and within a certain distance of the original business market.
 
Deejay Dan said:
Lastly, I'll say this: If you don't trust someone not to gank you after you put trained them and food on their table, they aren't work hiring in the first place
Click to expand...

Thats the long and short of it right there. If you have to worry about it you should reasses who you hire
 
Jeff Romard said:
Thats the long and short of it right there. If you have to worry about it you should reasses who you hire
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Like we're supposed to know right off the bat whether they're trustworthy?

Come on, guys.

Here's an answer I got from a reputable lawyer:

Don,

This is called a Non-Solicitation Agreement and is less restrictive than a full non compete. These agreements are generally enforceable as to YOUR clients. A non-compete covers any work in the business and would be of doubtful enforceability.

Here's how he suggested I reword:

9.0 Non Solicitation Clause

9.1 Employee agrees not to solicit, nor accept work from, current or former clients of Puttin' On The Hits! (DJ Service), while employed by DJ Service unless the work is contracted through DJ Service.

9.2 After termination of employment with DJ Service, Employee agrees not to solicit current or former clients of DJ Service for a period of one (1) year.

9.3 In the event Employee violates this agreement, then and as and for liquidated damages, Employee will pay to DJ Service the sum of $ 2,000 per violation, regardless of the fee charged for the job they worked, and will also be responsible for the costs of collection including reasonable attorney’s fees.


How is the employee supposed to know who my clients are? He knows the clients he's worked for while he's worked for me. That's all I can really cover. If he somehow steals my entire client list, well, that's a different story.
 
Basically unenforceable in PA.

The Pros tried to slap that on me..... I belived it was bogus and signed it. And when I left I started my own company. They knew about it... nothing happened.
 
djdon said:
Like we're supposed to know right off the bat whether they're trustworthy?
Click to expand...

Don

All I can tell you is the 2 guys that work with me I would trust with my life. I knew from day one that neither one of them were going to screw me. They both have brought in more business here than they would ever take if they left to go on thier own. I try to treat them good and they return the favour.

So mabye I can't relate to this problem

At the same time neither one of them knows the inner workings of my business completly. They both know what they need to know. Without knowing the whole picture what anyone could take from you that wasn't ready to leave anyway is small
 
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