jasonxctf Posted February 23, 2006 Share Posted February 23, 2006 hey i know that there are some lawyers floating around on this board. i have a general question. an employee of my organization signed a non-compete. He since quit and went to a competitor. A customer of his, worked with us in 2003. This same customer worked with this competitor he went to back in 1999. Now this same customer has used him and this competitor in 2006. Did this employee violate his non-compete? There is no doubt that he handled the transaction. Quote Link to comment Share on other sites More sharing options...
kapkomet Posted February 23, 2006 Share Posted February 23, 2006 There's a lot to that question and the details are fuzzy. It really depends on how the non-compete is structured and the terms of the "departure". You also need to ask yourself how much of a revenue hit it was to your business to lose this customer. If it's not that much, I'd just move on. If it's a major account - you risk pissing off the customer (who by the way goes back to the other business longer) to the place where you're not going to get the business anyway. It's going to be about your business and the other business, not this guy who left to go to the other place. Quote Link to comment Share on other sites More sharing options...
Chisoxrd5 Posted February 23, 2006 Share Posted February 23, 2006 QUOTE(jasonxctf @ Feb 23, 2006 -> 05:47 PM) hey i know that there are some lawyers floating around on this board. i have a general question. an employee of my organization signed a non-compete. He since quit and went to a competitor. A customer of his, worked with us in 2003. This same customer worked with this competitor he went to back in 1999. Now this same customer has used him and this competitor in 2006. Did this employee violate his non-compete? There is no doubt that he handled the transaction. He might have, I'm a little confused as to the specifics of what you are saying. He was employed at your company and quit on what date? Also what was the terms of the Covenant Not to Compete? They can vary from 1 year to 15 years in duration? He was rehired by one of your old clients? And since then has taken work away from your company? Btw I'm an accountant, but I deal with these quite a bit. Quote Link to comment Share on other sites More sharing options...
kapkomet Posted February 23, 2006 Share Posted February 23, 2006 QUOTE(Chisoxrd5 @ Feb 23, 2006 -> 10:56 PM) He might have, I'm a little confused as to the specifics of what you are saying. He was employed at your company and quit on what date? Also what was the terms of the Covenant Not to Compete? They can vary from 1 year to 15 years in duration? He was rehired by one of your old clients? And since then has taken work away from your company? Btw I'm an accountant, but I deal with these quite a bit. Stupid accountant. Quote Link to comment Share on other sites More sharing options...
Chisoxrd5 Posted February 23, 2006 Share Posted February 23, 2006 QUOTE(kapkomet @ Feb 23, 2006 -> 05:58 PM) Stupid accountant. Lol..I basically said the same exact thing as you Lawyers :banghead Quote Link to comment Share on other sites More sharing options...
kapkomet Posted February 23, 2006 Share Posted February 23, 2006 QUOTE(Chisoxrd5 @ Feb 23, 2006 -> 11:00 PM) Lol..I basically said the same exact thing as you Lawyers :banghead Yea, I ain't a lawyer either. I'm in finance... which is a little hoidy toidy accounting job. Quote Link to comment Share on other sites More sharing options...
Chisoxrd5 Posted February 23, 2006 Share Posted February 23, 2006 QUOTE(kapkomet @ Feb 23, 2006 -> 06:04 PM) Yea, I ain't a lawyer either. I'm in finance... which is a little hoidy toidy accounting job. Ahh so we both don't know what were talking about I'll drink to that Quote Link to comment Share on other sites More sharing options...
SoxFan562004 Posted February 23, 2006 Share Posted February 23, 2006 Do you know if the non-compete is enforceable? It has to be reasonable in time, location and a unique skill/knowledge of trade secret/industry standard, etc... Quote Link to comment Share on other sites More sharing options...
jasonxctf Posted February 24, 2006 Author Share Posted February 24, 2006 QUOTE(SoxFan562004 @ Feb 23, 2006 -> 11:13 PM) Do you know if the non-compete is enforceable? It has to be reasonable in time, location and a unique skill/knowledge of trade secret/industry standard, etc... the noncompete was 2 yrs and his last date was 12/21/04. on a side note, the original customer worked with this company before it was sold on 12/1/04. my ex-employee went to this competitor post-sale and took this customer with him. i've been told that the non compete was enforceable but who really knows? Quote Link to comment Share on other sites More sharing options...
RockRaines Posted February 24, 2006 Share Posted February 24, 2006 QUOTE(jasonxctf @ Feb 23, 2006 -> 08:22 PM) the noncompete was 2 yrs and his last date was 12/21/04. on a side note, the original customer worked with this company before it was sold on 12/1/04. my ex-employee went to this competitor post-sale and took this customer with him. i've been told that the non compete was enforceable but who really knows? Its almost impossible to prove that he stole a sale or a customer. He could have attached someone else's name to the deal, etc. I have run across this before, many times in my line of work. Quote Link to comment Share on other sites More sharing options...
Steff Posted February 24, 2006 Share Posted February 24, 2006 QUOTE(jasonxctf @ Feb 23, 2006 -> 08:22 PM) the noncompete was 2 yrs and his last date was 12/21/04. on a side note, the original customer worked with this company before it was sold on 12/1/04. my ex-employee went to this competitor post-sale and took this customer with him. i've been told that the non compete was enforceable but who really knows? Curious as to what your industry is if you don't mind sharing? We deal with this on the sales side when they leave and go to agents, or come to us from agents. For us it depends on the length of the non-compete of course. And I think (don't quote me cause the contracts can be as specifically defined as the employer/employee want them to be) the only way it would apply to the customer is if it can be proved that he undermined the former company and caused financial loss. We had a new sales rep come on board 1 day after his year non-compete expired and a former customer of his came with - bringing about $2 million in revenue - but since he didn't undercut the previous company in terms of pricing and compensation, and the customer was working without a current contract with that former agent, they weren't able to do anything about it. Quote Link to comment Share on other sites More sharing options...
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