Non-Competes – Revisited

[Grinner Hester]

I have had a baaad taiste in my mouth since being sued for non-compete when I started my own company.
My view on em is simple… If somebody wants you to sign one, don’t.
If it dawns on you to have somebody sign one, treat them right instead.
If I didn’t trust a freelancer wouldnt make a play for my client, I sure would not introduce the,. If I really thought they could, I’d disect my own practices.
I entered this busines TO compete. My very job is to do a better job than those around me. To sign something otherwise would kind of feel like the union without the garanteed check for not trying very hard.

[Nick Griffin]

Grin-
If this was a perfect world you would have the right answer. But, sadly enough, it’s not.

As someone who routinely falls on both sides of this — being the one who hires freelancers as well as the one who is brought into projects AS an outside freelancer — the realistic answer is that for some people and some companies non-competes are a requirement. I routinely try to avoid people who I don’t feel I can trust, but I’ve been fooled before. Our non-compete language is part of a 20 paragraph terms and conditions on the back of our purchase order.

I believe that Walt’s information is correct, but varies by state. I also believe that the term can be extended to two years. The basic spirit of the law is that the non-compete can’t deny someone the right to earn a living. What it can do is prevent employees, contractors, etc. from poaching the people and companies to whom they were introduced by the employer. In the case of a really broad sales job where hundreds or even thousands of prospects are deemed off limits, non-compete agreements usually add geographic language. ie.- “…cannot perform a similar service within 50 miles of previous employer.”

BUT, as is the case with many other things legal, I’ve seen non-competes which are entirely un-enforceable. They’re used to intimidate and give the employee the illusion that the law would be on the side of the employer. The employer is betting that when push comes to shove the average person won’t have and especially won’t be willing to pay for the legal counsel which could challenge the agreement.

[Walter Biscardi]

[Nick Griffin] “BUT, as is the case with many other things legal, I’ve seen non-competes which are entirely un-enforceable. “

Yeah, you should see one that I was recently asked to sign. Completely ridiculous. It included a clause something like “you shall not operate a competing business, etc….” So the moment I sign it I’m in violation of it because I own a video production company. Makes no sense at all and I’m not sure how the person honestly expected me to sign it.

Non-competes when used correctly can protect your own business.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

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[Ron Lindeboom]

I have stayed out of this one in the couple of previous go-rounds because I knew I’d be the wet blanket on this one. But, as Walter found out from his attorney and many here were previously aware, non-competes are not unethical and do not have to be tools of the unscrupulous. They can be highly defined and the more specific they are, as some here have pointed out, it makes them all the more enforceable.

I have been under a few non-competes in my time (three exactly) and two I had no issues complying with, and the third? — well, let’s just say that there would be no Creative COW if we had caved into it and Nick Griffin and his attorney had not helped Kathlyn and I. Thanks eternally, Nick.

The spirit of a balanced non-compete says something like: “You are entering into the employ of XYZ Company who currently has dealings with ABC Company, DEF Inc., GHI Holdings and JKL & Associates. As part of this agreement, you agree that these are our accounts and that the relationship is with XYZ Company and you are barred from doing business with these companies for a period of one year from the date of your termination.”

Me, I’d have no problem whatsoever signing an agreement like that. But some of the non-competes that I have seen bandied about on this forum — especially those that are shoved under the nose of employees at the time of their termination — I wouldn’t sign.

It is easy to spot the honorable non-competes from the ones designed to destroy a person’s ability to work. The courts can see through these destructive agreements too and are likely to throw them out.

Keep a non-compete specific, very specific, and for a short enough period of time that is deemed not excessive and you are likely to have something that can be enforced. Try to make all the benefit fall to yourself, and you are likely to lose any sympathy that the courts may have had with you and your situation.

Best regards,

Ron Lindeboom
creativecow.net

[Mike Cohen]

I try to use contractors with whom I have an existing relationship, knowing that if they were to impinge upon my business with a client, it could jeopardize our relationship.
I sometimes use a “non-disclosure” statement in a contract, along the lines of:

This project is proprietary and must not be discussed while in-development, etc.

I also ask for a conflict of interest declaration, something that is standard in medical education – to see if a contractor does work for a competitor or a sponsor. It is ok if they do, but everything needs to be on the table.

Here is an example. I use a particular animation house to do 3D when it is requested by the client. Knowing who my client is, the animation house could certainly hit up my client for work, if they so chose to do so. However out of respect, they do not. By the same token, if a client asks me for a 3D animation vendor, I will give them the name of my own preferred vendors, who are honorable people to work with, and who do great work.

Speaking of lawyers, although unrelated, we have had a few shoots canceled at the last minute because the patient’s brother, who is a lawyer, started asking about royalties and scale pay.

Mike

[Walter Biscardi]

[Ron Lindeboom] “Me, I’d have no problem whatsoever signing an agreement like that. But some of the non-competes that I have seen bandied about on this forum — especially those that are shoved under the nose of employees at the time of their termination — I wouldn’t sign.
“

I had an interesting twist on a contract from a former client that wants me to do work with them again. They included a “Change of Plans” clause that essentially stated that if they change their minds or the project gets cancelled at any point, then I don’t get paid for any work done to that point.

Hmmmmm, since a “change of plans” is pretty much normal operation in the corporate world, I politely said “thanks but no thanks.”

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

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[Ron Lindeboom]

[walter biscardi] “I had an interesting twist on a contract from a former client that wants me to do work with them again. They included a “Change of Plans” clause that essentially stated that if they change their minds or the project gets cancelled at any point, then I don’t get paid for any work done to that point.”

What?$#@!? — you didn’t jump at the chance?

:o)

Man, that is one of the most insane clauses I have ever heard of, Walter.

Crazy stuff.

Ron Lindeboom

[Todd Terry]

[walter biscardi] “included a “Change of Plans” clause that essentially stated that if they change their minds or the project gets cancelled at any point, then I don’t get paid for any work done to that point.”

I think I’ve had clients before that always just sorta “assumed” that was the case, as insane as it might sound. Those are due for an education.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com

[David Roth weiss]

[walter biscardi] “if they change their minds or the project gets cancelled at any point, then I don’t get paid for any work done to that point. “

So, it would naturally follow that, if you changed your mind and decided not to finish the project, you nonetheless get paid for the entire project. Right? Why not add that as an addendum to the contract and see how they like it.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

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[Ron Lindeboom]

[David Roth Weiss] “So, it would naturally follow that, if you changed your mind and decided not to finish the project, you nonetheless get paid for the entire project. Right? Why not add that as an addendum to the contract and see how they like it.”

Man, I like the way that you think, David.

🙂

Ron Lindeboom