Client Steals Subs From GC. - Business - Contractor Talk

Client Steals Subs From GC.

 
Thread Tools Search this Thread Display Modes
Old 03-23-2014, 02:50 AM   #1
Registered User
 
JTECo.'s Avatar
 
Trade: General Building B Class
Join Date: Mar 2014
Location: San Francisco Bay Area
Posts: 17
Rewards Points: 10

Client Steals Subs From GC.


Hello all,

Looking for legal advise. I have an interesting scenario here. I haven't included names for privacy copyright purposes. For 7 years an independent company contracted my GC business to perform in-home installations of prefabricated closet systems for their major retail client. They signed me up as their exclusive contractor within a 100mile radius. Instructions were to build a crew to handle the increasing volume annually. I was able to recruit up to 10 installers whom I personally trained, mentored, subcontracted and paid directly. The structure was widely accepted during the first 5 years. Here's where it started to become unstable, the independent company got bought out by the major retailer. Prices dropped and volumes doubled. Great for business!! Then the retailer got publicly traded. Investors influences kicked in after 2 years. They didn't renew my contract and asked me to step down within 2 weeks. They went straight to my subcontractors and offered them individual contracts at a significantly lower price to carry on installing. Based on our loyalties to each other, My subcontractors asked if I had any other projects for them and that they would rather go with me. I said "Not within the span of 2 weeks as I'd dedicated all my time trying to grow the business around the retailer.". So most signed on and scored contracts while I got dropped. I guess my next question is as a licensed general contractor, how ethical was this take-over and what legal actions can I take to get some settlement on at least consultation fees. Any word of advice is greatly appreciated!

Last edited by JTECo.; 03-23-2014 at 03:02 AM. Reason: Redundancy
JTECo. is offline  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. ContractorTalk.com DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!

   

Advertisement

 

Old 03-23-2014, 03:05 AM   #2
Pro
 
mikeswoods's Avatar
 
Trade: interior remodeling
Join Date: Oct 2008
Location: Kane Co. Illinois
Posts: 2,716
Rewards Points: 2,664

Re: Client Steals Subs From GC.


You are out of business----


I'm surprised you did not see that one coming----

I doubt if you have legal recourse---have you spoken to your attorney about this?

When you only have one customer and that customer goes away you are done.

Advertisement

mikeswoods is offline  
The Following User Says Thank You to mikeswoods For This Useful Post:
wallmaxx (03-23-2014)
Old 03-23-2014, 03:08 AM   #3
Registered User
 
JTECo.'s Avatar
 
Trade: General Building B Class
Join Date: Mar 2014
Location: San Francisco Bay Area
Posts: 17
Rewards Points: 10

Re: Client Steals Subs From GC.


Not spoken to any attorney as of yet. Wanted to gather as much as I can hence the post.
JTECo. is offline  
Sponsored Links
Advertisement
 
Old 03-23-2014, 04:26 AM   #4
Have Trowel, Do travel
 
brunothedog's Avatar
 
Trade: Artisan
Join Date: Sep 2013
Location: international
Posts: 909
Rewards Points: 1,188

Re: Client Steals Subs From GC.


sorry 'bout your situation and you will be entering a dark tunnel,

-All the eggs in one basket- comes to mind
__________________
I used to love the days when you could look at an unattended bag on a train or bus and think to yourself...'Iím going to take that.'
brunothedog is offline  
Old 03-23-2014, 06:44 AM   #5
Pro
 
WBailey1041's Avatar
 
Trade: Gutters
Join Date: Jan 2014
Location: Chicago, IL
Posts: 908
Rewards Points: 1,709

Re: Client Steals Subs From GC.


Hopefully in the last seven years you saved a big wad of cash. It may not be ethical but it sure doesn't sound illegal, actually sounds like the usual and frankly EXPECTED outcome. What are the chances you had your subs sign non compete agreements? I'm betting slim to none and slim just walked out the door. Maybe one of your former subs will hire you?
WBailey1041 is offline  
Old 03-23-2014, 07:34 AM   #6
The Duke
 
Kent Whitten's Avatar
 
Trade: Cabinet Maker
Join Date: Mar 2006
Location: Portland, Maine
Posts: 14,746
Rewards Points: 2,040

Re: Client Steals Subs From GC.


A little mean, but it is business. You are SOOL. An attorney is only going to cost you money. Time to move on and learn a hard lesson. Sorry.
__________________
If you correct your mind, the rest of your life will fall into place ~Lao Tzu

SalmonFallsCabinetry.com

Salmon Falls Cabinetry on Facebook
Kent Whitten is offline  
The Following 3 Users Say Thank You to Kent Whitten For This Useful Post:
chris klee (03-23-2014), Jaws (03-23-2014), wallmaxx (03-23-2014)
Old 03-23-2014, 07:57 AM   #7
The Ultimate Wire Hider
 
tedanderson's Avatar
 
Trade: A/V & Home Theater Installation
Join Date: May 2010
Location: PG County MD
Posts: 4,455
Rewards Points: 2,116

Re: Client Steals Subs From GC.


The interesting thing about big corporations is that they have lawyers who are always running the scenarios to determine what they can "legally" get away with. Trust me when I tell you, they've already figured out every move that you can possibly make and they have every single counter measure ready in case you decide to take action against them.

But the one thing that you have that they don't have is that relationship. The first time that one of your subs doesn't show up for a job and/or doesn't answer his phone, the next person that they are going to call is you. That's where you'll be able to use your leverage if you even decide to do business with them again.

As unlikely of a scenario this seems be, they always call you back. There is a reason why you are the contractor and they are the subs. As a GC you have the ability to replace and mobilize more subs if a sub calls out sick or has some other issue that prevents them from getting on site. People who want to cut out the middle-man don't quite understand this until they get left high and dry.

To this day, I have a nagging former client who decided that she wanted to deal with my sub "Joe the plumber" directly. But every time Joe doesn't show up as promised or he does damage, she expects me to do something.
__________________
I'm always looking for the answer to my troubles at the bottom of a paint can.
tedanderson is offline  
Old 03-23-2014, 08:04 AM   #8
I own stock in FotoMat!
 
480sparky's Avatar
 
Trade: 132 on Bush, I've got him at gunpoint!
Join Date: Jan 2009
Location: Iowa
Posts: 12,266
Rewards Points: 12,664

Re: Client Steals Subs From GC.


"Your" subs? When did slavery become legal again?
__________________
This post has been modified from its original version. It has been formatted to fit this screen and edited for content.
480sparky is offline  
The Following User Says Thank You to 480sparky For This Useful Post:
Jaws (03-23-2014)
Old 03-23-2014, 08:11 AM   #9
Working
 
Cole82's Avatar
 
Trade: GC
Join Date: Nov 2008
Location: Cedar Rapids, IA
Posts: 4,131
Rewards Points: 2,276

Re: Client Steals Subs From GC.


IMO you messed up. You have no legal action they found some one cheaper to do the job and like 480 you don't own your subs they can work for who ever.

Cole
__________________
The boss of awesome
Cole82 is offline  
Old 03-23-2014, 09:01 AM   #10
KemoSabe
 
loneframer's Avatar
 
Trade: residential framing/siding/general carpentry
Join Date: Feb 2009
Location: Vineland, New Jersey
Posts: 14,233
Rewards Points: 12,218

Re: Client Steals Subs From GC.


If I were in "your" subs position and you told me "Hey, s#!t hit the fan and I have no work for you, nor can I promise you anything in the near future.", I would mind "my" business and do what is necessary to feed my family and myself, as I have done several times in the past.

"Your" subs are not employees, they are business owners and business is business. If you think their actions are unethical, you have the right to disassociate yourself from them in the future. This may or may not be in your best interest.

I've been down that road with GCs who believe I owe them my life because they fed me work for X amount of years. Well, they fed me work because I offered them the best value for their dollar, otherwise, I wouldn't have been doing their work.


Just a quick thought. What would you have done if the company said to you "Listen, we're willing to keep you on, but we need you to release all your sub-contractors and use "our" subs."? Would you have been loyal to them?
__________________
__________________________________




"Walking the fine line between production and perfection"




__________________________________
loneframer is offline  
The Following 3 Users Say Thank You to loneframer For This Useful Post:
chris klee (03-23-2014), Jaws (03-23-2014), tedanderson (03-23-2014)
Old 03-23-2014, 09:11 AM   #11
The Ultimate Wire Hider
 
tedanderson's Avatar
 
Trade: A/V & Home Theater Installation
Join Date: May 2010
Location: PG County MD
Posts: 4,455
Rewards Points: 2,116

Re: Client Steals Subs From GC.


Quote:
Originally Posted by loneframer View Post
I've been down that road with GCs who believe I owe them my life because they fed me work for X amount of years. Well, they fed me work because I offered them the best value for their dollar, otherwise, I wouldn't have been doing their work.
Very good point!
__________________
I'm always looking for the answer to my troubles at the bottom of a paint can.
tedanderson is offline  
Old 03-23-2014, 09:22 AM   #12
Pro
 
Anti-wingnut's Avatar
 
Trade: Commercial Superintendent
Join Date: Mar 2009
Posts: 2,940
Rewards Points: 3,430

Re: Client Steals Subs From GC.


You had one customer and no employees, only sub-contractors? It was inevitable that at some point, somebody in your customers organization was going to question your role, and what you did to earn your keep.

There's no question of ethics anywhere here, either with your subs or your customer. You got lazy and greedy until the market left you high and dry.
Anti-wingnut is offline  
Old 03-23-2014, 09:40 AM   #13
Pro
 
Patsfanindallas's Avatar
 
Trade: General contractor
Join Date: Aug 2013
Location: Dallas
Posts: 411
Rewards Points: 522

Re: Client Steals Subs From GC.


Jesus, you guys are gonna make him jump off a bridge. I'm sure the point is taken that he doesn't own the subs, and working for 1 client wasn't a great move. This is the part of the movie where you let it go, adapt your plan, and build back up. To quote rocky " it's not how hard you can hit, it's how hard you can get hit and keep moving forward. That's how winning is done.-compressed version.
Patsfanindallas is offline  
The Following 2 Users Say Thank You to Patsfanindallas For This Useful Post:
Jaws (03-23-2014), jlewis480 (03-23-2014)
Old 03-23-2014, 09:41 AM   #14
Particulate Filter
 
Metro M & L's Avatar
 
Trade: Flooring
Join Date: Jun 2009
Location: Portland, OR
Posts: 4,430
Rewards Points: 1,484

Re: Client Steals Subs From GC.


I think the only way you could have played it would have been to lie to your subs and start your own closet company. Compete with the old chain until you make it or they buy out tk get the market and the subs. Better still was to have built your company prior to this issue. Hindsight and all that. What do you want yojr new company to be?
__________________
"A smart man learns from his mistakes; a wise man learns from the mistakes of others."

www.portlandhardwoodrefinishing.com
Metro M & L is offline  
Old 03-23-2014, 09:50 AM   #15
Pro
 
BCConstruction's Avatar
 
Trade: Construction
Join Date: Jun 2009
Location: Roanoke, VA
Posts: 16,392
Rewards Points: 2,394

Re: Client Steals Subs From GC.


Sounds like they did you a favor. When you hear the words "Prices dropped and volumes doubled" then its not long before your making nothing for working your ass off.
__________________
www.bcconstructionllc.com
BCConstruction is offline  
Old 03-23-2014, 10:04 AM   #16
Registered User
 
JTECo.'s Avatar
 
Trade: General Building B Class
Join Date: Mar 2014
Location: San Francisco Bay Area
Posts: 17
Rewards Points: 10

Re: Client Steals Subs From GC.


Lesson learned I guess... The subs did sign non-compete forms and non-disclosures but I guess at this point it's useless because it would be totally against their favor. Plus I'm sure everyone here is on point with me only having 1 client. Onto the next venture it is....
JTECo. is offline  
The Following User Says Thank You to JTECo. For This Useful Post:
mikeswoods (03-23-2014)
Old 03-23-2014, 10:11 AM   #17
Pro
 
Anti-wingnut's Avatar
 
Trade: Commercial Superintendent
Join Date: Mar 2009
Posts: 2,940
Rewards Points: 3,430

Re: Client Steals Subs From GC.


A non compete was probably never legal in this case in the first place:http://californianoncompete.com

Secondly, a contract is not a suicide pact. You have no work, so there is no legal justification for you to force your contractors to not work either.
Anti-wingnut is offline  
Old 03-23-2014, 10:23 AM   #18
Registered User
 
JTECo.'s Avatar
 
Trade: General Building B Class
Join Date: Mar 2014
Location: San Francisco Bay Area
Posts: 17
Rewards Points: 10

Re: Client Steals Subs From GC.


Although the major retailer also had me sign a non-compete/non-disclosure too
JTECo. is offline  
Old 03-23-2014, 10:26 AM   #19
I own stock in FotoMat!
 
480sparky's Avatar
 
Trade: 132 on Bush, I've got him at gunpoint!
Join Date: Jan 2009
Location: Iowa
Posts: 12,266
Rewards Points: 12,664

Re: Client Steals Subs From GC.


Quote:
Originally Posted by Patsfanindallas View Post
....I'm sure the point is taken that he doesn't own the subs......
You'd be surprised how many think they DO. And not just own the subs, but the customer and all future work as well.
__________________
This post has been modified from its original version. It has been formatted to fit this screen and edited for content.
480sparky is offline  
The Following User Says Thank You to 480sparky For This Useful Post:
chris klee (03-23-2014)
Old 03-23-2014, 10:41 AM   #20
Pro
 
Patsfanindallas's Avatar
 
Trade: General contractor
Join Date: Aug 2013
Location: Dallas
Posts: 411
Rewards Points: 522

Re: Client Steals Subs From GC.


Quote:
Originally Posted by 480sparky
You'd be surprised how many think they DO. And not just own the subs, but the customer and all future work as well.
yeah that's a whole other thread there. While I'm well aware that subs are free to do whatever they want, I will say this. If my customer solicits them and they don't tell them they have to speak to me, they won't be my sub anymore. If they do work for one of my customers down the road without contacting me first, they will no longer be my sub. Just as they are free to do whatever they want, I'm free to protect my customer base.

Advertisement

Patsfanindallas is offline  

Tags
advice , client , contractor , dum ass , steals


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
new general b in SoCal looking for subs. JSM_CC Help Wanted or Looking For Work 4 05-16-2014 05:26 AM
Trouble getting subs to respond? daniels General Discussion 43 12-06-2012 11:38 AM
A New Book "For Dummys" Idea, How to be a Reasonable Client. JTemple Painting & Finish Work 27 11-27-2012 11:22 PM
Pay subs after customer pays? rtztgue Business 60 07-24-2011 09:47 AM

Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for
PROFESSIONAL CONTRACTORS ONLY!

At DrywallTalk.com we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created www.DIYChatroom.com DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?