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Three different non-compete agreements were getting very confused in a very long thread the other day about a sub stealing substantial add on work from a gc that introduced the sub to the customer.

Since non-competes are an important topic that comes up often, each type of non-compete agreement is worth understanding and separating from the others.

There is a legend that they are unenforceable but that is sometimes but often not true.

State laws differ and their level of enforceability of each differs substantially from the others.

Three types of non-compete agreements are between...

1. buyer and seller of a business.
2. employee and employer
3. sub and gc

business sale - In NY state I am aware of buyer seller agreements being upheld. The timeframes listed were 2 years to 5 years and for a 25 to 50 mile radius.

employment - In NY I am aware of a former employee going into competition with his employer. (chiropractors) Former employee lost lawsuit and moved out of state.

contracting - Not aware of any of these outcomes but there are concepts worth discussing

A. A clause that says all inquiries about additional work for customers introduced to sub by gc shall be immediately turned over to the GC. Sub shall refrain from soliciting, discussing, bidding on or performing any additional work outside the scope of this sub-contract for customer without the express written permission from gc to sub. Any violation of this clause shall result in compensatory damages of the full amount paid to sub of any additional work performed for customer by sub plus full legal fees for gc to enforce this clause.

B. Asking for a reasonable agreement with your subs not to back door you with customers you introduced them to is very significantly different from the reason most non-competes are defeated which is C.

C. Non-competes are defeated with the reasoning the enforcer can not deny the enforcee the ability to make a living. Since the sub is free to pursue work in the same market with any prospect other than the GC's customers that were introduced to the sub by the gc, that would hardly be denying the sub the ability to make a living. I believe the case would prevail for the gc at least up to the point of any profits realized and legal fees.

The nuances are critical to grasp, clearly worth noting and may differ widely from state to state.

I posted a similar clarification in the other thread but it was buried at the end of a very long 150 plus thread and thought the subject deserved it's own thread.
 

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Kowboy
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My wife, a CSP, was nearly hired to run the safety on a coal-burner shutdown. It got down to the wire, but the pay wasn't there and the non-compete was a non-starter.

Joe
 

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A. A clause that says all inquiries about additional work for customers introduced to sub by gc shall be immediately turned over to the GC. Sub shall refrain from soliciting, discussing, bidding on or performing any additional work outside the scope of this sub-contract for customer without the express written permission from gc to sub. Any violation of this clause shall result in compensatory damages of the full amount paid to sub of any additional work performed for customer by sub plus full legal fees for gc to enforce this clause.

B. Asking for a reasonable agreement with your subs not to back door you with customers you introduced them to is very significantly different from the reason most non-competes are defeated which is C.

C. Non-competes are defeated with the reasoning the enforcer can not deny the enforcee the ability to make a living. Since the sub is free to pursue work in the same market with any prospect other than the GC's customers that were introduced to the sub by the gc, that would hardly be denying the sub the ability to make a living. I believe the case would prevail for the gc at least up to the point of any profits realized and legal fees.

The nuances are critical to grasp, clearly worth noting and may differ widely from state to state.

I posted a similar clarification in the other thread but it was buried at the end of a very long 150 plus thread and thought the subject deserved it's own thread.

I don't think you know what you're talking about
 
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