Hey Gary! Non compete agreements are legal if they are used reasonably and fairly. Many times we ask that one be signed after at least 30 days so that the new hire can experience for themselves that we are a fair couple a' righteous dudes to work for.
Typically they will state that upon termination of employment (whether we let 'em go or they quit) that they agree to not seek employment or business ownership that is in direct competition with our company for a surrounding radius and a specific amount of time. Typically within 60 mile radius for 3 years or 5years.
This will help protect your assets. We all have stories of how we invest our time training and teaching and exposing guys to our trade protocols and specifics such as how and what we charge ultimately to be personally responsible for training our future competitors. Not to mention flooding our local market with more wood floor guys driving our trade price further down.
I wish all of my competitors here used them. I'm tired of all the fresh meat out there who fancies himself a floorman after 6months employment with 'em creating hacks and taking jobs out of our market.
Trick is to be an honorable person yourself. If you are fair and honest with your journeymen they will reward with loyalty. (at least it looks good on paper
)
Also you need to include a penalty clause about what your recourse is should they be caught working for your competitor or becoming your competitor. Some use a penalty per job instance or a percentage of profits to go to you (and your lawyer
)
There was an article on the subject in HWFloors Magazine 6 months to a year ago.
FYI - there are several places in California where they do not allow certain types of Non compete agreements so please check your local district (call a local attorney)
I have to say if this intrests you I would recommend spending a little dough and having an attorney draft one for your company. I'm looking into having the one we spent ten bucks on Legal Zoom.com revamped by a lawyer to include a prety stiff recourse and make sure the local laws are cool with it. We had a guy who signed an agreement then a few months later quit (I knew all along his desire was to become self employed) and go after sq. ft. dollars as a pre-fin installer and has approached a couple of our clients
We haven't made any moves yet but they are comming. He had mentioned that he wanted to move to Denver and have a trade to help him earn money when he gets there .... well he hasn't moved yet and he just installed a pre-fin for a builder we worked for last Summer (I did a drive by on the site and sure 'nuff he was rackin' and whackin') ... I think its about time for him to get a letter (cease and desist) from an attorney or move out of my work area and stop taking dinner off my table.
I hear Denver is lovely this time of year...
Check 'em out if you wish I hope you fend them helpfull.
Will