The Non-Compete Agreement

Charles Mahaffey

March 2005

Before I get into the subject here, I need to state that I am not an attorney, and I am not attempting to provide any legal advice in this article.

A non-compete agreement can come in many flavors; however, they rarely focus on what job you hold. Instead, they tend to focus on keeping you away from either your employer's customers or competitors.

Non-compete clauses are often included in employee contracts that an estimator might sign when starting their job. These clauses typically prevent the employee from later working for competitors within a specified time and geographic proximity to the hiring company, or from performing a specific function within the new company. The fear is that these employees will take with them knowledge that can be passed along to competitors.

An estimator who ignores the non-compete agreement and eventually goes to work with a competing company can be sued for breach of contract. The new employer could also be sued for interfering with a contractual relationship between the former employer and its former employee.

This is an issue that must be considered by the employee and employer as well. The business owner must decide if there is a need to protect their company from an estimator who could leave and take a substantial block of business with him. The employee must consider what the impact might be on his earning potential if he were to leave an employer to which he is bound to a non-compete agreement.

I don’t believe the non-compete agreement is enforceable in every state. So, before you begin to draft an agreement, and certainly before you sign an agreement, you must know the laws of the state in which you conduct business.

In the number of years that I have been in the business, I have heard numerous horror stories from the business owner who did not have the protection of a non-compete agreement with an estimator. Conversely, I have also heard about the estimator who left the employ of a company that did have an enforceable agreement in place, only to find that he had to move out of the state to get a job.

Recently, a business acquaintance told me that one of his estimators left the company and took jobs that the estimator had bid while working for them. To make matters even worse, the estimator took some of the key field people to his new company. The impact to this small contractor was devastating! What recourse would you have as a business owner if this happened to you?

As a business owner, it takes a lot of time, hard work and money to develop a successful business. The last thing you want to do is provide a job to someone who might eventually take everything he has learned at your company (and with your money), and use this as a tool to steal business from you in the future.

As an estimator, you need to give strong consideration to the language used in a non-compete agreement. If the language is just too binding, you might want to try to negotiate more favorable terms.

About the Author
Charles Mahaffey is president of Accuest, LLC, Marietta, Ga., Accuest provides estimating and consulting services for commercial drywall subcontractors.