Non-Compete clause?? Did you sign one?

[RkyMtnHI]

Hey all,

 

one of the things that has come up over the past couple of weeks is the issue of a non-compete clause. Only one school in the area is asking their instructors/employees to sign one, and i believe this is a new thing for that school. My attorney says it's not binding here in Colorado and actually somewhat ridiculous, but i'm wondering about other states and other schools.

 

so, the questions: did you ever sign one? would you ever sign one? what do the rest of you think?

 

i guess it depends on the situation, but from an employers point of view i just cannot think of doing that to people, especially kids that have leveraged their future to pursue their dreams.

 

aloha,

 

dp

[Wally]

They don't work in my state for anything but management positions, and hard to enforce even then.

I'd have to ask why the company requests a non-compete. It often seems to be intended to reduce turn-over.

One is morally obligated by any promises made, but there are defensible reasons that nullify any contract.

[rick1128]

Hey all,

 

one of the things that has come up over the past couple of weeks is the issue of a non-compete clause. Only one school in the area is asking their instructors/employees to sign one, and i believe this is a new thing for that school. My attorney says it's not binding here in Colorado and actually somewhat ridiculous, but i'm wondering about other states and other schools.

 

so, the questions: did you ever sign one? would you ever sign one? what do the rest of you think?

 

i guess it depends on the situation, but from an employers point of view i just cannot think of doing that to people, especially kids that have leveraged their future to pursue their dreams.

 

aloha,

 

dp

 

Normally you only see these with persons that have knowledge of propriatory information, which usually means management or scientific employees. It sounds like the company is trying to keep instructors from moving to other operators.

[PhotoFlyer]

My employer didn't have a non-competition clause, I didn't have a contract at all. However, they had a non-competition paragraph in the employee handbook that was legally enforceable since Montana is an "at will" employment state. This means that an employee can quit at any time for any reason (or none at all) and the employer can terminate the employee at any time for virtually any reason (not race, sex, religion, etc) or for none at all.

 

My current employer stated in training that they no longer ask pilots to sign a training contract or non-competition agreement since they are virtually unenforceable. Louisiana is also an "employment at will" state and employees can quit, or be fired, for any reason or none at all at any time, with or without notice.

 

I see this as a flight schools tactic to prevent an employee from taking revenue away from the school, intentionally or unintentionally. Look at it like this: Student X comes to school for ground and is told it costs $50/hr. Student X offers flight instructor (who is earning ~15-20/hr) $40/hr for ground school. If the instructor accepts they are able to earn significantly more per hour than they do "at work," but now the school is losing money. If Student X decides to buy his/her own helicopter now the school is out even more money. Therefore schools ask instructors to sign these agreements to prevent a loss of revenue.

Edited May 23, 2009 by PhotoFlyer

[RockyMountainPilot]

It definitely is enforceable if you are an employee. In fact, you don't even need a signed one to seek damages and possibly prosecute. Just as Photoflyer mentioned, an employee could circumvent their employer to make more money. As an employee, you are obligated by law to conduct yourself in the best interest of that company. If you work for a company and call their clients to offer your services during off hours for a lower price, you are stealing from that company. That company spent the money to bring that client in, not you.

 

After you terminate employment, you can do whatever you want. Only if you have been given proprietary information can you be bound to a sign agreement after employment. However, proprietary information can include a client list.

[JDHelicopterPilot]

Something simular for me but not related to a school, if I want to pick up a second job in the industry I just need to get "permission" from my current employer. Not a big deal, mostly to prevent pilots from working "part time" at a competiters program which I would have no intention of doing anyway.

 

JD

[Helipilot08]

I have had to sign non-compete clauses with previous employer's. Usualy it was because I was going to be given training, privliges, or access to information that would be of great value to competitors in the industry in which I was working. This is also a way for a company to explore every avenue to protect itself from spending the time, money, and other resorces on an employee only to have that person take the knowledge and experience to a competitor. If I was lucky enough to complete training and get offered a position with the flight school doing my training I would sign a non-compete clause without thought. I wouldn't take such a thing as an insult, as much as a documented way the employer is trying to protect the business and in turn, my job.

[RkyMtnHI]

I have had to sign non-compete clauses with previous employer's. Usualy it was because I was going to be given training, privliges, or access to information that would be of great value to competitors in the industry in which I was working. This is also a way for a company to explore every avenue to protect itself from spending the time, money, and other resorces on an employee only to have that person take the knowledge and experience to a competitor. If I was lucky enough to complete training and get offered a position with the flight school doing my training I would sign a non-compete clause without thought. I wouldn't take such a thing as an insult, as much as a documented way the employer is trying to protect the business and in turn, my job.

 

 

i got that, but the key word i saw in your post was "employer" which leads me to believe that in that job you were an employee. most instructors i know of are sub contractors and thus would not be subject to the same laws or regs as employees.

 

dp

[MileHi480B]

Non-compete clauses in Colorado are only enforceable if someone holds a management position and has proprietary information and even then, they must be limited in scope (meaning time and geographic area).

 

Courts are reluctant to enforce non-competes under any circumstances due to their restrictive nature and possible desperation one may have been under when signing it (unemployed, etc.).

 

Some places have even written in employment contracts that a portion of their salary was actually being paid to them in advance as compensation for the period of time they are bound by the non-compete. Clever ... but probably would be shot down in court.

[fry]

i got that, but the key word i saw in your post was "employer" which leads me to believe that in that job you were an employee. most instructors i know of are sub contractors and thus would not be subject to the same laws or regs as employees.

dp

 

Any flight school that would treat its instructors as independent contractors is the kind of corner-cutting low-ball operation that would try to intimidate its workers with a required non-compete agreement.

 

Only in the rarest of circumstances would an instructor working for a flight school qualify under the IRS rules as an independent contractor. And why would the instructor want to? As an independent contractor he has to come up with about 15% in payroll taxes when he files his 1040 at the end of the year. If he is an employee the school would pay half the payroll taxes and the other half would be withheld from his paychecks.

 

If you work for a company that does treat its employees as ICs wait until you leave and then tell the IRS the company did not pay your payroll taxes. The school will have to pony up both their half and yours.

[BOATFIXERGUY]

so, the questions: did you ever sign one? would you ever sign one? what do the rest of you think?

 

Never signed one...ever. Never had any students or employees sign one when I had a company.

 

We're talking about schools here right? I understand why someone may want to have them. A CFI taking students away is a bad deal. But if a company is doing everything right, the students won't want to leave.

 

Now for regular commercial ops, you do see them around. The pilot is out in the field making contact with the customer(s) everyday. They (the pilots) have been known to show some bad ethics by setting up their current employer so they can steer them (the customer) towards a "better" outfit (usually one in which they have a stake in). My advice is to NEVER put yourself into this situation. It will almost always spell disaster for you at some time in your flying career.

[jehh]

Courts are reluctant to enforce non-competes under any circumstances due to their restrictive nature and possible desperation one may have been under when signing it (unemployed, etc.).

 

You might be surprised...

 

You may not agree with what happened below, but courts can and will enforce non-compete agreements. Eric Rush didn't agree with it either, now he is in jail. I would love to be a fly on the wall if he ends up before the same judge again after he gets out. Judges do not take kindly to contempt of their court.

____________________________________________________

 

http://www.dallasnews.com/sharedcontent/dw...ha.3cf3f42.html

 

Instead of dancing with the stars, Eric Rush is dancing behind bars. Teaching the cha-cha sent him to the slammer.

 

Last week, a Collin County district judge ordered Mr. Rush to serve 30 days in the county jail for contempt of court after violating an order prohibiting him from teaching dance lessons within 25 miles of a Plano dance studio.The jail sentence is the latest step in a 10-month legal tango featuring a studio that says it's protecting its business and a former instructor who says he can't imagine life away from the dance floor.

 

Mr. Rush's former bosses at Arthur Murray Dance Studios said the dancer violated terms of a non-compete employment agreement. By teaching near the studio, they said, Mr. Rush could undermine their "competitive advantage."

 

Mr. Rush acknowledged he tap-danced around the law and violated the court order, but he said the 25-mile order is too restrictive.

 

"I love to dance; it's my soul," the 37-year-old said from jail this week. "It's been one of the callings of my life. I still want to teach. I want to eat. This is what I've been doing for years. I just want to make a living."

 

Attorney Anne Terwilliger said that her client, the dance studio, tried hard to avoid going to court but that Mr. Rush wasn't willing to comply with the non-compete clause.

 

"Mr. Rush certainly reaped the benefits of having extensive training by world-renowned experts," Ms. Terwilliger said. "He violated the agreement and did not fulfill his end of the bargain. ...

 

"All the company has tried to do in this situation is simply protect its rights and to enforce legal obligations."

 

Court documents show that Mr. Rush, whose dancing name is Eric Romero, worked at Arthur Murray in Plano until December. He said he was fired, but Ms. Terwilliger said he made his own decision to resign.

 

Weeks after Mr. Rush left, the studio went to court, saying that Mr. Rush had violated the employment agreement by creating a Web site advertising his work, posting Craigslist notices offering his services and contacting Arthur Murray students.

 

The studio's co-owners, Claudia and Zack Knoche, could not be reached for comment Friday.

 

District court Judge John Roach Jr. ordered Mr. Rush to discontinue any Web sites, quit soliciting Arthur Murray customers and refrain from working with area dance studios until the end of 2009.

 

But Mr. Rush tripped up in September.

 

In a court affidavit, a customer says Mr. Rush taught her the cha-cha and other moves at Tango & Cha Cha's dance studio in Dallas – in defiance of the court order.

 

The customer says Mr. Rush talked with her about posture, eye contact and "connecting with other people on the dance floor." They danced to "I Left My Heart in San Francisco," the affidavit states.

 

Mr. Rush said he kept teaching because he has a passion for dancing.

 

"It's part of who I am," he said. "If it means confronting me and imposing fear in me, bring it on. I'm in jail now. What more can you do?"

 

Doug Magary, Mr. Rush's lawyer, said the Knoches are treating Mr. Rush as if he's stolen Coca-Cola's secret formula.

 

"They're killing a fly with a bazooka," Mr. Magary said. "They've gone to such extreme lengths ... to put one person who's a lowly dance instructor out of work."

 

Ms. Terwilliger said the dance studio pursued the matter in court because of Mr. Rush's "continued violations, his refusal to comply with the terms of the agreement he had entered into and the court's orders."

 

Mr. Rush is as graceful off the floor as he is on it, waxing philosophical about his craft. Dancing is spiritual, and dancers create magic, he said.

 

"It's about two people, kind of meeting in a common place and finding the same rhythm of life," he said. "It means healing. It means grace, serenity, elegance, sex appeal. It means ambition and drive and achievement and confidence."

 

Mr. Rush acknowledged he could teach in cities such as Arlington and Fort Worth and still obey the court order. But the Plano resident said that's too far away, considering the cost of gas and the shaky economy.

 

Mr. Rush shrugged off the idea of not cutting a rug. After he gets out of jail, he hopes to keep dancing and teaching.

 

For now, though, his dance uniform is a bright red jail jumpsuit.

 

Even a jail sentence hasn't stopped Mr. Rush from groovin'. He taught another inmate the bachata, a Latin-inspired club dance move.

 

But he quickly emphasized:

 

"I didn't dance with him."

[RkyMtnHI]

Okey dokey,

 

interesting read, ok not really. :-)

 

once again, the difference between "employee" and "subcontractor" come up. so, i guess once again i have to ask the uncomfortable question:

 

how many of you worked or work as a subcontractor while instructing, and how many as an employee??

 

is it even legal to be a subcontractor while teaching at a flight school? i realize that there is a fine line and would like to know what is right.

 

the schools around here do it both ways.. the smaller schools have employees and pay insurance on them which seems to be the right way to me.

 

please let me know what you think,

 

dp

[mechanic]

Only if you have been given proprietary information can you be bound to a sign agreement after employment. However, proprietary information can include a client list.

 

Well, maybe you can sue the previous owner for their clients not staying with you after the purchase of said business. I had a guy trying to sell me his business and clients. I said ya right...

 

I have left my job of 15 years. The owner keeps driving by my new shop to check on me. He just hired a salesman from another dealer just a few blocks away and he left that same dealer to buy into the current business he is at now, which is JD. JD corp had a trade in program a few years ago for a certain kind of tractor from Brand X. Don't think JD ever was sued over that.

 

I am glad my dad owned auto shops/gas stations/parts store's while I was still living at home to get free training. I recieved my professional training from the USAF and a local Jr College. They would have a hard time proving they made me a mechanic after coming to work for them.

 

I can see the schools side of it though. I have people coming in wanting info on equipment and a few in particular that have side jobs buying and selling used equip. They want me to basically train them for free and give them special deals on parts so they can make money too. I am in the repair biz not training academy biz....esp not a free academy.

 

You can sue whomever you want for anything in the USA with the right lawyer.