I have been employed as operations manager for a NC service company for 9 years. I operate and oversee the revenue for 3 of the company 4 branch offices. The owner and another manager operate and oversee the one branch office, which is also the corporate office. Logistically, the offices that I operate are between 60 and 120 miles from our corporate office in Raleigh.

The company was originally (when I started working there) owned by the Father of the family, and ran by 2 brothers. In July of 2005, the father and one son, fired the other son. A family dispute ensued. The father and majority owner of the corporation passed away in May of 2006, leaving controlling interest in the corporation to his Widow and 24 1/2 % to the remaining son in the business. His mother subsequently gave controlling interest to her son that remained in the business.

Before last April (2007), the company had provided 5 different services to commercial customers. In April, the owner dropped one of the services that the company was providing (just stopped doing it).

In May, 2007, he gave another entity of the business, the "Cleaning" business, away to the brother that was fired 2 years prior. This brother had started a "Cleaning" business of his own when he was dismissed from the company. His business philosophy was not to travel to far from the big cities for his work. In keeping with this philosophy, he has not serviced about 1/3 of the business that is in outlying areas, and just let it go to the wayside.

Fast forward to 3 weeks ago...

My wife started a cleaning company and has done very well getting accounts. Most of the accounts that she has gotten (99% of them) were NOT the accounts of the company at all.

When the owner of the company that I work for found out (I told him), he said that he has a non-compete with his brother and either my wife dissolve the business she started, or I can not work there. At one point, he offered that I could stay, but my wife would have to dissolve the business and I would have to sign a new non compete that would include family members and acquaintances...

Can he hold me to his non compete that I knew nothing about because my wife started a business?? Should I lose my job if she doesn't dissolve??

By the way, I have had no part in my wife's business. She started it, set it up and hired competent people to do the work (people who do not work for the company that I work for). I do have a non compete with my company but only for the services that the company "ordinarily provides". Which as of last May, no longer consist of Cleaning.

Thanks in advance for any help or suggestions

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Originally Posted by jobe052002

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When the owner of the company that I work for found out (I told him), he said that he has a non-compete with his brother and either my wife dissolve the business she started, or I can not work there. At one point, he offered that I could stay, but my wife would have to dissolve the business and I would have to sign a new non compete that would include family members and acquaintances.....

Can he hold me to his non compete that I knew nothing about because my wife started a business??? Should I lose my job if she doesn't dissolve???

...I do have a non compete with my company but only for the services that the company "ordinarily provides". Which as of last May, no longer consist of Cleaning.

Thanks in advance for any help or suggestions

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I don't see how the brothers' non-compete contracts would involve you. Yet, he says you can stay if your wife dissolves her business and you sign a new non-compete. That sounds like over-reaching. If you are an "at-will employee", you can lose your job at anytime, anyway. At-will employment - Wikipedia, the free encyclopedia

You are in an employment at will state - you can be terminated at any time for just about anything.

Not saying it's fair but that is how it is.

I agree with the at-will status of my employment, as director, I have used it a few times in the past (laid off people).

A couple more questions:

Is what he is asking my wife to do legal?

Can the owner sign an agreement without my knowledge that could effect my livelihood? Not that it would matter for employment with him, but if I leave, employment within my wife's company?

If there is such an agreement, and I was unaware of it's existence (and wording), would I or could I be legal bound to any agreement now or in the future to either brother?

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Originally Posted by jobe052002

I agree with the at-will status of my employment, as director, I have used it a few times in the past (laid off people).

A couple more questions:

Is what he is asking my wife to do legal?

Can the owner sign an agreement without my knowledge that could effect my livelihood? Not that it would matter for employment with him, but if I leave, employment within my wifes company?

If there is such an agreement, and I was unaware of it's existence (and wording), would I or could I be legal bound to any agreement now or in the future to either brother?

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More and more States are finding non-compete agreements to be illegal - people who have signed them find themselves terminated and unable to find work within the same industry. So that is always open to a court challenge. Of course, the court challenge itself usually kills your chance for employment within the industry.

It doesn't matter if what he is asking your wife to do is legal or not - the employer gets to make the rules. Distasteful as it may be your employer does not want your wife to "compete" with (apparently) his family. And you are in an employment at will State so whether it's legal or not does not matter.

Your employer could not legally have you sign an agreement which would involve an illegal act - for example, you could (obviously) not be required to steal a car. Anything else, you have the option of signing or not signing.

As far as your employer is concerned you have business info which would be helpful to your wife - whether you do or don't and whether it is or isn't, I'm sure that will be the argument. At some point I could see your employer suing you for some sort of disclosure of material facts, use of client list, something that has impeded their business and then you will be defending a very expensive lawsuit.

I think you can push this in Court - if you can find an Attorney willing to take the case - but see this as a no win/no win. If you win, you lose. If you lose, you lose.

(You and your wife had absolutely no idea that your employer had anything to do with the same industry your wife is involved in - ?)

So consult with an Attorney and turn your wife's business over to someone else to manage and have her stay out of it and see if that satisfies your employer - but I don't think it will.

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Originally Posted by JudyKayTee

(You and your wife had absolutely no idea that your employer had anything to do with the same industry your wife is involved in - ?)

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Me nor my wife had any Idea that "my employer had a non compete on behalf of the business" that I work for. A non compete for services the company no longer provides, and subsequently a service that the brother that does provide it (under his own company 100 miles away) has diminished the amount of accounts that he services in this area of the state.

I understand my non compete with my employer and it's for the services that we "customarily provide", and don't have an issue with maintaining that, my wife is not providing a service that my employer provides. But if I leave and decide to work with my wife providing a service that I do not have a non-compete with (because our company no longer provides that service), then I shouldn't be, nor should my wife, be bound by an agreement that we had no knowledge of, but my employer says he has.

Edit: I should add, my wife is providing a service that my employer use to provide over a year ago, but does no longer provide that service. I think I said that before.

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Originally Posted by jobe052002

... then I shouldn't be, nor should my wife, be bound by an agreement that we had no knowledge of, but my employer says he has.

Edit: I should add, my wife is providing a service that my employer use to provide over a year ago, but does no longer provide that service. I think I said that before.

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I believe your employer is over-reaching; perhaps he feels threatened or is just paranoid. I don't believe you or your wife are bound by anything, other than you could be fired.

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Originally Posted by jobe052002

Me nor my wife had any Idea that "my employer had a non compete on behalf of the business" that I work for. A non compete for services the company no longer provides, and subsequently a service that the brother that does provide it (under his own company 100 miles away) has diminished the amount of accounts that he services in this area of the state.

I understand my non compete with my employer and it's for the services that we "customarily provide", and don't have an issue with maintaining that, my wife is not providing a service that my employer provides. But if I leave and decide to work with my wife providing a service that I do not have a non-compete with (because our company no longer provides that service), then I shouldn't be, nor should my wife, be bound by an agreement that we had no knowledge of, but my employer says he has.

Edit: I should add, my wife is providing a service that my employer use to provide over a year ago, but does no longer provide that service. I think I said that before.

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If you feel strongly I would let them fire me and then take it up with a labor law Attorney. Otherwise there is no way to know. I have already told you what the legal argument on their side will be - depending on how far your employer wants to go they can subpoena records and require your wife's clients to appear in Court and outline the relationship, how it started, if leads or info from your employment were given out.

And, again, it comes down to employment at will. They have given you a choice.

I'm not saying what is moral or ethical - you asked legally what will happen and that is what I have answered. If you feel they are wrong and can do nothing, then you change nothing and see where it goes from here.

Hello:

You know it's a shame when the employee/employer relationship breaks down. Nothing good ever comes of it.

So, start by considering the fact that HE broke the relationship by confronting you. YOU and/or your wife did NOT break it. YOU and/or your wife violated NOTHING. YOU don't have a non compete agreement. Given the above, your job was toast the minute HE decided YOU and/or your wife was screwing him somehow.

Therefore, since you're no longer going to be employed there, I'd do two things, 1) I'd resign, and 2) I'd go into business with my wife.

No, you can't sue him... But, he can't sue you either.

excon

Don't get the wrong idea... me sueing him is not even a thought. I like the guy and would do the right thing, as I feel I have always done. He knows that also, which is why, to this point, the relationship has not broken down.

To him, it would obviously be easier if this would just go away by my wife dissolving her business. It kind of pisses me off that he would think that would be an option, since he no longer provided the service my wife does. Even though his brother does, I have no non compete with him, so it shouldn't matter as was stated here. That's what I was concerned about.

If I have to leave the company and join my wife's company, would I stop by and see my boss?. absolutely! I don't view this as "Im doing something wrong". I view it as circumstances for him that perhaps he can't change. I just don't want to be bull Sh$#ed into something I don't need to (i.e. my wife getting out of the business), or having something bite me in the future.

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Originally Posted by JudyKayTee

As far as your employer is concerned you have business info which would be helpful to your wife - whether you do or don't and whether it is or isn't, I'm sure that will be the argument. At some point I could see your employer suing you for some sort of disclosure of material facts, use of client list, something that has impeded their business and then you will be defending a very expensive lawsuit.

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Interesting point...

My (latest) non compete was signed after the company I am employed at stopped doing cleaning. But still states that I can not compete by providing the same services on my own. Really it's more of a "Do Not Solicit" than a non compete.

I have nothing of my employer's, that would indicate his customers, services or prices... NOTHING! Except what is in my head. But I'm (or may be) providing a service that he no longer provides.

Does that make a difference?

Again, keep in mind, 99% of the customers that my wife has gotten so far, are NOT THOSE of either my employer or his brother. She has taken 1 of his brothers account, but not because she knew about the account, she just solicited it like all the rest.

Also... Due to the one brother being dismissed from the company a few years ago, these two guys have absolutely no relationship at all!

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Originally Posted by jobe052002

Interesting point.............

My (latest) non compete was signed after the company I am employed at stopped doing cleaning. But still states that I can not compete by providing the same services on my own. Really it's more of a "Do Not Solicit" than a non compete.

I have nothing of my employer's, that would indicate his customers, services or prices..... NOTHING! Except what is in my head. But I'm (or may be) providing a service that he no longer provides.

Does that make a difference?

Again, keep in mind, 99% of the customers that my wife has gotten so far, are NOT THOSE of either my employer or his brother. She has taken 1 of his brothers account, but not because she knew about the account, she just solicited it like all the rest.

Also.......... Due to the one brother being dismissed from the company a few years ago, these two guys have absolutely no relationship at all!

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You have two choices - comply with their instructions or don't.

I see no difference in an employment at will State if your employer had said he doesn't want your wife to wear brown shoes and she should either stop wearing them or you would be fired. She doesn't, you get fired. AGAIN - not saying it's fair but you are in an employment at will State.

Either way come back and let us know how this works out.

Hello again:

I hope you would visit him.

I was employed as a breakfast cook in a brand new restaurant. In the space of a year, I created the best place to eat breakfast in town. We were jammed and making lots of dough, (well HE was, anyway). Don't get me wrong. I was happy there, and I really liked my boss.

Soooo, there was an empty restaurant in town. I leased it and brought my business with me. Now, I was the one making lots of dough. My old boss wasn't happy, but he was still my friend and I visited him regularly. Nope, I didn't do anything wrong either...

Business is business. However, business CAN be done WITH integrity.

excon

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Originally Posted by excon

Hello again:


Business is business. However, business CAN be done WITH integrity.

excon

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AMEN!!

Since your in the restaurant business (I'm in the restaurant service business) you are familiar with the cleaning service for which I speak. You also know that there are so many out there, that I don't need to step on any toes. But neither did my boss...

Well... I went in this morning (with anticipation of the inevitable). The owner came out from Raleigh and asked how my weekend was... I said it was good... He asked if I had spoke to my wife... I said I did, and the decision was made that she was going to continue. He said then you know what I have to do... I said I do...

We spent the next couple of hours talking to get him caught up on the regional issues and turned over all company property, credit cards, checking account, vehicles keys etc...

When we said goodbye we agreed to be friends and help each other... Then gave a friendly hug.

I feel good about the way it went, and look forward to the start of an exciting new adventure. In a meeting the owner had with my staff, he stated that he felt that he had just lost a good friend... but am glad that we will still be working together in the same industry, in the same towns.

Thanks to you guys for your input.

Most non-competes do not hold up also, I would not sign a new one. He can not force you to sign a new non-compete, and if you do he needs to compensate you for signing another one.

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Originally Posted by carroll02

Most non-competes do not hold up also, I would not sign a new one. He can not force you to sign a new non-compete, and if you do he needs to compensate you for signing another one.

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The OP has said he resigned over this so it's over.

I would like to know what State you are in that "most" non competes do not hold up and the employer "needs" to compensate the employee for signing a non compete.