I work for a non medical home health care facility here in South Dakota; I have had 30 years of experience in health care and decided to form my own company. In our local newspaper last Sunday I had a small article which promoted the beginning of my business venture to provide non-medical assistance to folks in their homes. It will be about the same as what I am currently doing now with my employer. My employer apparently saw this and is making noise in a round about way through other people that I signed a non-compete clause. I am working a very few hours for my employer while I get my business up and going, but I do have plans to meet with some potential clients next week. I most likely did sign a con-compete clause and am wondering how I should proceed from here.

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Originally Posted by SDGrandma

I most likely did sign a con-compete clause and am wondering how I should proceed from here.

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Hello Grandma:

Well, you've got to get some certainty. IF you signed a non compete agreement, you need to get a copy and see what specifically you agreed to do.

There's a LOT to do afterwards, because many non-compete agreements aren't enforcable - and others are.

So, check back in when you can tell us what it says. Certainly, your boss isn't hiding the agreement from you, is he?? Clearing the air with HIM would be the first place to start.

excon

If you signed a non compete clause then consult an attorney. The wording of the clause matters.

But if you are leaving your current employer to set up a competing business, he can probably stop you. On the other hand if he fired you, and starting your own business was the only way you could work, he might not be able to stop it.

I called the boss who told me that a copy of the non-compete clause was in the mail. When it arrived there was a highlighted section which stated that employees agree not to solicit, divert or take away or attempt to divert, solicit or take away, the business of the employer. I got on the phone and clarified whether I have been fired or whether I will be allowed to work until I decide to quit. The boss said I could work until I quit. I very firmly told him that I have no need and have not been soliciting business from them. I believe for now things are OK, but may want to wrap things up with them asap.

Is your employer the only such service in the area? Does the clause include a time frame?

If there are other services in the area, I think you may be OK. If it's the only service in the area, then I think you may have to wait awhile after you quit before you can startup. Because you would clearly be diverting or taking away the business of the employer. Even if you do not target any of his customers, you would still be interfering with his business. And you clearly cannot enter into an arrangement when any current or previous customer. This means you have to ask every customer whether they have ever worked with your previous employer.

I would definitely consult with an attorney on this. The business you can be very litigious. So I would not think of entering such a business without lining up a lawyer to advise me.

Hello again, Grandma:

I have another take than my friend Scott. I think the agreement will NOT be enforceable. First, it has no timeline. You cannot be precluded from competing FOREVER. Second, it gives no geographical area where the agreement may or may not be enforced. You can't be precluded from competing in the next town. Third, it prevent his customers from working with you, even if they want to. They can choose to work with you if it's upon THEIR motion. Fourth, if there's ANY confusion in the agreement, and there appears to be LOTS, should a lawsuit be instituted by him, the tie will go to YOU - NOT the guy who WROTE the agreement.

You don't need to confront him about this information. In fact, if there's going to be any confronting going on, it's going to be HIM that does it.

In my view, you cannot operate your business based upon the confines of this agreement, so I wouldn't even try. It WILL be challenged, and when it is, hire a lawyer.

Better yet, visit one now and see if he confirms what I'm telling you.

excon

While I don't disagree with excon, I didn't think you were posting the full and exact text of the pertinent section. That's one reason I asked about a timeline.

If there is no expiration, a lot may depend on the local judiciary. If your boss is friendly with the powers that be in your area, they could hold that clause enforceable for a reasonable amount of time. So lets say if you didn't open your business for 6-12 months and he sued, he mignt not win, but if you opened immediately. He might.

If you were to practice in another geographical area that should be OK, but I don't think the clause would be deemed unenforceable just because it lacked a timeline or geographical limitiation.

And while you can't be blamed if his clients come to you, it would still open you up for a lawsuit which could become expensive even if you win.

There are perhaps four such non-medical home health agencies operating in the city where I live. The approximate population is 150,000. In the no-compete clause there is a time frame of three years after termination with the company not to solicit clients of the company. But now they are already aware that I have started my business. What they don't know is that I have no clients. I have called an attorney and will make an appointment to visit with him.

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Originally Posted by SDGrandma

But now they are already aware that I have started my business. What they don't know is that I have no clients. I have called an attorney and will make an appointment to visit with him.

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Hello again, Grandma:

Sounds like you've patched up the temporary rift with your boss. He doesn't have to know anything more about your business than he already does know. Hopefully, there's enough business you can take from the others without violating your agreement...

After all, it's not really a non-compete agreement. It's a "don't steal MY business" agreement. Wouldn't it be cool to finance your new business working for your competitor?

excon

That is exactly what type of an agreement it turned out to be after all. At any rate both of your comments helped very much. I will keep everything in mind. Thank you!

I figured you weren't telling us everything the clause said. But, I think you will be safe as long as you don't take clients from him. I still think you need to check everyone who comes to you to see if they have worked with him. If they have I would shy away or, at least, get a signed statement that they came to you and you didn't solicit their business in any way before you do work with them. Its called CYA.