non compete?
I am a salon owner. I have spent thousands of dollars promoting stylists. Recently one of them went across the street to work on her own. My fear is that other employees will follow. If I do not a non compete agreement with this stylist. Can I do anything legally?
1 answer | asked Oct 20, 2005 10:11 PM [EST] | applies to Arizona
Answers (1)
Without a non-compete, competition is what you get
An employee owes a duty of loyalty to her employer while she is employed. But once the employment relationship ends, the former employee is free to compete in the marketplace.
There are several ways employers try to limit the effect of competition from former employees, but none of them guarantees that you will keep business from leaving with an outgoing employee. Anti-piracy agreements are intended to prevent a former employee from soliciting customers of your business. They also may contain language that prevents a former employee from luring away other employees. Non-compete agreements prevent a former employee from engaging in the same business within a certain geographic area for a limited period of time. Without geographic and time limits, noncompete agreements are unenforceable, because they prevent a person from engaging in her profession. The problem with any of these agreements is that they do not bind customers. In a salon business, many customers become loyal to a particular stylist and are likely to leave when that stylist leaves, regardless of the agreement you may have with that employee. Those who come because of location or other factors are more likely to remain customers. A non-compete agreement that is properly written may keep your employees from opening shops across the street, but that's about all you can expect to accomplish.
posted by Francis Fanning | Oct 21, 2005 12:16 PM [EST]
An employee owes a duty of loyalty to her employer while she is employed. But once the employment relationship ends, the former employee is free to compete in the marketplace.
There are several ways employers try to limit the effect of competition from former employees, but none of them guarantees that you will keep business from leaving with an outgoing employee. Anti-piracy agreements are intended to prevent a former employee from soliciting customers of your business. They also may contain language that prevents a former employee from luring away other employees. Non-compete agreements prevent a former employee from engaging in the same business within a certain geographic area for a limited period of time. Without geographic and time limits, noncompete agreements are unenforceable, because they prevent a person from engaging in her profession. The problem with any of these agreements is that they do not bind customers. In a salon business, many customers become loyal to a particular stylist and are likely to leave when that stylist leaves, regardless of the agreement you may have with that employee. Those who come because of location or other factors are more likely to remain customers. A non-compete agreement that is properly written may keep your employees from opening shops across the street, but that's about all you can expect to accomplish.
posted by Francis Fanning | Oct 21, 2005 12:16 PM [EST]
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