Non-compete hang-up

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Non-compete hang-up

Postby merlescuz on Mon May 26, 2008 1:58 am

Hi folks,

I've been wrestling with what to do about a new job opportunity, and hope some feedback from like-minded peeps will help.

Over the last several months, I have been talking with an owner of an NMT clinic in my area about working with her. She is really nice, a well-respected practitioner and has a great group of therapists working with her, including the instructor who runs all the local NMT classes....a built-in mentor!

I would be an IC, working for a 60% split, with linens and facilities taken care of for me, and with access to the gym where the clinic is located. I would need to spend time marketing myself (they have good marketing, and a strong client base, but until I was established I would need to get my face out there). Beyond that, my only responsibilities would be to be there when I have clients, and do good work. No Problem!

So I met with her last week to do paperwork processing; license and insurance certificates, sign employment agreement..... first mention of a non-compete clause.... The clause had lots of language protecting the clinic's client information, which I had no issue with at all, but there was a line that stated "no NMT or massage related work for a period of 1 year within a 10 mile radius of the clinic after termination". 10 mile radius means I don't work for a year!

My first response was to say I couldn't sign the contract with that clause in it. I told her that I was comfortable with the client protection language, and if the radius were smaller I could probably deal with it. We left it that she would check with her lawyer about making changes, but I left feeling less than optimistic.

I've talked with a number of friends and associates, all of whom state that non-competes are difficult and expensive to pursue, and that I should just go ahead and sign the agreement, if it's still available to me. It is tempting, since I feel this is a good place for me to be, and an excellent learning experience.

On the other hand, I hate the idea of signing something knowing that in the end I am going to have to do something illegal if I want to continue to work, and more importantly, that my career could potentially be hampered if things went sour and she decided to try to enforce the agreement.

Any suggestions?
Thanks in advance.
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Postby Ella Menneau on Mon May 26, 2008 4:51 am

I would definitely check with a lawyer, not your friends. That's what the business owner is doing---

Even though you are one person, you must treat yourself as a business, which sometimes includes the expenses of getting qualified legal advice. Perhaps if cash flow is an issue you could offer to barter with the attorney.
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Postby RelaxandRejuvenate on Mon May 26, 2008 4:57 am

Don't sign.

Non-competes are easy to enforce.

One of NoVA top spas has a similar non-compete - 10 mile radius. When it was first implemented, the spa owner sent a copy of the NCA/NDA to every spa she perceived to be a competitor. No one will even consider interviewing any of her technicians to avoid the potential hassles of a lawsuit. By being aware of the NCA, anyone hiring a technician is knowingly engaging in a violation of a contract, opening the spa up to be a co-defendant in any legal action.

A spa at the new hotel/convention facility in MD across the river hired one of the MTs, but upon receiving a copy of the NCA withdrew the offer of employment. Not only did the not want the hassle, they also did not want an employee who did not tell them they were subject to an NCA
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Re: Non-compete hang-up

Postby makingachange on Mon May 26, 2008 5:26 am

merlescuz wrote:I hate the idea of signing something knowing that in the end I am going to have to do something illegal if I want to continue to work, and more importantly, that my career could potentially be hampered if things went sour and she decided to try to enforce the agreement.


i think you answered your own question. regardless of legality either way (which is very important) - you have to be able to live with the decisions you make and know that they were the correct ones for you.

good luck!
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Postby cstbrian on Mon May 26, 2008 6:01 am

To some extent I agree with non-compete contracts, but in the lager picture I do not.

I managed a spa for two years. I never used a non-compete clause. All if the therapists had a private office within .5 mile of the spa. I simply asked them to not solicit clients from the spa. However, if a client seeks out a therapist outside of the spa, I have no control over that.

I think it is fair to ask therapists to not try to solicit clients while working for someone else as an employee or an IC. When working at a spa, therapists should not be talking about their private practice. I believe that to be unethical. And even if a client asks while at the spa, the employee/IC should reply with something about only seeing the client at the spa location. I believe this to be very fair.

What I think is horribly wrong are places (like you have stated) that say you can not make a living for 1 year / 2 years after working for them. That truly angers me. How can they have so much control over your career and income. How greedy can one possibly be? I understand that they do not want to lose clients but to do so by ruining someone else's livelihood is absurd. Again, I think it is fair for the contract to say that the employee will not see any spa clients in private practice for one year. But how can they possibly say the therapist can not work at all?

Now, also tied into all this, is my belief that the client has freedom of choice. Here's where things get sticky. If a therapist sees a client at the spa for several sessions, does NOT talk about any sort of private practice or work outside of the spa, and the therapist leaves the spa, I believe the client has every right to find the therapist for continued sessions. They have already established a therapeutic relationship and clients absolutely have free will of who they see for massage/bodywork. How can a spa possibly control who the client sees? Are they going to tell the client he/she can't go to another spa in town? No.

So if the therapist is acting ethically and not soliciting clients, I see there to be no problem with him/her having a private practice after leaving the spa.

I know there are a lot of 'ifs' in these scenarios; 'if' the therapist acts ethically, 'if' the client seeks the therapist ... But, if the spa is truly offering an 'experience' unlike one can offer in private practice, then the spa should not be concerned with losing clients.

When I left the spa to go back into private practice, about 50% of clients followed me. The owner was absolutely fine with me letting them all know I was leaving and where I was going. She understood the relationships I had built and that it was the client's choice. About half stayed because they liked having the steam room before a massage and a shower after. The spa didn't go bankrupt because of this. And I continued to refer people to them who wanted spa services or a service that I didn't offer. It maintained a sense of positive support between us; which from the 'law of attraction' point of view benefitted both of us.


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Postby Gaspen on Mon May 26, 2008 6:10 am

Although the place I work at has a non-compete clause, for whatever reason, it was never presented to me. I think the radius is 5 miles. I work in another city close to home and is outside the compete clause radius. One suggestion is that you ask the owner the reason for the clause and what type of space she/he is trying to protect against (ie, spa). What if you agree to a rider with a decrease in the radius and not to include private clients. Hope that helps.
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Postby Rose of Sharon on Mon May 26, 2008 6:18 am

I certainly would not sign it as is. I've seen someone cross out a line, initial that, then sign......the contract was accepted as signed. The owner did not have to accept it, but did. But I would never sign something that said I agreed to not work in my own field for a year!!!!

Never bringing up the (pretty extreme) non-compete clause and just waiting for you to find it (or not) when signing the contract may be indicative of how the business is run and how you will be "on your toes" constantly while there. It would make me wary all the way around.
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Postby makingachange on Mon May 26, 2008 6:22 am

Rose of Sharon wrote:Never bringing up the (pretty extreme) non-compete clause and just waiting for you to find it (or not) when signing the contract may be indicative of how the business is run and how you will be "on your toes" constantly while there. It would make me wary all the way around.


you know, that's a REALLY good point. i've learned the hard way, this year, about being up-front and NOT letting things slide. again, good point, RoS
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Postby Rose of Sharon on Mon May 26, 2008 6:28 am

Sadly, I have learned that the hard way, too. I'm sorry you have had such a tough year!!
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Postby cstbrian on Mon May 26, 2008 6:40 am

Rose of Sharon wrote:I certainly would not sign it as is. I've seen someone cross out a line, initial that, then sign......the contract was accepted as signed. The owner did not have to accept it, but did. But I would never sign something that said I agreed to not work in my own field for a year!!!!


I had a colleague/friend who interviewed at a spa. No mention of a non-compete until paperwork day. She said, 'I'm taking this to my lawyer before signing this.' She already had a private practice in the same city but was looking for more work part time at the spa.

She went back to the spa and said something along the lines of, 'I already have a private practice. I will not in any way solicit clients or tell them of my practice. If asked I will tell them they have to see me here at the spa, and if any get my private practice number I will explain that I will only see them at the spa.'

The spa owner thought that was very honest of her and decided it was fine for her not to sign the non-compete contract. She ended up being their most requested therapist.

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Postby merlescuz on Mon May 26, 2008 8:35 am

Rose of Sharon wrote:Never bringing up the (pretty extreme) non-compete clause and just waiting for you to find it (or not) when signing the contract may be indicative of how the business is run and how you will be "on your toes" constantly while there. It would make me wary all the way around.


I would like to believe that it was not that she was trying to be sneaky. She has just recently begun to expand the business, and, according to her, I am the first person to question this.

I appreciate all the responses, and am thinking a lawyer is the next move for me. Unfortunately, I did not take a copy of the contract when I left.
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Postby Patrick W on Mon May 26, 2008 9:28 am

you are the first person to question it? that is crazy!!

Anyway, I wouldn't sign that thing either. I could see signing something that says you wont soliciate her clients at her facility and try and steal them away. But, not being able to work with a 10mile radius. That is nuts!

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Postby Seattlesunshine on Mon May 26, 2008 11:22 am

10 miles is a lonnnnnnnnnnnnng way. don't sign it. I had one sprung on me last minute about a year ago. I negoiated it to a 1/2 mile radius which I felt comfortable with for a year. 10 miles is a crazy distance. And it sounds like you don't feel comfortable with it. Don't let someone take your power. Come to a middle ground or it wasn't meant to be.
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Postby RelaxandRejuvenate on Mon May 26, 2008 11:28 am

NCA that prohibit working for a direct competitor or starting a business in direct competition are considered reasonable.

Problem is, working for a clinic means a solo practice could be considered starting a business in direct competition, particularly if you offer NMT, which seems to be a distinguishing characteristic of this clinic.

Our spa employees can set up their own solo operations, but they can't start a spa or work for one of the other spas in town while the NCA is in effect.

You should probably ask to have it amended to allow you to start your own practice, perhaps with limits on what you can advertise.
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Postby AngEngland on Mon May 26, 2008 10:27 pm

Sounds like it was a blanket clause a lawyer probably put in without understanding everything about the ramifications of running a massage therapy business.

I would definately consider negotiating until you are comfortable with it and proceed from there. If you are unable to GET to place of comfort (and by that I mean total peace!) than re-evaluate! While you run away. **laughing**

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Postby pueppi on Tue May 27, 2008 4:44 am

You could go at it, like a business renters agreement.

Just mark out and initial the parts you don't agree with. See where it leads.

That's what I have done over the years when leasing office space. It usually works out fine.

I know it's a different scenario, but basically it's the same - there's a part of the contract you don't want to be held responsible for.

Oh, and make sure she initials the crossed out portion as well.
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Postby Ilovemassage on Tue May 27, 2008 9:48 am

I would also check with a lawyer. I don't think they can legally make you sign a non compete if you will be a subcontractor. I would check though.
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Postby Oly_LMP on Mon Jun 30, 2008 2:57 pm

I have had a few experiences with NCA, one outside of massage and one while working as a massage therapist.

The first one was when I was working outside the massage field. The NCA said that I could not work in my field for 5 years, at ANY COMPANY. So, basically there was NO way that I could earn a living if I left that company. I consulted with a lawyer and what he told me was that any NCA that prevents you from earning a living is deemed too broad. He even offered to represent me for free if the scum ball that put that clause into the contract came after me. It was great, the guy did send a letter (I heard latter that it was a form letter he sent to all former employees) explaining the NCA and how I can not work in my field. I called my lawyer and he said he would type something up and send it to the gentleman. It is amazing the power of a letter explaining the weakness of a contract when it is written on a law firm’s letterhead.

The second was a chiro that I worked for. I had talked with the law firm that represented the AMTA is Washington (the state) and they said that unless the NCA has both partied signature it does not exist. So, all of you that have had mythical NCA show up, unless you have signed it, it does not exist. So I give my notice and he brings up a NCA, I inform him that I have spoken with the law firm (they represent the chiro’s in our state also) and that since a NCA was never discussed, and was never presented to me to sign it did not exist, I also explained that in our state it is illegal for me to even tell the clients that I am leaving unless he expressly tells me it is ok for that client. There was a long process of figuring out what client belonged to whom, and if it was ok for me to tell them I was leaving and how to contact me. The good thing though is that he respected me for honoring the letter of the law and did not say a word to any clients he did not want me to.

I guess the moral is talk to a contract lawyer. They will be able to tell you the ins and ours of your state and what you can and can not do. From the situation you have described it sounds like the 10 mile radius might get them in trouble, because you would not be able to practice in the city you live in.
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