employee contracts

2102181 · March 2005

We need some teeth in our employee contract regarding an employee accepting a job with a customer. Our company sells and supports software for general aviation businesses. It takes 6-12 months at least to bring a tech up to speed to support and train a customer. We provide inhouse training, phone support, onsite training/installation, custom training, as well as accounting services. This is the bread & butter of our business. When an employee is hired by a customer not only do we lose money in having to hire and train a new employee, but we lose money from the customer who now has their own inhouse support and installation specialist.
Does anyone have any suggestions or sample contracts they would be willing to share that will protect us in this event? (including customer contracts)
Thanks.

Down_the_Middle · March 2005

Conceptually, I think you're talking about a non-compete clause in your contract that prevents the individual from working for a competitor within a certain mile radius. This is a pretty technical and legal issue that will need to be reveiwed by your local legal counsel. It's one thing to add language to the contract, it's another to have it be enforceable. The non-compete issue is getting harder and harder to enforce, so get some legal advice.

2102181 · March 2005

Thanks for the reply. I don't know if the "noncompete clause" would do it. They are not going to work for competitors, they are going to work for our customers. Maybe there is something I can put in a contract with our customers that could make them think twice before they offered my employee a job. It always seems to take place soon after an onsite training trip, and most always are the big guys that have 10-15 sites that need training or installation. We lose a lot of future revenue, as well as the expense incurred as a result of downtime due to having to train a new tech, and the stress on our other techs who have to take up the slack until the new tech is trained. We sure can't afford to tie them with golden handcuffs, or counter offer what some of these big guys are willing to pay.

marc · March 2005

Don't get hung up on the terminology - however, this is time to get counsel involved. You want to tie up both the customer and the employee, probably two seperate agreements/clauses to work on.

With respect to employee contracts, you might get a lot of input from this forum - lots of pros and cons to consider - still, legal counsel is a good way to go for this.

Kathy in Alabama · March 2005

I agree that a lawyer should be involved - even if it is for customers not competition. It is still a legal, "hold up in court" document you're hoping to enforce. A thought for you... since you are providing such in-depth, specialized training, maybe you should include in your employment contract a dollar value for the training. Include a repayment schedule if employment ends within a certain timeframe. Make your training value fair and your timeframe reasonable - keep on hand documentation as to how you came up with a good faith fair estimate for both. If your training has a market value of $5,000 and you decide 2 years employment is a fair trade for that on the job training and the employee quits after six months, they owe you $3,750. I'm just "brainstorming" - if you decide to include this please have a lawyer review this possible alternative to a non-compete agreement.

employee contracts

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