Non-compete

[timm]

Hi all.

Any lawyers out there willing to offer some free advice? . Ok here is the deal - my daughter (who has been struggling a bit) found a job working as a liaison between nursing homes and social workers and their clients. She essentially helps people find long term care facilities and the social workers put her in contact with the individuals that need a place.

About 3 months ago they stopped paying her. She is on commission and is an independent contractor. (1099). Reasons were plenty 'having trouble making payroll...waiting on a re-finance to go thru etc. well after 3 months she quit and decided she would work on her own so she started her own business. Well now she is getting harassed by her former company because she signed a non-compete (michigan). They are threatening to sue her unless she stops working in the state of Michigan for a period of 2 years in this industry.

There are no trade secrets involved here. Simply social workers giving referrals to her as they did before.

What do you think? Would a judge uphold this? Should she sue them for lost wages and expenses? she is flat broke right now because of her business startup expenses as well as the monies owed her by this other company. Thanks. Tim

 

[Gordon Gray]

timm,

If she signed a "non-compete" clause and is in violation of that agreement, what's the issue?

Not wanting to rain on your parade. Just a reality check.

Best,

Gordon

 

[twich54]

having been part of those arrangements myself in the past I know for a fact there are a lot of 'gray' areas, being an independent contractor is one of them. regardless, I'm not a lawyer (Thank God !!) but the fact that they did not pay her, supposed breach of contract / and you cannot stop one from a making a living I would suspect you would have a case.

Tim, if her former 'contract' employer seems serious you then need to seek out legal counsel…..good luck !

 

[Kevin]

I'm not a lawyer, but my industry uses non-compete agreements and I have heard many stories about them. It may differ in each state, but usually a non-compete agreement can't force you out of a given industry, it's only to protect current clients or trade secrets of the business. Usually a judge will look at whether or not the contract is 'reasonable', and to say you can't work in that field of business seems unreasonable to me, like Dave said, you have a right to earn a living. In my work, the non-compete agreements are so hard to enforce, that some businesses don't even bother with them. Clients lists are usually protected information, due to privacy laws, even without the agreements. She might be in trouble if she is taking a list and calling the clients, or in her case perhaps the social workers. But if the social workers happen to find out she has a business, and start referring to her, that might not be protected by the non-compete, at least from what I have seen here in VA. If she is being contacted on her own, because her contacts now know she has a business and like going through her, or getting clients by means not related to her former employer, I would imagine she has a very good case, especially due to her not getting paid by the employer threatening the law suit.

 

[timm]

thanks guys -- I absolutely KNEW you guys might have something to say on this topic.... Here are some new things I found out ....

1) person that signed the contract is an INDEPENDENT contractor - not an employee... and this individual has a competing business in the state. He is listed as 'Vice President'.
2)The contract is 3 pages... Only signature is on last page... The page she signs just basically says she has an agreement as an independent contractor and is not elligible for any employee full time benefits. Pages are not numbered and no page continues on to the next. They FORGED her initials (printed initials - not italics) on the other pages... These happen to be the pages with the non-compete etc...
3)Who are the clients -- the social workers (referral source) - or the people that pay the $$$ and are placed in nursing homes.... She has had no contact with clients - per se... and yes, she has told the social workers that she has a business and has left her other position... they then refer to her because they like her. The social workers get no $$$ or benefit from the company - only that they have a client being found a place.

So.... these are the issues I am having with it...

 

[churchill]

I agree that non-competes can be very ambiguous but she still would be due her back wages for the last three months!

 

[timm]

I agree Churchill... Expenses and wages exceed the amount for small claims.... So, if she wanted to try to get everything -she would have to get an attorney etc.... Again - it is just really an issue of paying for that... the costs and the stress related....