Contending with noncompete agreements

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July 21, 2022

Jerry Schappert

Jerry Schappert

In my 37 years of being in the pest control industry and working for several different firms, I have never signed a noncompete agreement. And as a pest control company owner since 1993, I have never asked anyone who works for me to sign one, either.

That said, as my company continues to grow, there are more and more customers whom I’ve never met, and couldn’t tell you much about. They see my company as their technician, the person they built their relationship around, the person they trust to leave their house key with, the person who knows their dog’s name and where they keep the treats, the person who lends a sympathetic ear in time of need.

COMPANY PROTECTION

So, what would happen if I sold my company — or a technician left my company and started their own business? What if the technician goes to a competitor, and suddenly a number of customers change to the other company? That’s certainly the downside to avoid in this otherwise-rosy scenario.

A noncompete agreement is supposed to protect an owner from losing clients or proprietary information when an employee leaves. Usually, a time limit and even a geographical area is set in which the employee who leaves your firm cannot compete against you. It is a contract, and the owner is free to put almost anything in it, leaving it up to the employee to accept or deny its terms. However, declining to sign usually means employment is terminated, so it might be wise to not be so strict that you lose a valuable asset — your employee — for something that may only be a possibility in the future.

EMPLOYEE PUSHBACK

Usually, noncompete agreements are signed within the first few days of employment. They are just shuffled in with a lot of other papers, so the agreement is executed with hardly a fuss. The new hire gives it little to no thought.

Sometimes, however, these contracts are presented well into a technician’s career. When this happens, it often brings sudden feelings of mistrust, resentment and uncertainty. Technicians may wonder why they are forced to sign now, and whether they will lose their jobs if they don’t. Suddenly, a great technician is feeling uncertain about the future, and seeds of doubt are planted. It becomes a lose-lose proposition.

There are valid reasons for noncompete agreements, such as:

  • When a company is growing, the owner may want to shore up any cracks in company policies.
  • If an owner is entertaining the thought of selling, potential buyers may want such agreements in place.
  • Having a new hire sign an agreement early can help the owner weed out employees who plan to use the job merely as a springboard.

At the end of the day, it’s completely up to ownership, but I’d caution owners to weigh the pros and cons of such a contract.


The Pest Cemetery Crew

“Noncompete agreements should protect the business, not hinder an employee’s growth/opportunity.”
— Chaz Estrada, Sales Representative, Veseris, Riverside, Calif.

“We can’t stop employees from working in the field should they leave us. The noncompete agreement is not aimed at denying livelihood; rather,
it protects assets belonging
to us.”
— Charles Wilcox, Owner, Patches Pest Plus, Brandon, Miss.

“I’ve signed noncompete agreements and honored them. It was my word on the line. I used to have my employees sign them, but I realized it’s just as hard to go after my accounts as it is to make a sales call.”
— Keith Romer, Owner, All Pro Pest Control, Layton, Utah

“A noncompete agreement presented at the time of hire gives you a great idea how serious
a candidate is.”
— John Shishilla, Co-owner, Honor Services, Melbourne, Fla.

About the Author

SCHAPPERT is owner of The Bug Doctor, Ocala, Fla., and administrator for Facebook industry discussion group Pest Cemetery. He may be reached at bugdoctor@embarqmail.com.

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