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How do I word my Non Compete Contracts?

A question submitted to Spas2b:

I may be hiring a relative of one of my good friends. She is currently a therapist and has a clientelle. How can I protect myself if she decides to leave? How should I word the contract that she cannot ask my clients to follow her when she leaves? If I don’t do this now, it could be a disaster for me later on.

 

Our Response:

This may also be referred to as Non-Solicit or Geographical Contract.

In this kind of agreement between the Employer and Employee, the Employee agrees not to compete with the Employer in a similar business after leaving their employ, as well as stating that the Employee is not allowed to solicit customers or staff from the previous Employer.

The Agreement usually specifies the period of time in months or years that the arrangement will be in effect, as well as geographical limitations, or radius in which the former Employee cannot enter into a similar business as an Owner.

These contracts are created to deter employees from gathering knowledge and experience at your Spa to then use it to open their own business up the street.

To ensure this contract is legal and binding, involve your lawyer and know your rights. This contract must be developed with reasonable restrictions, otherwise it will not hold up in a court of law. A reasonable time scope (the period of time in which they are prohibited to open) may be between 1-3 years. A reasonable radius may be 5-10 kilometres, but know what’s viable and acceptable in your area.

You must always consistently enforce the contract with any and all offenders; otherwise the courts may rule that you “waived” the contract by not upholding it.

 

Getting this contract, and others in place, is good thinking on a Spa Manager’s part. 

If you are looking for more on Staff Contracts, including working templates, our Special Report on Staff Contracts will be very helpful to you. 

 

About Leslie

Spas2b Inc. is a full service Spa Development company, specializing in Online Spa Management Distance Learning Courses, Spa Business Manual Instant Downloads & Resources, and Spa Consulting Services.
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