Going Out on your Own in Cabinet Installation

      A skilled and responsible employeed for cabinet installation sub ponders the practicality and ethical issues involved in going solo and competing with his present employer. February 12, 2009

Question
I am in the northwest. I’m young, in my mid 20's, and have been installing casework as an hourly employee for six years. 95% of my installation work is commercial. Every once in a while I do a residential job. I install for a handful of shops. The shop sizes vary from 200 million a year, to 6 million a year. A lot of my installs are prevailing (government funded) wage jobs - I put it at about 75%. The average wage for me in the northwest is around $27 an hour. I want to sub for myself. Doing the work is not a problem, breaking away from an asphyxiating boss is.

I have been offered other opportunities for sometimes double my income, but I am loyal. I am at a major cross road in my life right now. How do I go about getting work from the same companies I work for now - just cutting out the boss, without stepping on toes? I know this is a fragile situation, and I am an honest person and do not want to cause problems. Any advice, answers and/or questions would be helpful.

Forum Responses
(Cabinet and Millwork Installation Forum)
From contributor D:
I would give him two week’s notice that I was leaving and when my two weeks were up I would walk out the door. It's a lot like a break up or leaving home. Sometimes they go well and everyone leaves as friends, sometimes they are acrimonious and nobody speaks to each other for five years. Once you are out of his employment it is perfectly ethical to go after the same clients. He might not like it but there is nothing wrong with it. It may be more comfortable for you to go after some different clients to start, it's up to you.

I have a great relationship with one of my ex-employers. He has a much larger operation than mine I go to him for advice or to pick up a carpenter from time to time and he throws work my way that he is too busy to take. I also help him out on the tools from time to time when he is in a jam. He tells me the door is always open if I want to come back.



From contributor P:
I don't think it's perfectly ethical to quit and two weeks later go after customers from a former employer. You have inside information on pricing, scheduling and contacts and you are using your former employer's relationship with that customer to gain access to that customer.

You may also have the issue of having signed a no-compete agreement when you took the job you have now. These aren't always enforceable, but even if they're not, let your conscience be the guide. Also, word spreads. What happens if a year from now things aren't working out like you planned and you have to get another job doing what you're doing now? That reference from your former employer might not be too favorable.

Personally, having been in a similar situation, I'd branch out on my own but I'd stay away from my former employer's customers until I'd become established on my own and allowed for at least a year or two.

Another thing to consider is that your current employer might be in the position to throw you some work. If you're out there deliberately chasing clients you were servicing a few weeks before under their name, then I doubt that's going to happen.



From contributor U:
If there are as many shops as you say, why go after your employer's clients? I'll bet if you can get your foot in the door and you do good work, you'll be overwhelmed with work - without infringing on your former employer. Never burn bridges if you can help it. It's a small world. Down here in Nashville it's tough to find good installers.


From contributor E:
$27 an hour average for installs? Wow, I'm in the wrong part of the business.
Many people on here always seem to think in terms of the right way or ethical way to do things. The bottom line is you have to do what's best for you. If that requires stealing clients then go for it. That's business, it happens every day, and it's happened to me. Everyone does it in some form or another. I do not think no compete clauses are of a legal binding, and I think they must state that in a employee contract, although it may be in very small print somewhere.


From contributor V:
I don't know US law (I'm Canadian) but I always thought non-compete clauses are only enforceable in cases of proprietary intellectual property. An example is if you are an engineer or executive working for a company that developed a unique product or service. I don't see how anyone can legally keep you from plying your trade as a carpenter or any other common trade or service. That makes you a second class citizen whereas the engineer or executive has been paid to develop a specific product or service and their employer owns the rights to that service.


From contributor P:
Like I said, a no-compete agreement isn't necessarily going to provide a legal recourse for the previous employer. A lot will depend upon what state you're in and what your exposure was to the customer you're trying to woo away. If it's a customer that he had no exposure to, then it's likely that nothing could be done. If it's a customer that he had extensive exposure to and he knows the details of contracts and whatnot, then in a number of states he could be opening himself to a lawsuit by attempting to take that business.

At any rate, by signing a no-compete agreement you are basically promising to not use privileged information to take a customer away. Whether it's legal or not is for the court to decide. Whether your promise means anything is for you to decide.



From contributor A:
If I were offered to double my income with another firm it would take me exactly five seconds to offer my boss the opportunity to match or exceed the offers I'm getting, or I would leave on the spot and would be calling his current clients on my cell phone hustling work before I leave his parking lot. I don't see anything wrong with it.


From contributor C:
Are you installing casework from you present employer shop or does your present employer have an installation company? This would make a difference in the way I would handle it but when it comes down to it whatever is best for you.


From the original questioner:
I work for a sub as an hourly employee. He gets the install contracts from these cabinet companies.


From contributor G:
I hope you realize the commercial mill work/case work community is small and word gets around fast. Also do you realize that actually fastening the material is only about ten percent of the deal? Ins, bidding, tools, payroll, taxes, comp, sub meetings, scheduling, and coordinating with other trades are just a few more things. Be prepared to quadruple your workload just to get the same amount of work completed and billable! Also, let's not forget the stress of meeting deadlines when employees are sick or slow or quit and go after your contracts. It may not be your fault, but it is your responsibility!


From contributor I:
I really don't believe most of these posts. His boss cultivated relationships with these cabinet shops, pays him well and this guy is asking if it's ethical for him to steal business from his employer.

Come on people. How would you feel if an employee went after your customers? He has every right to strike out on his own, but not at the expense of his boss. If you do go after your boss's customers, watch out, because you don't know the repercussions.

Do yourself a favor and go out and hustle and get your own customers. Maybe then you will appreciate your boss and the job he provides you with. It's a lot easier to make it in theory than in real life. All the trade magazines only tell you about the successful companies not the ones that fail. The trade magazines are in the business of advertising machinery so beware.

Lastly, what makes you think that they will leave your boss for you? If you go on your own and get your own customers, then I wish the best of luck to you.



From contributor Z:
Here is an idea that you should consider seriously. Get your contractor’s license and then talk to your employer about working the same job but on a contract basis. That way you determine what amount you will get paid and whether he agrees or not. You don't take away business from him since you will still work for him as a contractor doing the same work. The boss you have now will still be telling you what they want but you both can say yes or no.

This is often a win-win situation. You take away the bosses responsibility to cover you with employee benefits thereby saving him that money. You determine your wage by factoring in your overhead and add to that the hourly amount you want to earn. The boss will have another advantage since he will know the cost of the work you do in advance and can easily factor that into his bid to the customer.

The downside is you will have to cover all the benefits you are getting as well as insurance that the boss may require. This is business. If you are ready to make the change to be your own boss, there are hassles you don't have now but you will be more in the driver's seat if you are good at being in business for yourself. It's not as easy as it might seem and not everyone likes it. I've been licensed for 23 years and I can't imagine punching a time clock again.



From contributor L:
I think if I were in your shoes, I'd sit down with my employer, ask him his views on the situation, and come to a reasonable agreement. It might be he doesn't care if you bid against him. The two of you might agree that you don't compete at all for a specified period of time, or maybe you pay him a fee or percentage for any work you get from someone who you've worked for while in his employ. If there's as much work as you claim, and if you're as good as you claim, there'll be plenty of work out there whether with existing clients or new contacts. You'll do fine.


From contributor S:
Any boss who has an employee with great skills and can run a job knows he would stay around forever unless he is treated respectfully and paid well. Even then, some get the itch to see if they can do it by themselves. I go along with the idea of talking to your boss. He has had this talk with others in the past. Hopefully he will offer you more if he thinks you are worth it or help you with info about going it alone.



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