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RE: Contracts for Woodworking Employees3/28/19
What kinds of employment contracts are available for woodworking employees to sign, in order to protect your product line and avoid employees from competing against your business, or taking your product to another shop?
With the lack of woodworkers in today's world why would you want to put something in place that would put a wedge between an employee and management? Did you invent some proprietary product that only you know how to produce? IMO focus instead on offering a quality working environment and these types of things will take care of themselves. Offer a clean shop, proper tools & equipment, a fair wage (to include a benefits package) and there wouldn't be a reason for anyone to take your "product line" to another shop. You don;t state in your post what it is that you manufacture, so maybe you are involved in some top secret projects that need to be protected, but in general, woodworking is woodworking. Take care of your employees and they will take care of you.
Non-compete clauses are notoriously hard to enforce, even if your state allows it. Some do not. Burden of proof is on your shoulders. Is your gizmo or process patented or patent pending? If not, I wouldn't bring an NCC into the picture. It sets the wrong tone for your relationship to your employees.
What Jarred said.
Do you think it be worth litigating?
If you have proprietary processes, custom made machines, means and methods, and copyright or trademarked designs you can enforce non disclosure agreements.
If you can see the product in Walmart and make it in any shop you can't protect it.
We do a lot of contracts that require NDA and the NDA passes to the employees.
If you are selling casework to xyz gc, there is no protection there.
If you are selling a custom design to a non related industry that 95% of us could not find in a few hours you can protect that customer.
We used to make an integrated podium with A/V components and custom A/V software for a A/V vendor that completed the units for a software company and they (the software company) didn't want anybody having the same setup so that customer was under a NDA and we could restrict use of that knowledge.
I have a lot of experience in this area. Jared is correct it’s very difficult to enforce. I’m in a very conservative state (Ohio) and I have been in court when the judge point blank said “you cannot keep a man from working period”. They will almost always side with the worker and the more complicated a NCC is the more a skilled attorney can argue it. A skilled litigator will argue over what color the sky is and bill you at $500.00 an hour for weeks.
The best thing to try and do if you want to go down this road is to try to protect your customer base. Courts have historically been more favorable to this. Employees are exposed to your customers directly and get to know them much better then you can possibly imagine, doing side work etc for them. Your only chance is to try to get a reasonable list of customers (not everyone in the city) and go at it that way. Forbidding any contact with them for a period of 1-5 years. Never seen anything over one year enforced.
Put copy right information on your drawings that helps a lot. The slimy builder will take your old drawings and sell off them expecting the new woodworker (your former employee) to build from those drawings which he or she already knows very well.
It will slow them down but not stop them, if they are continuing to use your exact designs which they will do then call your attorney you have a legitimate bitch there. Otherwise courts traditionally will not stop a person in our competitive work environment from working.
I respectfully disagree with Tommy though; employees have absolutely no loyalty when it comes to money in my part of the country. They will leave you in a minute and take as many accounts with them as they can. I have seen this over and over again. No amount of employee love will stop it. Taking someone’s book of work or even one or two big accounts will more then be enough work for a start up one man shop and builders at both the residential and commercial level do it every day it’s sad really.
Best of luck to you
All contracts are only as good as what you can afford to defend. $300/hr legal fees add up quickly!