The Anti Compettition Story

Over the coming days and surely into months I will continue to update the story of the "little company that couldn't." This small firm who believes they actually own the rights to an entire industry has damaged many lives. The CEO of this firm actually takes time everyday to follow up on this former employee and then make calls to anyone he thinks the employee is doing business with. At that point he harrasses and aggravates the contact with disparaging remarks about the former employee.

To gain some perspective the former employee was a telephone solicitor. A marketing position, pure and simple, now once again here is the restrictive covenant that the small firm is attempting to hammer the former employee with in the courts:

“Employee agrees that during the term of this agreement and for a period of 24 months from and after the date of termination for any reason of this agreement (the restriction period), he will not directly or indirectly, own, manage, operate, join, control, be employed by, be engaged on an independent contractor basis, or participate in the ownership, management operation, or control of, or be connected or affiliated in any manner with any individual, corporation, partnership, or any other entity, that is engaged in business directly or indirectly competitive to the then existing or COMTEMPLATED business of the company within the United States (which shall be the restricted area) Employee further agrees he shall not in any fashion, form or manner; either directly or indirectly, solicits the customer’s or PROSPECTIVE customers for employee’s own account or on the behalf of any individual or entity during the restricted period.

For future reference lets refer to the small firm CEO as "Mr. Dick" and the former employee as "trying to make a living" of course we are protecting the identities as not to have Mr. Dick continue filing more trivial lawsuits. You see Mr. Dick keeps a $400 hr law firm on retainer and he lives in the courts as he loves to antagonize and harrass. The $400 law firm wrote the contract for Mr. Dick and they seem to believe that Mr.Dick has some form of legitmate business interest to protect. To give one an idea of what Mr. Dick considers to be trade secrets: public lists of licensed financial reps for cold calling are trade secrets for Mr. Dick. He contends that any former employee who makes any marketing calls for any purposes in any industry to these publicly available prospects is in breach of contract. So far the courts have ignored this simple concept. But one needs to understand that "trying to make a living" cannot afford any attorney and is therefore forced to represent self. The courts don't like this as the fraternal order of attorneys is slighted if an individual could actually defend themselves successfully, it sets a bad precedent. Not trying to make a living is all for having an attorney, but trying to make a living can't make a living because Mr. Dick seems to think that anything trying to make a living does is in breach of Mr. Dick's contract. See the conundrum here.

Mr Dick wins all these suits because former employees like trying to make a living are not earning enough to afford a proper defense and they ultimately end up in default so Mr. Dick wins the case by forfeit. PS. Mr Dick files a lawsuit that asks for no damages, so trying to make a living has to defend a case that is seeking zero damages, but if trying to make a living loses case he is liable for Mr. Dick's legal fees. So when the default judgment comes down the defendnat who did nothing wrong ends up paying zero in damages and has to pay $100's of thousands in Mr. Dick's legal fees.

Mr Dick enjoys this game and wouldn't want anyone to know who he is. If his clients knew that Mr' Dick was lawsuit happy, many would think twice before signing any contract with him. But the reality is Mr. Dick never holds clients to contractual agreements even when clients don't honor Mr. Dick's contract. This is because Mr. Dick's clients could actually afford attorneys and they could drag Mr. Dick through the courts for a long period of time.  No, Mr. Dick only goes after former employees who basically are marketing telephone solicitors who can't possibly afford to defend themselves against Mr. Dick.

Stay with us for the continuing saga of Mr. Dick sticking it to trying to make a living!

What are your thoughts about an employer attempting to enforce this type of contract in today's economic scenario?

When is competition not allowed?

In the US an amazing part of the open market and entreprenurial growth has been the concept of open competition. Business is not a zero sum game. The I win you lose mentality in business has been outdated since the late 60's. Imagine having a former employer use the following non-compete to stop any an all efforts an individual might have to earn a reasonable living:

“Employee agrees that during the term of this

agreement and for a period of 24 months from and after the date of termination for any reason of this agreement (the restriction period), he will not directly or indirectly, own, manage, operate, join, control, be employed by, be engaged on an independent contractor basis, or participate in the ownership, management operation, or control of, or be connected or affiliated in any manner with any individual, corporation, partnership, or any other entity, that is engaged in business directly or indirectly competitive to the then existing or COMTEMPLATED business of the company within the United States (which shall be the restricted area) Employee further agrees he shall not in any fashion, form or manner; either directly or indirectly, solicits the customer’s or PROSPECTIVE customers for employee’s own account or on the behalf of any individual or entity during the restricted period.

Look closely at this paragraph and realize that it is not from a Company which is in a specialized field nor a company that has any proprietary intellectual property to protect. This company is a services related small business who basically markets into a cold call market place with over 10,000 potential clients and 750,000 contacts who are publicly available at any time to anyone's finger tips.

So, if an individual invested in a company that provided similar services (there are literally thousands of companies that provide these identical services) that individual would be in breach of this contract. Notice the "participate in ownership" wording. If the individual did any work as an independent contractor he/she is liable for breach of contract.

The best part of this wording is the "that is engaged in business directly or indirectly competitive to the then existing or CONTEMPLATED business of the company within the United States. Contemplated covers a wide arena of possibilities which can be defined as anything the individual might do is a breach of this contract. If this company decided to get into the meat business then the former employee would be in breach of contract by working at McDonalds.

Lastly the most intriguing part is that this "business" if googled would cover every one of the following industries: Financial Services, Insurance, Investments, Advertising, Public Relations, Research, Consulting, Marketing and Sales. All these industries are out of bounds to the former employee as they are competitive to the employer according to this restrictive covenant of the contract.

Here we are in an economy that is falling apart and people are begging for jobs and yet there are small business owners out there so fearful of competition that they would deny former employees the right for almost any gainful employment. Proprietary intellectual property is one thing, basic sales and marketing is truly non protectable. Certainly existing customers should be protected and no one should be able to poach on existing customers. Yet even retail wirehouses and Insurance companies are not so limited with their versions of non-competes. One should notice that this language includes solicitation of the companies PROSPECTIVE customers. Therefore any prospect in this arena is off limits. Not to mention that this business couldn't possibly even handle 1% of the overall marketplace it is involved in it wants to protect 100% of the marketplace.

What are your thoughts about an employer attempting to enforce this type of contract in today's economic scenario?

"I am the Happy Panderer"

Years ago while in grammar school we were taught the song "I am a Happy Wanderer" and it is most fitting that the Obama administration is the "Happy Panderer". Daily the talk is how partisan politics are the villain and yet the Obama administration professionalizes partisanship. Sort of combination of the playground bully blended with the kid who takes his ball home if he doesn't get his way. Is Congress a problem you bet they are! Is this President a leader? You bet he's not. In the last two weeks at every stop in his campaign (I know it’s not a campaign, it only looks like, walks like and smells like one) he came giving gifts. First he visited with the Veterans Administration and handed out 128M worth of tax incentives to hire Vets. Nice in theory but we all know this was simply an attempt to buy a voting bloc. This week he goes into Iowa and announces increase on small business loans for rural businesses. Mo money and more attempts to buy votes.




What we need is some real leadership and not political pandering. The greatest panderer of all accuses the other side of playing politics and somehow there are people who listen to this rhetoric and can't seem to see the hypocrisy in it. Sadly America has lost its high road, it has lost its identity and a great deal of its value. This has happened due to poor leadership in Congress, in the White House and at the grass roots of America. It is time for common sense and a commitment to excellence. We must stop throwing money at problems such as Education, and public welfare programs. We must get back to productivity and incentivize for excellence! We must raise standards and make people accountable to the desire for achievement. We must stop letting the panderers buy our votes. Stop taking the easy handout, as it is never free and most of the time it is the most costly road to disaster. Take back the pride in being an American, hold the government to standards of excellence and stop letting these weak willed individuals protect their wallets and power. Make these leaders lead, make them be accountable to their constituencies and lead America back into greatness, stop letting them BUY their way out of responsibility and accountability for their actions.



In short be Americans and just say no to the Panderers of this world. We are too good for this.