I have recently been asked by a VA firm to do some Subcontracted work. I have my own, recently started practice that I'm working on building, and thought 'why not?'

Problem is, I was given a long, detailed contract to sign that also has a non compete clause. Here is the clause in question:

Contractor agrees that, during the term of this Agreement and for a period of twenty-four (24) months after its termination for any reason, Contractor shall not, within a twenty-five (25) mile radius of Company’s offices located in Springfield, Virginia: (i) hire, or solicit the employment or contracting of, any Company personnel, agents, or contractors directly or indirectly associated with Services; or (ii) solicit, otherwise offer to provide or actually provide to any Client, directly or indirectly (for instance through a contractor engaged by a Client), any Services, that are the same, similar or reasonably related to the Services provided hereunder, without the prior written consent of Company. The parties agree that a violation of the foregoing noncompetition and nonsolicitation provisions would cause irreparable harm for which there may be no adequate remedy at law..

Now, I don't expect legal advice. What I want to know is: A-has anyone else had to sign a non compete for subcontracting work and B-is this common practice?

My initial reaction was 'no way, this will chain me and basically shut me out of my entire business area for two years.' Am I wrong? Anyone else experience this before?

__________________
VersaTel Solutions
Need a second set of hands? I can help!

Hi, I dont really have any experience with the contract, but it seems to me that the contract is stating basically that if you agree to its terms, no matter how long you work with them, you will not be allowed to work or solicite any type of work from their company, employees, or anyone else affiliated with them 2 years following the completion/termination of the contract without their permission. This seems pretty harsh to me. It's like they want to own you and dictate to you how to run your business. You should revise the contract and modify any language that's not to in your best interests and/or pass on the opportunity. Please dont think I'm trying to tell you what to do, I just think they are being very unreasonable.

Just my 2 cents. I wish you the best in whatever decision you make.

__________________
Be Blessed
Michelle

As a subcontractor I won't mind signing a contract with this clause, however, two years is quite a long time. There's nothing saying you couldn't negotiate with them to change that part of the contract to less time.

Hmmm...it states "...a period of twenty-four (24) months after its termination for any reason, Contractor shall not, within a twenty-five (25) mile radius of Company’s offices located in Springfield, Virginia..."

This is a standard non-compete clause in contracts used all the time by bricks and mortar businesses in that it gives a mile radius of a certain location. Since we are virtual, I don't see how it could affect you. Unless you are going to be drumming up local business in the Springfield, Virginia, area (not sure how far Fairfax is from Springfield)?

I've had no problem signing contracts with a non-compete clause, but they have been such that I couldn't approach any clients that I worked with when contracted with the contractor VA for a certain amount of time - even up to two years.

I would advise the contractor VA to revise their contract to suit a virtual business if I was their attorney. In my opinion, it doesn't cover them legally for a virtual business. But, I'm no lawyer.

__________________
Jules, SunRise Virtual Solutions - WordPress Customization & XHTML/CSS Web Sites

I hire subcontractors to work with me. In my sub agreement, I also have a non-compete. I believe you will find many virtual teams that have a non-compete in their sub agreement. However, my non-compete restricts the sub from soliciting any of my current clients. I do not have a mile restriction. Not sure what your niche is. However, mine is real estate. If I put a 25 mile circle around Springfield, VA that would mean that I couldn't work with any realtors in a large part of the Northern Virginia area. Since you are in Fairfax, that would mean that you wouldn't be able to work for anyone local in Fairfax...even if the VA Team owner in Springfield didn't have a relationship with the prospect in Fairfax. Probably wouldn't be such a big deal if you lived in a different state. However, since you are local, that might be something to think about as it would restrict your prospecting of anyone in your local market.

I don't think there is a "right or wrong" decision. Just what works best for you and your business.

Cathryn Jones

__________________
Cathryn Jones
Assistants For Agents, LLC

Thank you for all your insight! I'm thinking I will negotiate with this:

Noncompetition; Nonsolicitation. As a material inducement of Company’s engagement of Contractor, Contractor agrees that, during the term of this Agreement and for a period of twelve (12) months after its termination for any reason, Contractor shall not, (i) hire, or solicit the employment or contracting of, any current Company personnel, agents, or contractors directly associated with Services; or (ii) solicit, otherwise offer to provide or actually provide to any current Client, directly any Services, that are the same, similar or reasonably related to the Services provided hereunder, during the term of Contractor without the prior written consent of Company. The parties agree that a violation of the foregoing noncompetition and nonsolicitation provisions would cause irreparable harm for which there may be no adequate remedy at law. The parties accordingly agree that Company shall be entitled, without waiving any rights or remedies otherwise available at law, in equity or by statute, to seek injunctive relief in the event of a breach or intended breach of such provisions and that such relief may be obtained in any court of competent jurisdiction.


-Because, what it really boils down to is that she wants to make sure I don't steal her clients-and I have no intention to-I'm thinking this says it very clearly that I won't try to take any current clients, or even current employees from her even a year from when I do work for her...honestly, I'm wondering if this is even worth it-she wants 10 hours a week at most, and I have one client giving me 20 and another signing on for 10-and another planning to sign me first of April for 5-10...would any of you sign a non compete for 10 hours a week?

__________________
VersaTel Solutions
Need a second set of hands? I can help!

I'm an individual not a "team", and I've been thinking about adding a non-compete as well. Regardless of how many hours, anyone can complete or take away business from another. I've hired several VA's to do project work for myself as well as for a few clients. I've also referred a VA to other people and now see where their moving into a particular niche, so even though you and I would never take another's client, there are people out there who do.

In my opinion, it doesn't appear that you'll have the time for this person after the first of April. You could let her know you'd like to revise the contract and would be happy to assist her as needed (after your clients). It's a thought.

Another situation is most of our work is VIRTUAL, so that can be a problem. You could take someone's client even though their in another state or country (not that you would), but for topic sake I say this. She's probably wanting more of a non-solitation vs' a non-compete or both.

Good luck and Keep us Posted!

PS: I bet TEAM VA's have their own agreements too not too far off from these...

__________________
The Doctor's Rx
"The Doctor's Prescription for Success"

I don't know if I would be willing to sign the contract for 24-months. Are you within the 25 mile radius? I could see saying maybe a 6 months or a year. But let your conscience be your guide on this.

__________________
Regeana Crumer
Ms. G's Office Solutions

I'm not jumping in here as a sub because I don't have experience in that area, but just in reading your post the first question that comes to mind is what's to stop her from asking you to sign this document, effectively cutting you out of the local market (if you are indeed that close in location) and then sitting on it, and not sending you any work at all....

It's one way to cut down on the local competition, I guess.

In reading everyone else's comments, I understand this is standard phrasing but that it applies to brick and mortar businesses. If you're interested in partnering with her I'd request a revision to the document so that it takes your virtual nature into account and does not limit you to advertising to or contracting with local clients, but rather protects her from you infringing on her existing client base.

I'll be interested to hear what you do and how it works out.
Good luck!

__________________

I would think a non-compete clause would be standard as the employer would not want you taking advantage of the relationship and soliciting their clients for business. Perhaps 1 year would be sufficient and I would add an addendum excluding any prior relationships you might already have. Of course I would drop the radius provision.

Good luck!