View Full Version : Non-Compete Agreements for Purchasing Business

01-24-2018, 01:04 PM
Hi All!

I recently joined as I recently began pursuing business ownership, purchasing an existing company from my uncle. He currently has 10 employees, all of which have no non-compete clause in their employment contract with my uncles.

As we look to take over in about 2 months, I'm looking for advice on the best way I go about ensuring I retain the employees. Technicians and maintenance guys in the industry (HVAC) are in extremely high demand and the selling of a business may be the trigger that causes an employee to jump ship to another company they foresee as being better, higher pay, whatever.

Is there a way to enforce a non-compete agreement with the employees prior to the sale of the business? Would this scare employees away? The seller has stated he does not feel comfortable bringing a non-compete agreement to his employees. When I take over, I will of course need to create a new employment contract with the employees, so is that the best time to integrate a non-compete?

Any help is appreciated!

GreenAir Cleaning Systems
06-03-2018, 01:15 PM
Change of ownership can definitely be a trigger for current employees to resign or look for a new company in the industry.

I'm sure there are ways of including a legal clause into the purchase of the business so that your uncle implements a non-compete clause for his current employees through the purchase transition and under new ownership.

However, as an employer, your employees are always free to resign whenever they please. I think it'll be more progressive and productive to show your employees that this change of ownership will actually benefit them. This doesn't always have to be tied to financial incentives like raises, promotions, or extra benefits. It can be things as simple as better ownership, more organization in management, a renovated office environment, monthly company lunches, employee of the month movie tickets, better technology and communication, etc. If your employees are in high demand like you've said, I'm sure they are always being compensated at a fair market rate. Combine that with some of the other company culture and morale benefits.

Creating a positive employment relationship with your employees which combines many different incentives is the key to retaining them short and long term.