An Odd Situation 6

[ttuterry]

So here is the situation. I have been working for an AE consulting company for a year now. The owner of the company hired my boss about 14 months ago to start up a Civil/Surveying department. My boss hired me 2 months later, and then a couple months later he hired a surveyor. It hasn’t been the best of experiences because my boss had not done any surveying or site design work in the past 25 years. I have stuck with it though because of the economy and just to get some time under my belt. But to get to the main point, yesterday he took me and the surveyor out for lunch and told us he was leaving the company on Nov. 1. He is going to work for another company. The company he is going to is being started by 5 or 6 guys that quit their jobs last week in the Environmental Engineering department of this company. They decided to start their own company and have apparently been planning this move for a while. So my boss told me and my surveyor that he would like us to go to this new company with him. I asked him if we would be doing Civil Engineering work at the new company and his answer was basically a no. It will mostly be dealing with environmental site cleanups. I am within 1-2 years of being able to take my PE exam and become licensed, and not sure if moving to this company will be beneficial for me. My boss has told me and the surveyor not to say anything about him leaving to the owner of the company we are at now, for fear that he will be fired on the spot. So me and the surveyor already don’t like working for our boss, but if we were to stay at this company I could see the owner pulling the plug on the whole department. I am not sure if he would hire someone to replace my boss or not. So I am stuck with moving to that new company, staying here, or looking elsewhere for a job. I would really like the owner of the company i'm at now to know what is going on so that he can decide if he would like to keep a Civil/Survey department, or figure out how to re-assign me or whatever he would do. My boss says that he is looking out for the best interest of me and the surveyor, but to me it seems that isn’t the case at all. I’ve probably left some details out, but any comments/advice/thoughts would be apprectiated!

 

[stanweld]

ttuterry,
Your boss told you of his plans in confidence. He has the right to leave employment with his employer as do you. Ethically, you must keep his discussion with you in confidence, unless he is doing something unethical or illegal and you have not indicated that this is so.

By taking you into his confidence, he has indicated that he appreciates the quality of your work and work ethic; however, you appear to not like working for him. Your only quandary appears to be whether your eemployment will be terminated with your present employer when your boss leaves. I can only state that your boss can readily be replaced unless he holds the key to your company's survival, which appears doubtful from your discussion.

 

[vc66]

TheTick makes a good point. Also, if you were to go with him, they could also depose you for your involvement. Then, if they asked you if he recruited you, you'd either have to lie (perjury) or tell the truth and say goodbye to the new job.

Doesn't sound like a good idea.

I would start looking for something else, outside of these two companies.

V

 

[BJC]

The owner of your company can sue your boss when he "raids" his business for people.
sounds like it would be easy to prove, would you lie under oath about the dinner an what was said?
There are lots of precidents for this kind of suit.
Your current boss should quit, start his own company, seek people (not exclusively call people at his old employers) and hire what he needs. If some one at his old employers calls him first - no problem.
Your present employer is being unfairly damaged. He can recover damages.

 

[macmet]

Why don't you go to his boss now and say that you'd like to be challenged more than you are currently. Tell him you like the work and the people and would like to stay within the organization but, if any promotion opportunities come up in the near future you'd like to be considered.

That way when your boss leaves you might be able to take his position.

Maybe that's just crazy. Maybe they'll just assume you knew something they didn't.

 

[Waidesworld]

Your worry about your PE license should be at the bottom of your list. A year or so ago this happened my buddy. He was asked by his boss and a number of others who were going to jump ship from a large corporation to concentrate on one aspect of the employers business that they felt wasn't being done efficiently. Push came to shove and the angel investors backed out but not before the crew had all given their one month notice. The corporation won out, as all the guys were given their jobs back less 25% pay.
So don't make any sudden moves unless there is a firm offer on board. You can use that offer as leverage to stay in your current situation.

drawn to design, designed to draw

 

[KENAT]

Even if environmental clean up is a good market, how long from starting the new company to getting paid for the first job? Do these kind of government contracts give some kind of retainer/partial payment or something? Even just the invoice cycle of 30 or more days net, after you've done something worth paying for, can add up.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[vc66]

That's right, the Government pays faithfully... but slow as hell.

V

 

[RacingAZ]

I view people like your boss as someone like an adulterer. If you fall for the pitch and go to bed with him, you should expect that he will turn around and cheat on you in the future. It's just the way unethical people operates, always looking out for their own good, not yours.

If the new company will be getting work thru government contracts, this will be a very public knowledge and your current employer will find out very easily, being a competitor. I smell a lawsuit here from your current employer.

Also, is your boss' new company already has signed contracts from the government or they are just in the planning stages? I'll doubt they will be successful with their new venture if it is the latter. It's not easy securing a government contract because of the large amount of competition and preference given to some companies over the other (i.e., disadvantaged, minority, veteran, etc.).

Go devise your own plan with your own interest as a 3rd option. You can't rely on your current employer and your boss' new company to make it for you. Everybody will try to protect their own interests and so should you.

 

[Ron]

The Tick...oh yes they can stop you!! If you sign a non-compete agreement, the courts in the US look at two specific items...is the geographical area reasonable and is the time limit reasonable. If those two items are in the norm, it is likely an enforceable agreement. The usual limits are no more than 100 miles and no longer than 1 year.

 

[WHEngineer]

The courts will also look at one other alternative - compensation. Typical case with a large national firm - the non-compete stated no work within 100 miles of ANY company office for two years. That knocked out most US cities. However, the company compensated at 50% salary for two years. This particular company has been very successful in legally enforcing their non-competes.

 

[KENAT]

WHEngineer, please explain more. So you're saying that if one quit that place, you got half salary for 2 years just not to work for the competition? That sounds like a situation open to all kinds of abuse.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[rbulsara]

It varies by state and the type of business. Distance is hard to hold in engineering consulting. Engineering companies provide services all around the country and even the world, they can't hold any one to a distance limitations. It's not like a medical office or a barber shop where local clientele are of much greater importance. There may be other peculiar reasons. Only thing that holds water is recent clients stealing, that too within reasons.

It is generally hard to prove that the previous employer has indeed suffered because of the new business.

Of course, it also depends how good or bad the lawyers are.

A reasonable non-compete clause has more of a chance of being upheld than a aggressively restrictive one.





Rafiq Bulsara

http://www.srengineersct.com

 

[DarrellThomasNV]

set yourself up to walk into his job when he leaves.

 

[Ron]

Rafiq...they can and do hold the distance requirement, but usually it is limited to one or several offices, not the entire country.

A large engineering firm I worked for once hired a senior level technician who was under a competitor's infamous non-compete agreement. They had to "unhire" the technician after the competitor filed in court to prevent his hiring.

Both firms had multiple offices in the state and across the US. He was stopped from working for competitors within the stated distance of at least two offices in the state, maybe more.

 

[rbulsara]

Ron:
It may have lot to do with the type of work, lawyers or defendants giving up. In CT and MA distance for engineering does not hold water.

Rafiq Bulsara

http://www.srengineersct.com

 

[Ron]

Rafiq...you're right, it probably depends on a number of factors. I'm curious...when you say the distance limits don't hold in engineering in CT and MA, does that mean that they don't care how close you are to another firm or how far away, or is it that if there is any distance limitation in the agreement, it becomes unenforceable?

Ron

 

[rbulsara]

Ron:
I can't speak for the lawyers. If you web search, a few good discussions/ articles turn up on the subject. For one, the distance was not mentioned in my clause, which I presume was very carefully written that suggests that it does not matter. My understanding is that even if written it won't be enforceable in all cases. I emphasize 'all'.

According to what I had read in some articles (months ago when I looked that up for my interest), the distance limitation is more important for businesses like stores, medical clinic, restaurants and such where a new business will directly cut into the local customer base. That logic is not pertinent to technical consultants as their clients are seldom locals. Our local client means within 100 miles or driving distance. My previous employer had clients in GA a good 1000mi away, so where is the relationship of distance?

One can have their office, next door to their so called competitors and still not have clients within the state or one can have a office 1000 mi away and still work on other's local clients!

The consensus of the articles also suggested that most judges will sympathize with the new business (entrepreneurial is encouraged)and burden of proof of damage is usually on the previous employers. This, of course, is no consolation if you are in middle of a lawsuit.

I also know of a local case where, eventually the former employer had to settle at an arbitrator, with 3 of their former employees as they did not have much to go on besides intimidation. I do not know what was actually written in the agreement. If you do not steal the recent clients, there is not much of an argument.

But the expense, intimidation and nuisance value act as a good deterrent. It can still cost you, whether or not your are right.




Rafiq Bulsara

http://www.srengineersct.com

 

[Ron]

Rafiq...thanks. I agree, the distance issue makes no sense. I have only signed non-compete agreements twice in my career, both of which had no distance clause, and ultimately both were so weak they were quite easy to void.

Each time I left a company, I had developed my own client base and usually took them with me...without retribution.

Ron

 

[casseopeia]

I had to sign a non-compete when I sold my shares of a corporation that I jointly owned with my Ex-husband. My attorney said go ahead and sign because it will not hold up in court, no matter what the timeframe nor distance. It was something ridiculous like 5-years and the entire US. I just stayed under the radar and got a job in another field. But the true power of the non-compete is the financial burden. To defend a lawsuit is costly. Even if you win in court, your true loss is your start-up and operating capital. If you manage to steal away enough work to cover those costs, then perhaps it is worth it.

Before I sold out, I was in the position of owning the corporation as a result of buying out two ex-partners. We had them sign non-competes with a 100-mile radius and a one-year time frame. They left, opening up a competing consulting firm 6 floors above us in the same building in less than a week. They took 12 on-going jobs that were under contract and stole 3 major Clients and two employees.

We took them to Illinois State court for violating the non-compete, spending about $60,000.....and lost. Lost the whole thing. Not one aspect of the non-compete was enforced. Sixty thousand dollars down the toilet on top of the lost projects. The ex-partners I'd guess spent about $30,000, easily covered by the fees for the stolen projects.

So as far as non-competes go, I'd just take a good hard, unemotional look at the numbers and probabilities because in the end you might as well use the noncompete contract to line a bird cage.


"If you are going to walk on thin ice, you might as well dance!"

 

[Ron]

Cass..you're right...financial burden and intimidation are the only real means to enforce most non-competes. One engineering firm (a large national firm) has its professional employees sign a non-compete and they try to enforce every case.