DealersEdge Professional Forums

I'll be honest up front - I hate non-competes and the mentality behind them. I also think 99.9% of the time they are worthless.

But setting aside my prejudice, a few shops have asked me about using them when they are looking to invest long-term in tech training and development. Has anyone had success with a non-compete? Did you have a labor attorney draw it up? Has it been tested in court?

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** Rob, Editor Dealersedge/WD&S **
Help is only a message post away!
robc@dealersedge.com

I to am very interested:

As a VW dealer, when we hire a graduate from VW we are required to pay VW $5500.00 after the tech has been employed for 90 days. We also have to pay legitimate student loans at the rate of $150.00 per month up to 7k I think. It is quite expensive to have one one these guys. I have a guy now that moved to Pa From NY right out of school. So far he has been pretty good and I think he does have a future as a tech. I just think that most of the young guys get homesick and the first chance they get to be closer to home they will take it. This leaves me out the $5500. I have hired a few of these guys after they left another dealer which means the other dealer was left without a tech for 5k they spent.
So it would be great to get some answers to this question.

[This message has been edited by Fixedopsmgr (edited 02-02-2006).]

Instead of a non-compete agreement how about some sort of agreement that requires the technician to repay your out of pocket expenses if he leaves within a certain time. To avoid state laws you would have to specify that the amount you are paying out is a payroll advance. Otherwise they might consider it a loan.

If nothing else it might make the tech think twice before jumping ship.


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Frank Burrows
fburrows@absdata.com

With most states being right to work states. They won't hold much water when a judge looks at a busniess entity vs. someone who needs to feed his family. Unless they are doing something intentionally injurious to the former employer. As someone stated above I would be more in favor of an agreement about a tech being reponsible for training received in given period should they choose to treminate employment.

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I worked for a large dealer for 3years and after 3 years he handed me a non compete contract for 3 years .. i took the contract to an attorney .. he stated that he had never seem these used in the auto industry but that it could be inforced .. i asked the dealer if we could discuss some of the contract he stated no .. i stated then i would not sign it .. the dealer told me all his managers had signed one .. this was not true ..

i was gone with in a year

smalled / slower closer to home

paul

ohio

I just don't see techs signing non competes

managers, perhaps

just not the nature of the industry unfortunately

I could be wrong I suppose, just seems like a hard sell when good techs are always in such high demand

One of the best ones I saw was a contract that made the cost of training a loan. And each month the tech worked reduced the owed amount by 1/12th. The "loan" included all paid time off for training, food, expenses, etc. The techs tried harder to control expenses since they might have to pay it back if they left. And, in the only case taken to court so far, the judge rulled the contract binding and that tech is now repaying the loan.

A "non-compete" for a tech is overkill unless you could reasonably prove that the loss of that one tech would cause economic harm to the dealership. Highly unlikely and thus not likely to withstand legal scrutiny as a matter of equity. However, other industries often provide tuition reimbursement plans for employees. The bank I worked for invested $20K in my MBA degree, but their employment policy manual stated that if I left within a certain time period after receiving the degree I had to pay back all money spent by the bank. Simple, enforceable way to avoid getting burned.