Clay Clark shares what you can do when an employee violates their non-compete agreement.
yes, yes and yes. Uh, thrive nation on today’s show. I’m very excited to answer a question from a thriver that is not a fun question to answer, but it is a question that needs to be answered and I am excited because the person asking this question is a great person and I want to help them out. Jason it, the question is an employee has left me to go work for my competition even though they have signed a noncompete. Can I do anything? Oh, been there. Okay. We’ve, we’ve heard this question from a lot of Thrivers. I’ve dealt with this before and I am going to walk you down the path so you know what you can and can’t do. But uh, it’s, it’s not gonna it’s not going to be fun. It’s not, it’s, it’s necessary knowledge, but it’s definitely not fun. Okay. So step number one is when you hire people, you want your people to sign a noncompete agreement.
If you want any chance at all to ever win or ever keep people from going to compete directly with you, you’d like them to sign that going into, there are certain States though that forbid the usage of non-competes altogether but, but if you are in a state and you say look, I have a knowledge based business, maybe I’m a lawyer, maybe I’m a CPA, maybe I’m a dentist and I don’t want my top employee to leave me and to go work for my competition as a way to uh, pave the way for themselves to download my database and give it to my competition. I don’t want my top people downloading my client database and giving that to my competition as a way for them to pay their way to their next job. If you’re saying I want to prevent that going into it. One, you want to have people sign a noncompete right away.
Now Jason, why would you want people to sign a noncompete before they begin the job? Well one, you want them to know what the parameters of working for your organization are so you don’t want to blindside them. Cause then that’s just shady. They have to have their consent. So like with elephant in the room, we have it worked into our employee handbook. So when you’re going through it, listening to the audio podcast, meeting with your trainer, they go over every page and then right there it, you know, expressively, uh, defines what it is that they’re signing. Now the next thing you want to do is you want to install active track. Jason, I don’t know if you have any clients of yours that are using this program right now, but it’s called active track. Uh, a C T I V T R a k.com. That’s active track and active track for $7 and 20 cents.
As of the time of today’s recording, these guys will record the internet usage, the activity, anything that somebody types on their computer. You’re going to understand what your employees are doing at work in the office or when they’re working remotely. Um, Jason, why for $7 and 20 cents, is that a great value for every business owner out there to install active track on the workstation computers of all of their employees? Well, again, it’s not fun, but you always want to operate as a business owner under the idea that somebody is going to stab you in the back or be dishonest. And so this, you know, we could have cameras up with audio and video and everything, but where everybody feels like they can get away with it and say, Oh, you know, if I go over to the old incognito, we’re hitting browser. Oh, you’re not going to see what I’m doing.
But with active track, it doesn’t matter what they’re on. As long as they’re on a computer with that installed, you’ll be able to see everything that they’re typing. So if they’re sending emails to competitors about potentially joining their team or if they’re sharing information, you can track all that in real time. Do you and your wife ever go to target? Jason? I love target. Okay. When you go into target, have you ever noticed that when you go through the self checkout, you can see yourself? Yes. And at Walmart, why? Well, they want you to know that they are always watching. Why? Because at any given point, not saying I would do this, but I could if I had a bad day, you know, I might just decide I wanted to, you know, stuffed those pepperoni’s in my pocket instead of pay for them. So they have the cameras up so you can see that you’re being recorded and uh, the management can see what’s happening.
Why would you want to install nest cameras? It’s any S t.com. Why would you want, uh, installed nest cameras in your workplace? It’s a great way to hold everybody and yourself accountable. Uh, it helps you manage if you are not there. Like for instance, with elephant in the room, you come into the locations maybe once a month when you get the surprise haircut, but you always know what’s going on because we have cameras at basically every important inch of the location so you can manage remotely or we can eliminate the, he said, she said conversations by saying, okay, well let’s pull up the camera and see what exactly happened on this day at this time. Now the next and the next thing you want to do to prevent this from happening or to prevent any type of, um, situation where you as the owner of a business or a business coach can be screwed over by your employees.
Again, one is we can split install the, we have them sign the noncompete contract before they begin the job. Two, we install the active track keystroke recorder on the computers. We do this before they start working. We tell them we do this. We tell them, you tell the employees, Hey, all the keystrokes are recorded on your computer. That way if you ever had a situation where somebody said that you sent an email that you didn’t send or vice versa, we have proof of it. Okay. It’s for everybody’s security. We install the nest cameras in the workplace. We don’t hide that. We recorded the, that we have the camera recordings installed. We don’t hide or pretend that we don’t. Jason, why do you want to be up front that you have cameras installed in your workplace? Well, um, I know that there are certain States or you know, uh, counties that would prohibit you doing that without letting people know, sure.
Um, you’re holding yourself accountable and you’re being straight. But at the same time, I know that with a lot of our new hires that aren’t used to having that sort of, um, not so much surveillance, but accountability at, uh, at your salon or at a typical salon. They are a little bit more honest because they’re like, Oh, I know from the get go I have to sign a noncompete. My keystrokes are recorded. I am being visually recorded. So it keeps them from doing anything, you know, squirly from the jump. So again, step one, we install the noncompete. We have people sign that non-compete right from the beginning to we get the active track, keystroke recorders installed on all the computers. Three, we install the nest cameras into the workplace. That way we can see what’s going on for we now here, here we go. We need to have mystery shoppers that come in to your business on a daily basis.
Jason, what role do mystery shoppers have in making elephant in the room? The best it can be. They actually have a massive role. And what was hilarious was I had no idea they existed for the longest time. Um, having stepped out of elephant and like met some of them that re I realized like they worked here. Oh okay. I was like best friends with them. I was excited when they came in. I’m like, Oh I love these guys. But they also kept me on my toes because like let’s say I’m, I can’t say his name cause if anybody’s listening to this they’ll be a cock. He’s a mystery shopper. There’s an employee here that I hadn’t met yet and I loved and he came in. Then one day you were like, Hey, I have this little bit of feedback. And I thought the only person who would have known that was, Oh, Oh my God, this guy rented me out.
But again, he didn’t rat me out. What he’s doing is he is letting you know in a very non objective way what’s going on and we’re less likely to fake it if we don’t know who these people are. So they give you real time feedback, objective feedback without there being, you know, we’re not dropping the ball anywhere. Now again, mystery shoppers. If we did not have mystery shoppers and the elephant in the room and then we have retail stores, what would happen? Well we would have to leave it up to the video, but at the same time there’s a lot of stuff that you know the video can’t catch. So let’s say we have somebody who is on the other side of the shop and we can see them, but we can’t hear what’s being said. If they’re being inappropriate, if they’re talking about leaving, if they’re trying to coerce our clients into following them when they leave.
That’s where the mystery shopper comes in handy. And we’ve had that recently. We’ve had one of your mystery shoppers say, Hey, this person’s going to jump ship. And they’re asking me and like messaging me, you know, outside of the shop to follow them. Okay? Now this next area is there’s a thing called a non-solicitation agreement. There’s also a noncompete. Um, so step six and I promised our listener we will answer your question. What can you do when somebody’s already left? How can you keep them from going after you? But again, step one, you gonna make sure everybody gets these steps. Step one, have them sign the noncompete before they begin the job to install active track keystroke recorders on your computer so that way people know that they have their are being recorded so you can prevent any theft or Jack jackass for it. Step three, you want to install those nest cameras into the workplace.
Nest cameras. Those nest cameras are powerful, powerful. They allow you to see what’s going on. If you’re a personal trainer out there, if you’re an accounting firm, if you’re a law firm, get those cameras installed. If you have a retail store, an automotive repair shop, get those cameras installed. Install number four, install those daily mystery shoppers. Get those mystery shoppers working for you. Get these people giving you daily feedback about what’s going on in your stores and your offices and your medical practices. Get that done. Step five, you want to install the GPS devices onto the work vehicles. Jason, why do you want to use a program like track your truck.com or some other kind of GPS on work vehicles? Why would you want to know where your work trucks are going? Well a bonus incentive is you can, I’m a lot of times get an insurance write off on it, so save some money.
Here we go. But if you are a contractor who has worked vehicles or if you are, let’s say you know in the trucking industry, law enforcements, what have you and you, any type of branded work vehicle, somebody who’s going to use that to go on a trip, they’re going to use that as their personal apartment sometimes. But um, they are burning fuel, which is burning money. They are potentially going to use that in any way, shape or form that has nothing to do with the job at hand. Or they could even in some cases end up selling it. And then you can track and see where it went. But most people think that because they’re in the vehicle, it’s like privacy and they’re not going to know where, you know or you’re not going to know where they’re going or what they’re up to. But this helps you cover your bases.
Um, we had a business coach client that recently got himself out of trouble. There was a telecommunications company that said that they damaged one of their towers or something. This is true. This just happened, you know, and they were able to go back and pull the logs of that weekend day and show where all their vehicles were and show that they were never even close to the vicinity of what happened. Okay. Now, step six, I would recommend that you would work with my attorney, but you could use whatever attorney you want to work with. I would recommend that you would use my attorney R R our the attorney that I use. Uh, West Carter, his a law firm. Winter’s King a winters and King though they, they represent huge personalities, huge businesses. Um, they represent TD Jakes, the mega church pastor. They’ve represented. Uh, Craig Groeschel from life church. They’ve represented um, Joel O’Steen huge personalities and that their website is winters, king.com winters king.com.
I would work with them or a law firm you can trust to create legally enforceable agreement step. Jason, why would you want to work with a law firm to make sure that your agreements are actually enforceable before you have a problem? I think a really important thing is a lot of like, you know, amateur business owners or like people who are new to business. We’ll spend a lot of their time researching what they can do on the internet. Case in point, I was looking up something for one of my clients and with there being like the whole legal medicinal marijuana thing in Oklahoma, he caught a guy using in his truck and wanted to know how far he could go in order to terminate that employee because it violates his personal drug policy. Right. He didn’t, he wanted to make sure that he wasn’t going to get in trouble as far as the state goes.
Didn’t want his employee to come after him. So he Googled it, but then I told him he has to have something legally binding because you can’t just say, well, Google told me I could do this because if they take you to court, the court doesn’t care what Google says because Google’s not legally representing you. So having that backup, having somebody who will sit down and do the homework and draft up something that you can actually use that’s not just some intangible idea is going to be very, very help. Yeah. Well, okay, now this is, this is, this is powerful. This is powerful. Again, a lot, a lot, a lot of power here. I want everybody to take some action here, okay? Because this is going to happen to you. At some point, a key employee is going to violate the non agreement that you’ve signed.
And we have a listener right now who’s going through the issue right now, and we’re trying to help this person, but I’m trying to help you as a business coach proactively prevent this from ever happening again. Right? All right, so here we go. Step number six. You want to get a legally enforceable noncompete agreement and a non-solicit Haitian agreement. Now a noncompete bars, an employee from competing against a former employer for a specified amount of time for a window of time. We’ve agreed on maybe six months after they worked there or a year, maybe two, maybe five, maybe three. But usually a noncompete is not enforceable in any state in this great union beyond two years. So I don’t care how long you signed a noncompete, but if you have a noncompete that says if you stop working for me, you can’t compete in this industry for 10 years.
It’s not enforceable. There’s just no legal precedent that shows that it will ever be enforceable beyond two years. Right. So I, and I’ve even seen people that have sold a business to somebody else. When I sell businesses, I will automatically do a noncompete cause I could easily go back into that industry and dominate very quickly cause I know what to do and I have the dragon energy. But I signed these agreements that prevent me from working in that industry for maybe three years or five years or whatever it is. And I’ve never violated one. But I know people that have actually sold their company and then have gone out there and competed directly against themselves within a very short period of time. And even in that specific situation, they can be hard to enforce beyond two years. Right now the next agreement you’d want to have approved by winters and King and you’d want to work with them to create is a non-solicitation agreement.
Now this is where this prevents an employee from soliciting his or her former employers, clients and employees. So it says, if I work here today and I leave this to go work for the competition, I cannot go after clients of my former employer or their employees. Yup. But even then, even then, what happens when you have these agreements in place and the person who’s violating the agreements doesn’t have any money. Jason, I, I give you the floor. What do you think? What happens when somebody breaks their agreement and they don’t have any money though? So you as the owner of a business have some money. Yup. And you want to go after someone who doesn’t have money. What do you think happens? Well you will end up spending more money pursuing that legal case than they will and then they end up winning in the end cause they already have nothing to lose.
And that’s the, that’s the scary thing that most people in this particular situation, I’m not sure you know who were insane this question for if they’ve already started legal action. But like let’s say I were to be fired or move on and I know that I found a noncompete and a non-solicitation, but I’ve got a zero balance in my bank account. Right. Knowing what I know, even if I don’t know what I, what I currently know, it would be more beneficial for me to do. Or I’m sorry to act against what I’ve signed because I know that I’m not paying out of pocket. You are right. And you also know that any event that I win, I still lose because I don’t win any money. Exactly. And then if you go to court, by the way, let’s, let’s, let’s go to court. Here we are.
We’re in court and you ha you’re in court and they say your honor, you sign here. You sign in. Okay, great. The Sheriff’s over there. Okay, your honor. Oh, the prosecution would like to show their first witness. Okay. The defense wants to show their witness. We’re going back and forth for days and days and days. Isn’t the average person who’s a member of the jury self-employed? No. Really? Well, yeah. Why? I have only ever worked with one self employed person who was on jury duty and I thought that was crazy. Why? Because then he had to take time out of running his business to go sit on the jury that he wanted nothing to do with now for two days. Now legally you have to appear true to if you get to, did you do that? My wife just got selected for jury duty. No.
Yeah, she just got selected. Aw. She’s not happy about it. How much she’d be awesome on a jury. Well she has to go and it’s a minimum of a week. Yeah. And they pay her, it’s $20 a day to serve on this thing and she has to go, you know. Um, and so a lot of self-employed people though statistically, let’s just say that everybody who was asked to be a juror this month, you know we do a survey, are you self employed or are you not less than 10% of the U S population is self employed. So it’s like a one in 10 chance that the jury is going to consist of self employed people. Right. So think about this for a second. The jury now has the evidence, right? They got all the evidence from the defense, from the prosecutors and they’re going back to deliberate to decide who is guilty.
Yep. Do you think that the average person sides with the boss or with other employees, I mean just think about Thanksgiving at your house. My house Christmas last Christmas I gave you my home the very next day you gave it away. My boss screwed me again, blah blah blah blah. Everybody agrees. You know, cause everybody thinks people always talk about man, my boss. Oh yeah. Am I correct? Yeah, if you have a G cause I was already thinking as you were painting that picture, I thought, Oh no, if you’re the business owner and you are taking a previous employee now emphasis on employee to court, the jury is made up of non self employed people. AK, other employees who are they gonna want a sideways will. They agree they hate their boss. They see this person going to move to their boss. So you know, let’s stand up for the little guy.
Let’s have him win because we can’t win. So the employee’s argument is always this. They’ll say, they’ll say it just wasn’t working out. My boss was a tyrant and I’ve got babies, I’ve got my babies, I got babies and then the in New Jersey. Oh get her a tissue, your honor. Get her it quick. We request a quick break here. Please let me come back for the next time. And so I could work in an environment like this because it made me a bad mom, a bad mother. And so I quit. I put in my notice,
I have no other way to work.
Probably the competition and all of the jury. It’s like, Ooh, Ooh. And then the business owner gets up and says, here’s the deal. Amanda couldn’t string together two days in a row of being on time. It was never on time. I kept writing her up. It kept getting worse. I tried to correct the behavior. She won’t be on time. And the jury is like,
we’ve never been a type either. We’ve all been fired.
But how dare you hold us accountable for being on time. You know what I’m saying? Right. And so Robert Frost, the legendary author writes a jury, consists of 12 people chosen to decide who has the better lawyer. [inaudible]. That’s good. Robert Frost, a jury consists of 12 persons chosen to decide who has the better lawyer. So I would advise you if you’re out there today to implement these these steps. We have one more step because you want to avoid litigation when possible. So step eight, our final step. This is very, very important that we do this. Jason, you want to have a daily huddle with your team? Why do we want to have a daily huddle with the team all, well let me start with this daily huddle with the team today, we meet every single Saturday up here to record at five pretty much. Yup. And this morning, um, I had a confusion.
Someone had declined, had let me know, Hey, I cannot meet at our normal time. Could we, could you call me later today? Yada yada yada. So I, you know, when I, I keep my phone off but I turned it on cause I was listening to the new Kanye West album and she’s sick. So I’m listening to the new Kanye West album and my Bluetooth update comes, just said, sorry for the light text, but can we meet later tomorrow? So I’m thinking, okay, sure. So what I did is I thought during the time we normally have, I would normally drive to work. I’ll just record it, get some stuff done at the house and then I’ll come up to the office now because I’m a bad, selfish, terrible, rotten human. Seriously. I did not think to text you because my son was deejaying last night for a really cool family. Right.
So right after sending that text, I’m helping my, my little, my little buddy, my son load his equipment into the suburban. So I’d get home and I go to bed. Right. Cause like at 10 o’clock that’s the latest I’ve ever been up. I mean it’s just like, Oh yeah, my post DJ career, there’s, there’s, there’s pre DJ when the pre or during the my DJ career and before DJ career I was always up till midnight, two in the morning, three in the morning. But after about 10 years of teaching, four nights a week, I thought to myself, self, if I ever get out of this DJ doom loop of owning TJ connection.com I’m never going to stay up past nine o’clock. And so I was, I mean last night, I mean it was like I hadn’t been up that late in a long time. So I put my head on my bed like at 10 30 that is late.
Oh my gosh. I could have sleep. Got us out immediately. And then it occurs to me, um, because I’m a selfish, horrible person. Here I am having a podcast recording, I’m editing stuff, I’m a buyer and then I noticed what time it is and I’m going, I didn’t tell Jason. So now Jason is at the studio at the Riverwalk today, you’re here through Riverwalk and you, it’s about 15 after and I turned my phone on and I noticed that you said, Hey are we recording today at the office? Did something change or whatever. And I realized I made a mistake. So when you make a mistake you have to own it and you say, my fault, my issue, I made a mistake. You explain to the person what happened. You think to yourself, where do I need to do so this doesn’t happen again. I thought to myself, I got to keep that phone off at night cause this right here, even though I got a chance to listen to the Kanye, this allows me to be breached and so, but anyway, all I’m saying is you huddle every day, you look people in the eye so you can correct issues, right?
You can see when people are getting weird. Exactly. And you’ve managed elephant in the room for a long time. It’s a roughly, you know, three and a half million dollar business. There’s a lot of clients coming in and out, thousands and thousands of clients, uh, dozens and dozens of employees. And why do you have to look at the team every day in the eyes and huddle if you want to avoid being blindsided by somebody who leaves and goes to the competition? Well, if you’re connecting with your team and assessing their character every single day, you are less likely to be blindsided. You stay in the know. And I’ve noticed in the past when somebody is getting a little squirly is when I’m having that huddle and five out of the six people are really engaged and they’re not to be found and you have to go wrangle them. Like, Oh sorry, I didn’t know that we were huddling.
I don’t want to mention, I’m not gonna mention any details so I can not get myself in trouble. It’s too early, too soon. But yesterday we had a new member for one of the companies showing up to work for their very first day. Oh, they hated that Kanye video. Oh, I didn’t, I didn’t, I didn’t scan the crowd. I should have. He hated it. So I showed the team, Oh, preview of the new Kanye album and he hated it. I mean, just, you could tell he hated it. He hated it. I mean, this is like his first day and he hated it. And so what happens, Jason, when somebody hates something and you can tell it offends them, they’re mad. I’m showing the staff, you know, just always tell the staff cool stuff I’m excited about. I always share fun updates and stuff. And so I shared a little sneak preview of Connie’s new album and let me play the audio that I played yesterday. Just you can hear what I’m [inaudible]. Kanye West’s new album.
Now this guy was not happy about this video.
I was saying, I’m super excited. I’m gonna go to IMAX this weekend. See it. Connie’s new album’s coming out. What could possibly offend somebody about that video? Well, it could be, you know, the, the Mark verse. It could be maybe their pretend, you know, particularly not a Kanye fan, or it could be an amalgamation of the two. Like I, when it first started and the quote came up, I thought, Hmm, Hmm, somebody could be offended by this. Daisy, uh, has been a Buddhist for awhile. W do I get into arguments with Daisy about Buddhism all day? No. Does she argue with me about Christianity? Nope. No, but I mean, if, if somebody out there on my team is into transcendental meditation and someone’s into yoga and somebody into Christianity and someone’s into Judaism, you gotta get over it. We’re in a diverse society. Right? But this dude got offended.
Oh man. But that’s why we have the, the group weekly, we have an all business coach staff meeting, right? And I looked at that dude in his eyes and I’m going, Oh, this guy, he’s done. He’s done. That was it for him. So again, let’s, let’s just recap all the steps here. We’ve got eight steps to keep somebody from ever going to work for your business coach competition, blindsiding you and violating a noncompete one. Have them the agreements before they begin the job. To install active track keystroke recorders on all the computers. Three install the nest cameras into the workplace. nest.com install daily mystery shoppers and got installed. Those mystery shoppers. Step five, install the GPS recording device onto your vehicles and if it’s an office environment, why would you want install clarity? voice.com why would you want to use clarity? Voice call recording if you’re in an office environment, get to make sure people are making the calls.
Got to make sure they’re sticking to the script and it helps you verify. Again, getting rid of that whole he said she said your word against. There’s a step. Number six, work with a lawyer. I recommend winters king.com but work with an attorney to make a noncompete agreement and a non-solicitation agreement that is enforceable in your state. There are some States, California in the great state of California. You can’t do noncompete. You can. You can end up, but you can be. If I’m a TV star and be the governor and be unable to say the name of your stage, you got enough on ya. Uh, what state causes? He says that’s amazing. And everybody out there can imitate Arnold Schwarzenegger. No, we’ve been over this. I can’t write. You can’t no. Try it. I’ve tried. I embarrass myself every single time I’ve tried Pompey bonded. You got to do pump beads.
You’ve got to pump it. Nobody’s got the poverty. Got the pop pop. We need some more. Try it again. JC. Got it. You forgot to Pompey got to pump it. Oh, that was good. Okay. We’re primal. It’s like I don’t do poppy. That’s at the back of your throat. Do it again. You’ve got to pump a dog up to pump it. Oh, that was really good. Thank you. That was impressive. Okay, so now we want to do is we would avoid litigation when possible. You got to avoid that litigation when possible. So if you can settle, do it. Yup. And step eight, the Ochoco daily huddle with the team. Always huddle with the team every day. That way, if somebody is screwing you at least know who’s mentally quit, you’re going to know who quit mentally cause they usually quit mentally before they physically quit showing up.
Right. And that daily huddle keeps that from happening. But in this case, hopefully that’s helpful for you. If you want to know if you can legally enforce it in your state, um, to our listener out there who has the question, I would go to winter’s king.com uh, reach out to them, reach out to West Carter and his team and just ask the question, can I enforce this in my state and how much will it cost? And if it’s going to be like, you know, 20 grand, maybe it’s not worth it at this point. Yeah. But maybe it is. Maybe it’s worth maybe just 10 grand to enforce it. Maybe it’s just five grand to enforce it. I don’t know. I don’t know how enforceable your agreement is in your particular state or what that employee has or has not signed. But hopefully that provides clarity for you on this wonderful edition of the thrive time show.
If you have any questions at all, always email us to info at thrive time. show.com that’s [email protected] and if you have yet to book your tickets for the December thrive time show business conference, you want to do it, it’s going to be awesome. I’m right now just as of the time that I’m speaking right now, we’ve got about 45 tickets available for couples to attend. A lot of couples come, husband, wife, business partners, that kind of thing. We’ve got for about 45 couples left. Uh, we’ve got Michael Levine, the PR consultant for Nike, Prince Michael Jackson, the world’s number one branding expert. We’ll be in the house. Matt Klein with Oxi fresh is going to be here to teach us how they’ve sold 400 franchises at Oxy fresh and what it’s like to live the life of a franchisee on a daily basis. How to run a systemic business.
Matt Klein, the franchise developer with Oxi fresh Shelby in the house December 13th and 14th. If you hear this, uh, audio after December 13th and 14th, I get it, but go to thrive time show.com and you can see when the next in-person thrive time show workshop shall be. Um, right now we are the world’s highest rated and most reviewed workshop. We have people from all over the world attending this. You’re going to meet entrepreneurs just like you. I would say about 80% of the people in the audience are self employed millionaires or multimillionaires. And that’s exciting because at least half of them were not millionaires before they became a member of our business coaching program. I mean, we’re talking about people who’ve transformed their lives are going to be in attendance. And also Jill Donovan, the woman who started rustic cuff and grew it from zero employees to 125 employees. Jill Donovan, the founder of rustic cuff.com shall be in attendance as well. My name is clay Clark and that’s business coach Jason Beasley. And we’d like to end every show with a boot now. Then the first three, two, one boom.