By Laurie L. O’Neil

In my second year of business, I was contemplating hiring an employee or hiring a subcontractor. I decided on the subcontractor. I had my first heartening experience as a business owner. I had a client that had a high volume of work that needed to be done quickly and a lot of back work. I needed someone to help get everything up to date, so I hired a subcontractor. Being of a naïve nature, I did not have any agreements with her. Well you guessed it; she cut me right out of the middle and took over the account. This was the beginning of compiling contracts for employees and contractors.

This is a difficult topic because not all states will uphold Employment and Non-Compete Agreements. Connecticut is a state that will and they can be enforced. Also you will need a good attorney to review these documents.

Here are some things that should be covered in Non-Competes and Employment Agreements:

When it comes to a Non-Compete agreement be sure you cover: 

1. Geographical area – within reason
2. Timeline of non-compete needs to be reasonable
3. Terms of employees/contractors soliciting your clients.

When it comes to an Employment Agreement or Contractor Agreement:

1. At-will employment for employees
2. Termination clause for both employees and contractors
3. Discussion of general duties and expectation
4. A clause to not solicit employment from clients
5. Breach and liquid damages
6. In case of any issues, what state will enforce the breach

The important part of business growth is protecting the time and money you have invested into the building of your company. Employment/Subcontractor Non-Compete Agreements protect that investment. You do not want to be in the job of being a recruiter for your clients nor do you want to continually find clients for your employees to take away.

Hi – this week it’s me Linda. I am writing to at 30,000 feet somewhere over the middle of the United States. I took a couple days to meet up with some friends, relax and have a good time! I am sorry to say that I do not have any pictures to share with you – I really have to get myself a digital camera!

Before I left for vacation, I had a conversation with one of my subcontractors who had made a request that was not only very strange, it was also in direct violation of their subcontractor agreement with my company. All I had to do was to remind them of the agreement they signed and the situation was resolved. It’s a good thing I have well written agreements with both my clients, employees and subcontractors. All of my agreements contain language that protects me and my firm.

In order to grow our firms we have to leverage ourselves, which means hiring employees and/or subcontractors. When you are ready to take this step, make sure that you are protecting the business and reputation you have already built up. In this week’s article, Laurie talks about some hard earned lessons she learned about working with employees and subcontractors.

Wishing you financial serenity,

Linda & Laurie