May 5, 2011

 

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Comment on restrictive covenants

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Hi Ken,

Regarding the email about the restricitive covenant, it is not always as clean cut as the employee "stealing" customers. I worked for a company for 14 years when I was given a one day notice that we were "merging" with another company. I did not find out about the employment contract until I was sitting in the office the next morning. Assuming everything was legitimate, I signed the contract to avoid a lapse in pay.

Within weeks I found out the new company wanted me to poach accounts that had been sold by the old company prior to the merger. I refused to be a part of this, and was told to either poach these accouns or lose your job. I called the company who owned the accounts being poached, and started subcontracting for them. The company that wanted me to steal the accounts sued me over the restricitive covenant. It was an expensive process, but I fought the battle and won. It took a year and a half and $25,000 but I knew I was in the right and was not backing down.

What a lot of employers fail to realize is, your hands must be completely clean to enforce the contract. I did lots of research on state and local websites. Even a lapse in a local business license can cost you the lawsuit, it worked in my favor. Before attempting to enforce a restricitive covenant, make sure you have EVERYTHING in order.

BL

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Tough issue. Yes, you do need to stop this sales person from dismounting your company piece by piece, but you still lose money in legal fees which you probably won't be able recover from the sales person.

An example: Worker on a roof drops brick and kills someone. It is an accident. The worker would say I'm sorry, and that should make it good. You get into an accident while you drive and you kill someone. Sorry won't make it good in your case. Why? Because you're LICENSED driver.

Is your ex sales person licensed?

Dusan

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comment on taxing monitoring

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Ken,

Florida statutes specifically name Burglar and Fire Alarm MONITORING as well as Security guard service (all labor), guard dog rental etc as TAXABLE under Florida's sales tax laws. There is a section that allows a "Fixed Price Contract" for improvement to Real Property to be done without charging sales tax but ALL of the material used must be bought and sales tax paid at the time of purchase. Note I said ALL, you better have a roll of tape, boxes of wire, staples etc on the purchase invoice from your distributor. Some dealers who have been audited have been charged tax on the entire job because they used supplies (tape or beanies) off their truck and those were bought without paying tax. It creates an accounting nightmare but you must have detailed invoices showing the tax paid on your purchases to survive the state of Florida's 5 year audit. Hope this keeps someone out of trouble.

Mike Fletcher

Heeth LLC