The use of non-compete and
non-solicitation agreements are becoming a staple in just about every
business. The fitness industry is no
exception. In fact more and more small
fitness businesses are using non-compete agreements when hiring trainers
regardless if the trainer is an independent contractor or an employee.
Now I am by no means a legal
expert and would strongly recommend speaking to a lawyer if you have specific
questions regarding a non-compete and/or non-solicitation agreement. So, don’t substitute what I am about to say
as legal advice.
Although the two terms
non-compete and non-solicitation are often used together they have two distinct
meanings. A non-compete agreement is a
contract between employer and employee/IC whereby the employee agrees not to
enter into competition with the employer after employment has ended. The non-complete typically takes effect after
employment has ended and will last for a pre-determined time set forth by the
employer. The non-solicitation agreement restricts the employee from soliciting
(a) employees or (b) customers of the business after departure.
The intent of using the
non-complete and non-solicitation is to provide reasonable protection for the
business. When a fitness business owner
hires a trainer there is an assumed risk that the business owner takes. The primary risk is the effort and resources
the business has provided the trainer to develop a client base. If the trainer was to just up a leave and
take the clients with them: this could lead to a devastating impact to the
business because of the loss of income.
The use of agreements is permitted by the courts in an effort to protect
the intellectual rights and any proprietary information the company has
provided the trainer.
The use of non-compete and
non-solicitation agreements vary by state.
In fact in California
Also important to note is
that the terms of the agreements must be deemed reasonable. Unfortunately, reasonable is a very loose
term and if you end up in court it will be up to the judge to determine what is
or isn’t reasonable. Here is what you
need to keep in mind. The purpose of the
agreement(s) is not to prevent the employee from working in their choosing
career field and to limit their ability to earn a living. So although the intent of the agreements are
to provide reasonable protection for the business regarding their customers and
confidential information, they also provide protection to the employee for
his/or right to earn a living.
There is one last point I
would like to make; the non-compete and non-solicitation agreements are
generally in place for the position and time at which they were signed. This means if you hire a trainer, and have
them sign the agreement(s) and then later promote them to a management position
the previous signed agreement(s) may no longer be in effect. So, error on the side of caution and make
sure to have trainers/staff sign a new set of agreements whenever there is a
change is positions or status.
