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No compete clause

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Frederick R. Ruffell

Thread Starter
Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
I have a friend who just got laid off by a large nationwide AMC here in California. There was a "no compete" clause in his contract. Does anyone know if this is legally binding in CA and or if it is even enforceable? I don't have anymore details. I told my friend if it were me I would take whatever clients I could to insure my income. As it is the AMC may be going under and if that is the case then there is not much to worry about as I doubt they would spend money on lawyers fees.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I think this sounds like a question for an attorney. I know that is a costly alternative when you just got laid off. You were right by telling him that enforcement sounds like they would have to go after him in a court of law. Of course I'm dying to know which AMC......... :lol:
 

Nancy in Friday Harbor

Junior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Washington
If your friend was laid-off, then I think they'd have a pretty hard time making a "non-compete" clause in a contract stick. No company can prohibit someone from earning a living if they aren't willing/able to provide them a job!!

Just my NOT A LEGAL OPINION 2 cents worth.

Judy's advide is good. Talk to an attorney.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
No-compete clauses are designed for when you quit.

I would violate it now that I've been laid off. It's a pretty hard issue to enforce and plus the AVM will have to pay attorneys fees upfront to go after somebody who's working from paycheck to paycheck.

Attorneys figure out how they're going to get paid before they decide how meritorious a lawsuit is!

It's a very highly unlikely scenario, I would surmise.

WHEN you don't have any money, if you're sued, just show up in court on the appropriate day and be polite. Tell the judge you don't own anything.

AND, be sure to fill in all the forms the attorneys and the court send you in childish handwriting. Pencil works well, too. If you are especially bold, USE crayon -- DIFFERENT colors.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Just A Thought;
We used to have those here in our area, mainly or the most often herd about, were administered by MAI appraiser's here. There were specific time frames, and covered any aspect of departing. Because a friend of mine was worried about it, his dad inquired to a local "business contract attorney" and the result was it could not be enforced.
Now, this had taken place approximately 20 years ago; laws in various states differ and change over time, my suggestion would be to contact a "business contract attorney"; IE- the AVM gets bought out by a larger Corp., they may assume of the Corp/Company acquired and YOUR friend may fall under a carry over process - similar to a Bank or Mortgage company being bought out, it doesn't mean you don't have to pay the mortgage anymore-you must continue payments by law.

Life In A Snow Globe- 8)
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I have 2 friends here in Florida that were sued for non-compliance with a non-compete contract. Both lost and had to find other work for the term of the non-compete. One is an appraiser. Premier Appraisal, when they first got going, bought him out and made him the 'manager' with a nice contract. He had one of the most highly respected and long time firms in the area, is on VA and holds a commercial license also. He brought all the big banks and clients with him. They then found 'some' reason to lower his pay, make his life miserable, etc. They did this sort of thing around the country. Then they became Premis Appraisal and all continued under that name. They forced him out then enforced the non-compete. They offered me the same deal about 6 months after they canned him. They've been through at least 3 or 4 others that I know of. This is their way of getting rid of the competition. He just came out of that 3 years where he could only do a few commercial reports for individuals only and the only residential he was allowed to do were the VAs assigned to him. All the big banks and clients he had before were not allowed to use him.

By the way, Premier turned Premis is now Land America One Stop.

BE WARNED! Do not do business with these people and DO NOT sign a non-compete with ANYONE!!! There are others out there trying to do the same thing.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I'm with Pam on this one.
There are a couple of larger appraisal houses in my area that I have heard require no compete clauses that they do enforce. The more established appraisers are encouraged to bring in new clients and are given a higher commission for those accounts, but if they leave the company they can't take the client with them.
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I understand the perceived need for no-compete clauses in some cases and, of course, none should be signed without obtaining legal advice. The ones I have a problem with are the appraisers hiring only trainees and having them sign a no-compete contract. Some trainees are just so happy to have someone bring them on board and mentor them that they'll sign a contract without giving it the thought they should. By the time they realize that one day they'll be licensed and are now tied to this company "forever", it's too late. Seems to me a trainee, since they're bound to one company until licensed, would only represent minimal competition anyway. The only way they could compete is to find another mentor, and that was tough the first time around! Anyway, it seems to be an area of potential abuse and anyone just entering the career field needs to watch out for themselves.
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I've never understood why people agree to a non-compete clause in good faith, when they are hired, yet look for ways to get out of it when it finally becomes in force. The time to negotiate the terms of a non-compete clause is when you first agree to its terms.

Here in Illinois, non-compete agreements are generally enforceable so long as they aren't too broad in scope. It is assumed that a person should have a right to make a living- so very broad clauses aren't enforceable.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Pat --

You say you don't understand why people agree to a non-compete clause in good faith --USUALLY, the applicant doesn't have much if any negotiating room when she's either a trainee or an appraiser out of work.

I've seen all sorts of shenanigans. Once I ran into a big local comany who had an agreement with the client to buy back any loan that went south during the first year after appraisal. EVEN, if it wasn't an illegal arrangment (and it was), that foreclosed solo practitions from soliciting that client's business.

In another situation, this big company interviews appraisers to find out who their clients are and then goes out and solicits them.

It's a cesspool. Fortunately, I've managed to float on top of the scum over the years. Every once in a while I have to get a new non-rusty can to bail with.
 
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