I’m working on hiring an inspector to assist me and take some of my inspections. He work be working for my business performing inspections. What are the legal aspects, such as a no-compete provision. How do other inspection company owners pay their employee inspectors? Any other thoughts or issues here?
My personal opinion…
Most guys you get that applies will be one’s wanting to learn the business from a pro with hopes of someday starting a business themself. One would be a fool to sign a no compete clause.
When I started out, I worked under a non-compete contract, but I knew it wouldn’t hold up in court. I simply signed knowing that the contract is garbage in Massachusetts. Especially when the contract states that I can not work in the home inspection field in the entire state of Massachusetts for a period of one year after I terminate. This was a ridiculous contract and so are most of them that are being signed daily.
After I left this firm, I started my own HI business with no issues on their part. Then after being in business for a while, I hired an employee who worked out well for me. He worked for me for two years then left me for a computer firm. I was glad I didn’t have to compete with him.
Just keep in mind, that anyone you are hiring, will want to start their own HI business sooner or later.
Only if they’re a good inspector though, because you’d fire them if they weren’t! ;-)
How ya doing, Blaine? I haven’t seen you since the Disney Convention back in January of “05”.
Usually a no compete clause includes a radius of about 60 miles.
I don’t care how many miles it includes, these contracts simply don’t hold up in court in Massachusetts.
Hiring new inspectors
I hired one in 2003 and he is my partner now; I have made more money in the last couple of years than I thought possible even in a great economy.
Pay the person what you would want to be paid. Money is the key along with respect. We hired a new inspector last May, he was a Certified Indoor Environmentalist from Connecticut. We did not make a dime off him for three months, had to retrain him. He enjoys the work, says he likes the way we do business. He says the money is important but it is also an indication of our respect for his efforts.
If your business is the best it can be, don’t worry about the non-compete agreement. I have trained several competitors over the years as ride alongs, most are gone out of business now. Just because you start out right, you still need to improve, improve, improve your business, people just don’t have the drive.
I never wanted employees but could not do all the work, now I wished I’d hired people sooner. Hired a beginner last September, set up a training program with pay raises based on accomplishments, seems to be working out great.
I retired from GM in 1995 and swore I’d never have an employee, which was a mistake.
Don’t worry about the competition, just run over them by being better and proving it.
Never stop-Never stop -improving
Its always fun to win, don’t think I will ever retire again.
This is just another topic where things are different depending on the state you are in.
When I talked to my lawyer, he informed me that as a general rule, the courts will honor the contract as long as it is reasonable. The wording in the contract has to be reasonable, the contract has to be readable, and the expectations have to be reasonable.
My understanding is that if he signed a no compete clause, that would restrict him from starting a business or working for a family member (1 year I would think is reasonable). I can’t stop him from getting hire to work for another HI company nor can I restrict him from starting a home inspection business outside the two counties I mainly do home inspections in.
This was my understanding from my local lawyer about the state of Indiana.
Why did you make him a partner? I would think you would have made more money keeping him as an employee.
I tried to hire somebody. Out of 6 people, only one passed the test I gave them. When he came in so I can ask him some more questions and why he answered some of the questions as he did, I realized he either looked up the questions or called somebody to get the answers.
I was mainly looking for that person to know the fundamentals of heat, cooling, electrical, etc., have good communication skills and know something about a computer and the Internet.
Partners worry about the image of the company; they also work harder to make more profit. You have to really develop a plan for advancement for an employee, always have a new goal for them. If you don’t they will look for their own goals.
An employee after time will only put his time in and go home, fact of life.
I have always felt you could dominate any business in south Florida by treating employees better. For Radon and mold in southwest Florida we really don’t have any competitors, our best competition is listed on our websites. Most of them are on the East Coast.
Fear is your enemy, learned that in the 82nd airborne forty odd years ago.
We all approach business differently, I hope you succeed. I am really enjoying our business, I’m the only one working today ( Sat) mainly because I’ having fun.
I would LOVE to work for someone else about now!
There is a lot to do when you go it alone.
If you treat the HI right, there is less on the other side of the fence to make him want to jump!
Non-Compete contracts most often don’t hold water when you just go out on your own. Tennessee is a “right to work state” and they don’t hold up here at all.
However, if you are in a service business where you have clients on a re-occurring basis and it can be proven that the account was stolen by adverse action of the employee, you will win, and the contract seals the case.
As we mostly do one time jobs for a client, the only case you may have is if the client calls in, the employee takes the call and does the work “on-the-side”.
Other than this, it’s called “competition”. A client has a right to take their business elsewhere. If they go looking for your guy because they like him better than you…
Very wise advice!
You made me think of this in a different way. Do you mind if I email you to ask a few questions after I look into this more?