Question: Non-Compete???

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Anonymous

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If we are purchased by Quest, LabCorp, CPL, etc.

How would our current non-compete work? Technically we would be changing companies. I really would not be excited about either of these three labs buying Solstas.

Should they decide to cut me loose, I am not signing anything that ties me to a non-compete.

Let's have a practical and thoughtful discussion.
 






With most business buy-outs, the existing employee's non-compete agreement will convey with the purchase, because once purchased, the originating company (in this case, Solstas), will cease to exist. Nothing to worry about in this instance.

Going forward, many companies are requiring non-competes so they can protect the business that was gained while you were employed by them and this is very prevalent in any sales position. If you do not sign the non-compete agreement, chances are you will not be hired by that particular company.

Hope this helps!
 












Solstas will continue to exist as a legal entity even after being sold to Quest and that will make any Solstas agreements enforceable. At some point you will be asked to sign a new non compete with Quest but the Solstas no compete will remain enforceable as it pertains to the Solstas portion of the business. Legal agreements do not immediately dissolve or disappear due to a business sale because they are two-sided.
 






Excellent response. I do not think one would be considered to be competing if the company they worked for were purchased. Wouldn't make any sense, and could not see that holding up in court.

I could see, however, if Solstas were purchased by Quest and a sales rep decided to work for LC or Sonic then that would be considered a violation of the non-compete. How would you see it?
 


















Anonymous said:
Excellent response. I do not think one would be considered to be competing if the company they worked for were purchased. Wouldn't make any sense, and could not see that holding up in court.

I could see, however, if Solstas were purchased by Quest and a sales rep decided to work for LC or Sonic then that would be considered a violation of the non-compete. How would you see it?
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The only thing that would change if the company you work for is purchased - the name. The purchaser is buying the business and assets of Solstas - including the current employment agreements and intellectual property. Those are real things that have a value and are conveyed for a price.

For example, if Quest buys Solstas then you are immediately an employee of Quest. The customers you sold on Solstas are now customers of Quest. If you go to LabCorp, Sonic or any other reference lab and try to win those customers away from Quest you will be in violation of your non-compete/non-solicitation. You will be issued a 'Cease and Desist' letter requiring you to immediately stop soliciting Quest/Solstas business. If you continue your activities then you will be sued requiring you to hire legal counsel which will be very expensive for you. Also, the new reference lab you are representing can be held liable and will be going to court as well. Regardless of whether you eventually win in court or not, you will be responsible for the legal fees to defend yourself and Quest has DEEP POCKETS. And the entire time, the Cease and Desist will be in effect which keeps you from selling lab services.

Here's the kicker: No reputable lab is going to hire you knowing you have a non-compete/non-solicitation in place that limits your ability to sell for them. They don't want the liability and the limitation of your selling.

You must honor your non-compete. If you're worth your weight in salt then you can sell something new, in a different territory or sell to new customers for a year while your non-compete runs out. You signed it - live up to your commitment!
 












Anonymous said:
Oh Brother!

Son, you gotta go out there and own your performance.

Own it and you will be rewarded.

If you are not willing to give 110% the son, you are not committed to winning.

Oh Brother!
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Classic corporate gibberish that has no meaning in the real world. You might as well be saying "Yabba da ba do!", it makes as much sense as your corporate mind-speak! Learn to speak real English instead of parroting others.
 






Don't forget about the "Right To Work" States. The Corporate Clowns will send you a couple of letters, but they will not follow through on their threats. If a former customer reaches out to you, it is not Solicitation. Document everything, be prepared and counter Sue these stupid companies.
 






Anonymous said:
Don't forget about the "Right To Work" States. The Corporate Clowns will send you a couple of letters, but they will not follow through on their threats. If a former customer reaches out to you, it is not Solicitation. Document everything, be prepared and counter Sue these stupid companies.
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"Right to Work" and binding contracts to protect intellectual property sometimes conflict. Get a good attorney because you're probably going to find you'll have a right to work not selling reference lab services against your former employer. Plenty of sales jobs out there that you have a right to work in.
 






Anonymous said:
"Right to Work" and binding contracts to protect intellectual property sometimes conflict. Get a good attorney because you're probably going to find you'll have a right to work not selling reference lab services against your former employer. Plenty of sales jobs out there that you have a right to work in.
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I'm now in Cholesterol. So I can't sell to our same clients... What about ones I know they don't have?
 












Anonymous said:
If we are purchased by Quest, LabCorp, CPL, etc.

How would our current non-compete work? Technically we would be changing companies. I really would not be excited about either of these three labs buying Solstas.

Should they decide to cut me loose, I am not signing anything that ties me to a non-compete.

Let's have a practical and thoughtful discussion.
Click to expand...

You'll have to read your non-compete, but poster #8 summed it up quite well IMO. And many noncompetes have verbage that specifies that they transfer to the acquiring entity.

To sell a book of business and protect the buyer is truly the purpose of them in this industry anyway, right? Every lab is offering the same test platforms by the same manufacturers, or it's an LDT that sales certainly doesn't have the recipe for, and probably isn't that unique anyway. Despite the smoke blown up your ass about the reasons for them, the fact is that labs don't have us sign these to protect their intellectual property or trade secrets, because they have none.

In another industry, a player who is that much of a threat might at least be paid to sit on the sidelines for a certain amount of time. But not in this one.

So, thank you for your dedication to the company, and for helping us to build something that someone else wants to buy. We're sorry that the new owners already have someone doing your job and therefore don't want or need you. Remember that your non-compete is still in force on your way out the door. Best of luck in finding a new job in the pharma, device, or other industries, and competing for them against your former co-workers who are also now on the market with the exact same work experience that you have.

In summary, if you've already signed one it's too late to think about what "might" happen. One day, one way or another - you take a new job, retire, they are acquired, they fire you - your employment there WILL end. And that's when the noncompete begins.
 


















Anonymous said:
The only thing that would change if the company you work for is purchased - the name. The purchaser is buying the business and assets of Solstas - including the current employment agreements and intellectual property. Those are real things that have a value and are conveyed for a price.

For example, if Quest buys Solstas then you are immediately an employee of Quest. The customers you sold on Solstas are now customers of Quest. If you go to LabCorp, Sonic or any other reference lab and try to win those customers away from Quest you will be in violation of your non-compete/non-solicitation. You will be issued a 'Cease and Desist' letter requiring you to immediately stop soliciting Quest/Solstas business. If you continue your activities then you will be sued requiring you to hire legal counsel which will be very expensive for you. Also, the new reference lab you are representing can be held liable and will be going to court as well. Regardless of whether you eventually win in court or not, you will be responsible for the legal fees to defend yourself and Quest has DEEP POCKETS. And the entire time, the Cease and Desist will be in effect which keeps you from selling lab services.

Here's the kicker: No reputable lab is going to hire you knowing you have a non-compete/non-solicitation in place that limits your ability to sell for them. They don't want the liability and the limitation of your selling.

You must honor your non-compete. If you're worth your weight in salt then you can sell something new, in a different territory or sell to new customers for a year while your non-compete runs out. You signed it - live up to your commitment!
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This is only partially true. If you are good you will get offers. If you take the job you will get warning letters,big deal. Stay clear of the accounts you sold for 1 year and go after other accounts. Again if you are good that won't be a problem. After one year say hello to some Los customers. Some should welcome you and some may just say nice seeing again but we are happy with where we are. Bottom line is non-competes should not effect you too much. You just have to be smart about it. Good luck
 






Anonymous said:
This is only partially true. If you are good you will get offers. If you take the job you will get warning letters,big deal. Stay clear of the accounts you sold for 1 year and go after other accounts. Again if you are good that won't be a problem. After one year say hello to some Los customers. Some should welcome you and some may just say nice seeing again but we are happy with where we are. Bottom line is non-competes should not effect you too much. You just have to be smart about it. Good luck
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I agree with this advice. The sad truth is far too many reps get desperate/pressured to have a fast start in their new position and resort to trying to immediately go after the practices where they feel like they had the best relationships and easiest opportunity to make a quick flip - thus they get into non-compete trouble.

Quest will come after you if you violate your non-compete and go after valuable clients in your previous territory. They will make you go to court and you will have to pay attorneys to defend yourself. It is simply not worth the money, time and hassle you will put into it. If you do not have the ability to sell to new customers in a geography then I recommend you get out of the reference lab sales arena for a while.
 






Anonymous said:
If we are purchased by Quest, LabCorp, CPL, etc.

How would our current non-compete work? Technically we would be changing companies. I really would not be excited about either of these three labs buying Solstas.

Should they decide to cut me loose, I am not signing anything that ties me to a non-compete.

Let's have a practical and thoughtful discussion.
Click to expand...


One issue in all of this is were you terminated without cause (ie layed off) then it may impact this non-compete especially without any compensation (ie severance) which labs rarely give sales people. Pay attention as if it is true that they bought your lab and they own the employee relationship then they must also honor the commission plan. This is a very sticky area.
 






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