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Contract Law

Monday, August 31, 2015

Congress Introduces Bill to Ban Non-Compete Clauses Against Low-Wage Workers

Can my employer prevent me from changing jobs to work with a competitor?

Non-compete clauses are an extremely common component to the hiring process, and are used to prevent employees from leaving one company to work at a competitor, presumably taking clientele along in the process. 

In general, a non-compete agreement is enforceable if it is reasonable in scope. In Texas, this means that the agreement must not cover an unreasonably large geographic area (i.e., the entire state of Texas) or last for an unreasonably lengthy amount of time (i.e., ten years). Reasonableness will depend on the nature of the industry, the type of work performed, and the employee’s factual ability to cause financial harm to the first employer. 

However, there is a point where a non-compete clause can go too far, and may actually cross the line into an unlawful restraint on trade. Moreover, as several members of Congress have pointed out, businesses have begun restraining low-wage workers with non-compete agreements as well, creating additional hardship for a population already facing financial struggles. 

In June, 2015, several U.S. Senators introduced the Mobility and Opportunity for Vulnerable Employees Act. This Act, if approved, would prevent employers from attempting to restrain former employees from working for competitors if the workers earn less than $15.00 per hour, less than $31,200 annually, or the minimum wage in the worker’s municipality. 

In the words of Senator Chris Murphy (D-Conn.), non-compete agreements hidden in low-wage worker contracts deliberately trap these workers in low-paying jobs – and that’s unacceptable….I worked hard on this bill because I believe that if you’re making less than $15 an hour, the government has a moral duty to stop companies from exploiting your hard work by preventing you from using your skills and experience to work your way up.”

Currently, a number of low-wage food service companies embed non-compete agreements in employment contracts, preventing counter-service workers from procuring a job at a competitor. 

If you have questions about non-compete agreements, or would like to discuss the proper way to implement this strategy into your hiring procedures, please contact the Kumar Law Firm, serving Austin, Texas and surrounding areas today at 512.960.3808.


Friday, May 29, 2015

Honing Your Negotiation Skills

How Can I Get Better at Negotiation?

Negotiation is a key skill in business. Done properly it can save you money, result in higher profits and help you seal the deal to obtain the right employees, suppliers and contractors. Like any skill it can improve with practice and some good advice.

A recent article in Entrepreneur shares some great tips for improving your negotiation skills. 

1. Prepare

Psychology plays a crucial role in negotiations. If you are better prepared than the other party, you may put them back on their heels and put yourself in a better position. Take time to learn as much about the other party as possible so you can capitalize on your company’s strengths and the other party's weaknesses. 

 2. Find Leverage

Take maximum advantage of your strengths. If you are the only source of a product or service, or what you offer is of much better quality or much lower price than the competition, run with that. If there is great demand and not much supply for what you sell, you are in a strong negotiating position. 

3. Be Willing to Walk Away

If you are in the position where you absolutely need an agreement, you have no leverage and you are not really negotiating. You are just setting the terms of your surrender. If the other side’s final offer is simply unacceptable or the people you are negotiating with are arrogant, demanding or inflexible, is it really worth the effort?

4. Both Sides Need a Win

If there are no benefits for the other side, there is no reason for them to agree and negotiations will be a waste of time. Be proactive and creative. Ask questions. What are they looking for and what will be acceptable to them? If you were in their shoes, what would you really want and what would you be willing to do to get it? 

Sell them on how the deal that you want will benefit them. If you see negotiations as strictly a power game where you impose your will to the maximum detriment of the other party, you probably will not come to an agreement and if you do, it will likely be the last one they ever sign with you.

5. Close the Deal

Have the endgame in mind as you negotiate. If there are several issues to be negotiated, work on the ones that will be easiest to agree on first. Once you start getting those out of the way, negotiations will build up momentum. The parties will feel more comfortable with each other. Each side will be more willing to compromise to close the deal because they do not want to have wasted all the time and energy spent in resolving the lesser issues. 

If you need help negotiating a contract in the Austin area, call business law attorney Sanjeev Kumar at (512)960-3808 for a consultation today.

 


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