Non-compete agreements?

[Lilamax]

I saw some posts about people moving brokerages, and was reminded of a question I had--do brokerages often ask agents to sign non-compete agreements when they sign on, or is that not standard in the industry?

[stevetrang]

That would be career suicide for any agent to sign. Given that we are not salaried employees, I can't see why anyone would ask us to sign it.

[Toby Lane]

Non-Competes are illegal in a lot of states (or at least uninforceable). You can be forced to sign a non-solicit though. Either will definitely hurt your business.

[Mitch]

Non-competes, from what I know my lawyers told me in my last company, are usually not enforceable. I believe it's because a company can't stop someone from doing business in their chosen field. Something like that...it's been a long time.

[SLP-NYCT]

You can't stop someone from earning a living in their field. Non Compete agreements are enforceable when used properly. For instance: I am selling my business to you. You can have me sign a non compete agreement because you are buying my business, client base and good will.

[jamesww]

You can't stop someone from earning a living in their field. Non Compete agreements are enforceable when used properly. For instance: I am selling my business to you. You can have me sign a non compete agreement because you are buying my business, client base and good will.

This statement is spot on. When it comes to real estate this would basically mean that if the agent sold you his business (contact lists, records, name) then he could be held to a noncompete but I doubt any agent who intends to continue to work in the field would do this.

[00joe]

The non-competes I use are very narrow. Since I do a lot a marketing on behalf of my agents I restrict them from duplicating my marketing in the same neighborhoods.

[RJO Salt Lake]

If your prospective broker includes a non-compete clause in your indepedent contractor agreement, walk away and find another broker--there are plenty out there.

[00joe]

For a general broker i.e. flagged office I completely agree. However, I provide ALL of the leads for my agents. They understand that the clients are mine and can't take them with them.

[SLP-NYCT]

The non-competes I use are very narrow. Since I do a lot a marketing on behalf of my agents I restrict them from duplicating my marketing in the same neighborhoods.

Did you run this by an attorney? Sounds like you are skating on thin ice. Restricting an independent contractor or forcing them to do something ie: Opportunity Time, Attend Office Meetings, Only work certain areas are construed as Employer/Employee relationships. This opens you up to paying payroll taxes on the commissions you pay out. In fact, if you are found guilty of performing in an employer/employee relationship, they can force you to pay payroll taxes retroactively.