covenant not to compete

Software. Marketing. Training. Running your business.
#1
zl28  
Posts:
2066
Joined:
22-Apr-2014 10:27pm
Location:
usa
This preparer is going to do some work for my remotely.

She forward her engagement letter

It says she will not solicit business from my clients at any time.

I was going to have her change that to will not solicit my client at the later of the maximum amount allowed by my state's law which should be 12 or 18 months.

I've read unlimited restrictive covenant is not enforceable.

Secondly, anyone think i should add anything else...like what the penalty will be for soliciting my client.
 

#2
Posts:
2468
Joined:
24-Apr-2014 7:54am
Location:
Wisconsin
This is a highly state-dependent area and you might be best advised to consult with an attorney in your state, or the preparer's state if different.

An ounce of prevention is worth a pound of cure. If your preparer won't have any client contact then you will alleviate a lot of the potential risk anyway.
 

#3
makbo  
Posts:
6840
Joined:
23-Apr-2014 3:44pm
Location:
In The Counting House
Non-compete (your subject of the thread) and non-solicitation are two different things.

Who will be the signing preparer on the returns?
 

#4
zl28  
Posts:
2066
Joined:
22-Apr-2014 10:27pm
Location:
usa
i sign...i think they are both the same things..non-compete means you don't go and solicit my clients; am i wrong?
 

#5
sjrcpa  
Posts:
6472
Joined:
23-Apr-2014 5:27pm
Location:
Maryland
Noncompete means you don't set up shop down the street/defined geographic area doing the same type of business.
Both are frequently part of one agreement.
 

#6
zl28  
Posts:
2066
Joined:
22-Apr-2014 10:27pm
Location:
usa
didn't know that....thank you all for posting.
 

#7
makbo  
Posts:
6840
Joined:
23-Apr-2014 3:44pm
Location:
In The Counting House
Non-solicitation is a subset of non-compete. In CA, you can agree to the former, but the latter is barred.

"This is a highly state-dependent area "


Since the remote worker would not be the tax preparer, they also have penalties under the federal tax code for using tax information for purposes other than tax preparation (i.e. soliciting your clients) without written consent. (Sec 7206 or whatever it is). So if they are afraid of that, then they can never really solicit the clients whose PIA they obtained through working for you.
 

#8
Posts:
2468
Joined:
24-Apr-2014 7:54am
Location:
Wisconsin
That's an interesting point, makbo, but a §7216 violation does not compensate zl28 for the wrong committed against him/her. (As an aside, are there any statistics on how many §7216 penalties have been levied?)
 


Return to Business Operations and Development



Who is online

Users browsing this forum: Google [Bot], smtcpa, wombataholic and 34 guests