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Ask a Studio Owner
no compete contract
en>fr fr>en
By twirl365 Comments: 73, member since Thu May 11, 2006
On Thu Sep 21, 2006 05:52 AM
Made sticky by Theresa (28613) on 2006-11-16 09:44:36
Does anyone know where I can get a copy of a contract for associate and student teachers? I am looking for the clause that states you can't take students with you and you can't start a studio within a certain amount of miles within my studio.
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55 Replies to no compete contract |
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Theres alot of discussion on this subject however, I have been told by multiple sources, many of which work in major dance education for colleges, and large schools in urban setttings to smaller studio owners, that no compete contracts have no legal standing in court.
I know some people use them as sort of a deterent, in some cases the instructors maybe hesistant after signing simply because they do not know the law to not open a place or teach within a certain radius, but from a legal stand point, should you take someone to court over this issue, no matter how well the contract is written, the court will not side with the studio because they claim that the contract deters the instrcutor from making a living after employment has ended.
Something to think on.
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| no compete contract
en>fr fr>enBy allthatdance
Comments: 709, member since Tue May 31, 2005
On Thu Sep 21, 2006 11:50 AM
I agree with Tylerwing. I have never had a no compete clause in my teachers contract (which by the way, I call a teaching agreement). I don't feel it's right to keep a teacher from making a living. Last year I had 2 teachers that taught at 2 separate studios. One was very professional and was able to keep the studios separate. The other was not. However, they both graduated college last year and are no longer teaching for me this year. The one who did not act professionally, tried to leave and yes, she took a few students with her. But I hold no hard feelings toward her or the students.
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| No compete vs. non solicitation clauses
en>fr fr>enBy Dancr4ever
Comments: 88, member since Sat Mar 27, 2004
On Sat Nov 11, 2006 10:44 PM
No compete may not hold up in court but a no solicitation clause will.
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How? For much the same reasons that banks hardly ever loan money to new dance studios, students cannot be considered physical property.
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| re: no compete contract
en>fr fr>enBy fountainarts
Comments: 2738, member since Thu Jun 17, 2004
On Sun Nov 12, 2006 08:25 AM
There has got to be a way for this to hold up in court..???
You would not work for HP and also Dell for example.
Taking clients from others you have worked for is not professional. We do have a few students from other studios but they sought me out, I did not solicit them. I think it is unethical to do so.
JMO
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Thats what is done in the world of sales daily. My partner is a salesmen. His job is to steal costumers everyday! In business you take a consumer and look at their need, if you can meet that need better then the person currently offering the service then a person in a sales position won't give a second thought to "Gee that guy down at At&t is going to miss the commision on this cellphone here" They don't care.
Just because our business is one of a more personal one on one nature doesn't mean we are immune to the same ideal.
Its not wrong or right. Its the world.
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| re: no compete contract
en>fr fr>enBy tappin_cait
Comments: 377, member since Mon Oct 03, 2005
On Sun Nov 12, 2006 03:54 PM
I agree with Adrenaline - we actually just covered this in my law class (I'm taking Business Law at a local college to brush up on my busines skills). Adrenaline's right in that if the non compete clause is seen as 'interfering with the teacher's right to make a living', it won't be considered in court.
Courts will enforce a no compete clause only if they think its "reasonable", which usually means no more than a radius of 3-5 miles away from your studio and for a length of time of no more than 2 years. As far as keeping your customer list confidential, I'm not sure if there's a way to word the contract so that it states you can't steal the customer information or 'trade secrets'.
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| no compete
en>fr fr>enBy Diamonte
Comments: 39, member since Sun Jul 14, 2002
On Sun Nov 12, 2006 07:55 PM
competeservices.com emailed a newsletter about this. They said you should take them to court for what you think the student is worth. That's advertising and everything. I will look for the newsletter because I save them all and post it. Good luck and don't allow to much contact with your younger students and keep her away from the studio business. Never let your guard down because all though you don't want to stop anyone's way to make a living you don't want to just hand your business over to anyone either.
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| re: no compete contract
en>fr fr>enBy DancerNA
Comments: 366, member since Sat Jul 08, 2006
On Sun Nov 12, 2006 08:30 PM
The costumers themselves are not your phycial property, but the paperwork with their personal information (telephone numbers, addresses) is. If you have proof that that was somehow taken, or copied, that just might. My personal feeling is, if someone is going to be that underhanded, it always comes back to bite them in the rear. A teacher before me, did this to my old boss, stole addresses and wrote letters to students saying that her business was closing and that it was requested they follow her. She lost A LOT of students, including most of her senior company. Three years later she had to move locations mid-year b/c she could no longer afford her lease, this year she had no choice but to sell the business. What comes around goes around.
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| Non-solicitation clause
en>fr fr>enBy Dancr4ever
Comments: 88, member since Sat Mar 27, 2004
On Mon Nov 13, 2006 11:15 PM
The students aren't your physical property but they are students of the studio, not of the teacher. Also, paperwork, students personal information, etc. are all properties of the studio and taking them is illegal.
Non-compete clauses that are reasonable can and have been honored. It has to be a realistic distance (not 15 miles or more) and for a certain length of time. There's a chance it may not be upheld but if it's reasonable it may be (and has been). The non-solicitation clause has been held up twice to my knowledge and I only know 2 people that sued because of it.
At the least it lets the teacher know that you do mean business if they fail to honor the agreement they sign and at as a deterrant(but you have to be able to follow those words with action if necessary).
There's little respect and people are into things for what they can get out of it. I would never think of stealing the efforts of my boss who has worked years for what she has and I never did. I've seen and heard of way too many that have lost everything because of the unscrupulous actions of employees. It happens in business all the time. The only difference between a big business and a dance studio is the size and that our business is a personal service one. That makes it even harder and hurt more when someone purposefully sets out to deceive us with the intention of hurting our life's work. We make enough mistakes of our own along the way!
There is room for everyone someplace, just do it like everyone else has started out and remain ethical at all times. Someday it could be your teacher doing it to you.
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Your student info/client list is yours. SO, are your teaching methods, studio methods etc. You can have an "agreement" stating that none of this info is taken if a teacher leaves. I have a contract that I use and all of my teachers willingly signed it- except for one I didn't hire b/c she spilled the beans when it came time to sign the form that she wanted to open a studio. You have to cover your back......
by the way, I consulted my lawyer. He did not say anything about it not standing up in court. You cannot prevent someone from teaching elsewhere, but you can prevent them from opening within a certain distance within a certain time if they sign the contract.
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| re: no compete contract
en>fr fr>enBy fossedad
Comments: 226, member since Thu Oct 12, 2006
On Sun Nov 19, 2006 10:14 PM
Laws on this vary by state. In some states, all non-compete clauses are illegal and having them in your contract makes the entire contract void. Gold Rush had a list of which states allow non-compete clauses not too long ago. Maybe it's on their website.
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A Non-Compete that is reasonabel will hold up in court. However, you will be better off with a non-solicitation. If you leave a studio where you are teaching and then tell, call or send information to students that you have taught at that studio, that is stealing. You can be prosecuted and found guilty of theft by desception (sp). It's kind of like corporate espianage(sp) (too lazy to do this in word to check spelling first !)
This is where business ethics come in. Anyone who has taken a course in business ethics will tell you. Tyler, as far as your partner being in sales he is not stealing those customers from the company where is was or is employed is he? He did not go into thier data base and take the names and numbers of those clients did he? If he did that is a crime .
I know of a studio who had a teacher leave to open her own studio and took names etc. of all of the students of the former studio. She was prosecuted and the previous employer was awarded 3 years of back income taken by the teacher.
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| re: no compete contract
en>fr fr>enBy fossedad
Comments: 226, member since Thu Oct 12, 2006
On Mon Nov 20, 2006 04:13 PM
And if you use a mailing service to send your piece to every household in town, then what? Are you supposed to tell them "except the following 100 households"?
Again, these laws vary by state, and following advice on a message board like this would be a big mistake.
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Fossedad a direct mailing does not count. It is a very gray area I agree. But there are those teachers who have taken a print out or made copies of names and addresses to specifically target them for thier own studio. It's not only ethically wrong it is stealing.
If the kids find you because you did a direct mail or they saw your ad. Great all is fair . But using your former employer as a spring board for your own business is wrong.
BTW, I have a copy of some of the dance orgaizations rules and in each of them there is wording specifically for this situation. Try and look at NADA, DEA and DMA and you will see what I mean
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| re: no compete contract (karma: 1)
en>fr fr>enBy fossedad
Comments: 226, member since Thu Oct 12, 2006
On Mon Nov 20, 2006 07:34 PM
I am 100% of the opinion that it is wrong and unethical for a teacher to leave his or her studio and open up nearby. (But as we all know it happens all the time. It's also clearly wrong to murder someone. But the fact that something is wrong, sadly, does not stop some people from doing it anyway.) Of course I hope it never happens to me, but if it did I would of course be upset. But I wouldn't be extra upset on top of that just because I think they may have copied down addresses and/or phone numbers. Teachers probably know their students' last names, and there's a little thing called the phone book that makes all the info they need readily available. the real insult would be becoming your boss' competititor. The means of getting that news out, to me, is beside the point.
That said, and back to the point, no matter what guidelines and Dance organization lists, the law of the land rules, and in my state, you cannot have a no compete clause. Putting it in would void the entire contract. Anyone who wants to include one needs to speak to an attorney, not a studio owner on an internet board.
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| re: no compete contract
en>fr fr>enBy tinydancers
Comments: 33, member since Tue Jul 04, 2006
On Sat Dec 23, 2006 02:43 PM
Sad but true, where I worked before having my own business a trusted teacher of 22 years up andleft 4 days after the recital and opened her own studio across the shopping center, only being separated by the highway. SInce she staged all the major performances anyone that wanted to continue in her productions knew it wa the kiss of death not to go with her, WIthin a year she had gleamed all of the good teachers. The original SO was broken and I watched her decline into a very deep depression. Of course we all wanted to leave as the numbers went from 600 students down to 160. Finally she gave in and just closed the doors. It was so sad and heartbreaking to watch. The new studioand all of the teachers felt absolutley no remorse in hurting this SO who had taken them all in when they had little or no experience. THis was the way she was repaid! She just did not have the fight left in her to continue. SO SAd....
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How very sad for her. That happened to another wonderful teacher about 35 minutes from my school. The ballet teacher left, solicited kids at her recital and took enough to make the other owner decide to sell or close. She wound up closing.
But she decided to pursue another career and is happy again. She decided to make lemonade with her lemons.
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| re: no compete contract
en>fr fr>enBy toetapper1 
Comments: 365, member since Thu Jan 26, 2006
On Wed Jan 03, 2007 07:47 PM
While working & for 3 years after leaving within a 15mile radius holds up in Wisconsin - it's been tested!
I always have my teachers sign one & let them know it will stand up in court. I also let them know that while they working at my studio, they are welcome to come & ask me if they want to do temporary work or have other opportunities. Many times I let them and then they so appreciative, they are less likely to leave then. But I always protect myself, I've been burned too many times.
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| re: no compete contract
en>fr fr>enBy encore2006
Comments: 20, member since Sat Aug 19, 2006
On Sat Feb 10, 2007 09:26 PM
It is pretty difficult to enforce, especially if you are in a small town. The non-compete contracts conflict with a person's opportunity to work
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| re: no compete contract
en>fr fr>enBy hmariea 
Comments: 176, member since Thu Aug 25, 2005
On Sun Feb 11, 2007 06:10 AM
WOW! You guys all have so many good things to say on all points of this issue.
I make my teachers sign something, if for nothing else it is to let them know I am serious about honor and honesty.
I have had a studio, that I used to teach at, some of their advanced studnets left and come to my studio one town over. It was so hard, I did no soliciting of any kind, they sought me out ( I had been established for years) although that studio and I no longer speak we both run sucessful studios to this day. On the flip side I have had students leave for my old studio. It is part of the business. Kids are young and don't necessarily have loyalty to you, even if you think they do. You need to check the emotions at the door even when it hurts. This is a business and you cannot make students dance with you.
Parents too, don't always care about the best training for their child they are worried about the location that is most conveinent for them. Or cheaper. Or trendier. You guys all know I am sure we have all seen it!!!!
My old assistant director that I had for years left at the end of last season. She has taken the year off and is now going to open her own studio in the next town. At the end of last year she tried to take my intermediate students with her and open this last year. I had had a hard year, and trusted her so much that I didn't find out until this year. I vowed I would never let one teacher have that much control in my studio EVER again. Maybe I am a bit untrusting now, but I refuse to get burned because I let my love for a friend blind me.
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In certain situations a non-compete does hold up. Like in a sale agreement. Eg. I sell my studio to Miss Suzie. In my sale agreement if Miss Suzie says I can't open a school within a 5 mile radious for 5 years it is legal and will hold up in court. The fact is that there are many loopholes to the laws. The fact that you sign a contract even if the non-compete laws are at quesiton you still can be held to the contract as long as you sign it with full knowledge of what you have signed.
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| no compete contract
en>fr fr>enBy rockthehouse
Comments: 641, member since Mon Feb 26, 2007
On Wed Feb 28, 2007 10:48 PM
I fear this is about me....only in a year or two. I to have been burned. I required my staff @ 7 teachers to sign a non disclosure/non compete contract. I, who have never really competed with the other studios in the area, now have my own right down the street. I feel the most tremendous pressure to make this the most kick butt show ever! Usually I can handle the pressure, but this go around it is very, very tough!!
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| re: no compete contract
en>fr fr>enBy idance2
Comments: 341, member since Sun Aug 08, 2004
On Mon Mar 12, 2007 04:01 PM
I taught on a small island in Alaska, where they tried to pull this, for 2 years no less ! It is bogus, you don't find it in professions (dentists,doctors,etc) and it undermines fair play. If you need to be the," only game in town," you have a problem. Clients should come to you because of what you offer, not because you shut-out other talent. Believe in your own abilities and school; then let your collegues teach in gyms, their own shools, rec. centers of whatever. Take the higher ground. Jen.
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| re: no compete contract
en>fr fr>enBy AdrenalineDance 
Comments: 1397, member since Thu Sep 29, 2005
On Mon Mar 12, 2007 09:34 PM
Edited by AdrenalineDance (142150) on 2007-03-12 21:37:01
Edited by AdrenalineDance (142150) on 2007-03-12 21:46:04
Regardless of all the dressing done to statements on this subject the fact of the matter is that no compete contracts hold no ground in the legal realm when talking in terms of dance. Competitions can't do it to their judges and studios (although they do as a deterent) can't hold their teachers to it legally.
Daninqueen, I have far better choice in men then criminals.
And infact you are talking about an entirly different subject.
You cannot be held legally for soliciting students from another studio. no matter what state your from. Gyms do it for members, retail stores do it for customers. etc etc.
What you are talking about is theft which is NOT the same thing. A List developed by any business is infact property of the developer.
But If I happen to know that Jenny Sizzlinshoes dances for Center of Dance and Falling on her head, and I decide I want to offer her a scholarship to dance with my company, there is not a darn thing legally anyone can do about it.
If I taught for Studio falling on my head, and then suddenly opened my own studio in the exact same town acrossed the street, I can legally send mail, make phone calls, or physically approach any previous student so long as I DID NOT obtain their contact information from the other studios internal property. However there is nothing that says that I cannot do my own research and find out how to contact them. What you cannot do is steal physical property of any sort from the other studio or approach their students at events sponsored or held by the other studio. (I knew someone who once went to another studios recital and began handing out panphlets... TACKY!)
As usual Fossedad is 100% correct in saying that taking legal advice from a message board is asking for trouble.
If you do take one thing away from this thread, my hope is that it is consulting a lawyer. And please by all means, comeback after and share with us what has been said.
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