Non-Compete Contracts: To Sign or Not to Sign?
Non-Competes. Some salons make you sign them before you’re even allowed to hold a pair of shears in their salon or are given a chair. But should you sign on the dotted line? As a general rule, non-competes are put in place to protect the salon from loosing their business when a stylist chooses to leave. After all, as a salon owner, you work hard to attract, and retain your clientele, so shouldn’t be allowed to protect your business without being named a villain?
But what about the unhappy stylist? If the situation at your current salon is less than ideal, shouldn’t you be allowed to move on to another location or open your own business? Shouldn’t your rights be protected too?
Most importantly, do these contracts even hold up in court? BTC Member Leslie Paul was curious when a friends told that non-compete contracts rarely hold up in court because employers can’t keep you from making a livelihood in your trade. Another friend informed her that indeed, they do hold up in court? So…who is correct? Naturally this peaked our attention, so we went straight to the experts—YOU—and asked which side of the legal line you fall into. Here’s what you had to say.
Don’t Sign One—EVER!
1. I didn’t sign a contract, but when I left a salon under friendly terms I informed my clients where I was going. The clients I retained while working at the salon, were told I was leaving and I scheduled their next appointment with a stylist in the salon and left my formulas. EVERY SINGLE CLIENT then proceeded to find me, via Facebook and word of mouth, or a friend in the salon. At that point, I felt I did the right thing and my client were free to go where they wanted. If you are a good stylist, they will follow you, contract or no contract. But, sometimes being classy and not burning bridges also shows your clients, and former boss and co-workers what type of person you are. Always try to raise the bar. We need more stylists with integrity in this business, then we wouldn’t need contracts. – Donna Jamison-Heffner
2. I’ve never worked in a salon that had this. I am a very successful stylist. If I even got wind that someone needed this to run their salon, I would be out of there in a hot minute. Loyalty of your stylists’ is built through trust and confidence.This is my answer: who cares if they “stand up,” just stay away from them. Not every shark bites, but I don’t swim with any sharks. – Eraka McCulla
3. Yes, the owner invests a lot of money into building a salon. The owner also turns a profit. At the end of the day, the stylist/client relationship is what pays the bills. And the stylist is the one who nurtures the relationship with the client. It’s wrong to hold the stylist and client hostage. It’s not the building that clients are loyal to, its the stylist. – Samantha Caskey
4. I have seen a few stylists sued by former employers over non-compete contracts. In Illinois, the shop owners almost always win. I have seen them sue the stylist for compensation too! NEVER SIGN! Also, be aware of salons that want you to enter all of your clientele into their database. If you try to retrieve the information when you are leaving for another job, some salons consider that ‘stealing their business,’ even though they are your customers. (Some of the big chain salons are bad for this.) Watch for this in any contracts, because salon owners sue stylists over this too. A good rule of thumb, if the salon owner had a lawyer draw it up for you to sign, have your lawyer go over it from top to bottom before you sign it. – Debbie Deardeuff
5. I signed one thinking I would be happy at this salon, and thinking they don’t hold up in court. When the owner turned into a witch, I left and opened my own salon. She found out and sued me, but I won in court. It cost me, but it was worth it. I don’t make my stylists sign them. Stylists will always come and go–times have changed. – Lisa Satterfield-Jack
Why You SHOULD Sign
1. As a owner of a commissioned salon, every stylist signs one! As an owner, you pay for advertisement, promotions, taxes, and bookkeepers, so you don’t have to do your own tax work. Plus, there is education for YOU, products, a backbar and retail…I personally put clients in my stylist’s chair from overflow and walk ins! Yes, clients will go where they want…but if there is a mileage clause in the contact, at least the stylist can’t open across the street! – Gayle Running
2. A business owner that wants to protect their investments is a SMART business owner! I think it’s incredibly sad that owners think they have no rights–they are held hostage by negative employees threatening to quit if the salon isn’t run their way. – Cindy Brown
3. If the owner puts time and education into a stylist it is ok to sign a non-compete. If you are working for someone who is not giving you anything to help you, then I would not sign. Also, be sure to check on the mileage in the contract. Always have a lawyer read the contract over if you are not sure. – Carol Kochanski-Phillippi
4. Non-compete contracts will hold up in in most states. Unfortunately, this happens all the time, a stylist with little to no clientele works for a few years on commission, receives further education in the industry and builds a clientele, then recruits their clients to their new salon suite. It’s not right! These contracts are very reasonable. Salons are costly to own and operate. The salon owner needs to be able to protect itself. – January Knight
5. ‘Right to work’ has nothing to do with a non-compete contract. And yes, it is enforceable. I knew someone who was taken to court, and lost to the owner of her former salon. And, the distance in miles is measured ‘as the crow flies.’ The contract must have an expiration date. In most cases, I think they are not pursued, but more likely used to let stylists know that when they build a clientele at a salon as a commissioned stylist, that the owner is serious about keeping the clients in the salon. As they should be. – Debra Whitney Cole
6. In my first salon, I made the unfortunate mistake of signing a non-compete contract that stated I could not open or work in another salon within five years or a five mile radius of the salon. I didn’t stay there long because of the drama, but my employer got what she wanted. I now work in another city. No competing! I think it is a good idea to protect yourself, and should be in a non-compete contract. – Alicin Green Kerr
While non-compete laws vary from state-to-state, the important thing to remember when drafting an agreement is to make sure it’s reasonable and fair- don’t give the courts a reason to invalidate it. Kristyl Addison sums it up perfectly, “There is no right or wrong answer to this question. Each stylist needs to decide for themselves if signing is right for them, but negotiate your terms. Everything is negotiable, even a non-compete. You don’t have to sign what they give you, you have the right to negotiate the terms that you are comfortable with.”