Recently was offered a job and 10% of new (virgin) construction company doing work in the exact same field i've been working for the last 15 yrs. They have no experience in this field but believe it to be a money maker. I'm an aquaintence of the co-owner. He is aware of my expertice in the field which is why they made me this offer. They know nothing, I know everything, yet they want me to sign a noncompete clause. Should I sign? Should I accept the part owner offer?
They want me to forfeigt my union pension because they cannot afford to contribute, thats where the 10% ownership offer comes in. Sounds good but what are the ramifications if I start signing contracts?
3 Answers from Attorneys
You are giving up valuable rights in order to enter into an agreement with an inexperienced start-up with majority interest.
You are also buying into the company, which should trigger a review of all documents and restrictions by an experienced Business Attorney.
Call or email for a free consultation.
Your situation raises mulitple issues and serious questions.
At 10% you would simply be along for the ride. As for the non-compete, my guess is what they really want is your contact list. So even if you sign on as only an employee, I would discourage you from signing a non-comptete...or make sure you "own" the contacts you bring into the company and have the company sign an identical non-compete in your favor.
Standard disclaimer: The comments above are based on limited facts and should not be considered legal advice. We do not have an attorney-client relationship. That said, good luck to you and let me know if I can be of further assistance.
As a Franchise Attorney I can say this. A cardinal rule of negotiation is always offer less than you're actually willing to give. The owner (who knows nothing) offered you, who knows everything, 10%. He's willing to give up more than 10%; this is just his starting bet. Go back with a 50% counter-offer and you'll likely end up in the middle somewhere, which is only fair. Beware of non-competes that extend beyond the term of your employment. Speaking of which, make sure you also have an employment contract. Above all, consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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