NON-COMPETE AGREEMENTS IN BEAUTY SALONS
HOW NON-COMPETE CLAUSES CAN HURT YOUR BEAUTY CAREER OR YOUR BUSINESS
Whether you're building a beauty business or operating as an employee the question of non-competes come up often. These agreements may be a document by themselves, or just a clause added to an employee or independent contractor agreement. But why are they there, and what are these non-competes good for? An incorrectly used or incorrectly communicated non-compete can scare away valuable opportunities to work together.
WHAT ARE NON-COMPETES?
Non-competes are agreements or paragraphs that set out what the parties can and cannot do. They often restrict workers:
from setting up their own business or working for a competitor within a certain radius from the salon;
from using specific colour formulas or techniques outside of the salon; or
in how they are allowed to market themselves, if at all, online i.e. through social media, blogs or otherwise.
WHAT ARE THE PROS FOR NON-COMPETES?
Protect important proprietary and confidential information: This includes marketing strategies, trade secrets, intellectual property, specific protocols and anything else that might give the beauty salon a competitive advantage - or anything that sets the business apart from the rest.
WHAT ARE THE CONS FOR NON-COMPETES?
Non-Competition agreements Stifle Innovation, Threaten The Economy, and Limit Career Growth: Non-competes are too often used as a means of controlling worker loyalty, and are not at all related to competing. In reality, many workers are prohibited from engaging their own clients through social media, and this severely limits a brands ability to be seen as relevant among its clients. These clauses also limit the career growth and skill-building of a worker. Should the beauty salon decide not to cross train or skill-up its workers then the alternatives are limited. This causes workers to be under-skilled and under-motivated, limiting their opportunities. In terms of career growth, this also means that the industry will outpace the individual workers as information and skills overtake them in their stagnant roles.
WHAT SHOULD NON-COMPETES NOT BE USED FOR?
Securing worker loyalty: Workers should belong to a workforce because the salon is the right place to be.
As Confidentiality Agreements: Non-competes should not be used to replace confidentiality agreements - these service completely separate needs.
Protecting Weak or "Non-Starterships": Non-competes are for established or invested brands. Using a non-compete outside of having something to protect means both parties are limiting themselves.
WHAT SHOULD NON-COMPETES BE USED FOR?
Defining boundaries: If a non-compete is necessary then use it constructively. Use it to establish the rules of engagement for clients once the worker has left the beauty salon. It is widely expected that clients will sometimes follow their favourite aestheticians and artists, but this choice should be up to clients alone.
ARE ALL NON-COMPETES ENFORCEABLE?
It depends. Like any contract it is up to the parties to enforce the terms and that means getting lawyers involved, and possibly even going to court. When it comes down to it you'll never know if your non-competition agreement is enforceable unless a judge decides to enforce it. If a non-compete provision is unrealistic and excessive then a judge may not uphold it, rendering it useless. Non-competes are not automatically enforceable by themselves. A court order is needed to enforce the terms.
WHAT HAPPENS IF A NON-COMPETE IS NOT ENFORCED?
Like any protective rights, if they are not exercised they are at risk of being lost. If a party to a non-compete fails to act and fails to protect their rights from a non-compete then all rights may not be enforceable or held up by the court. So if you are a member to a non-compete agreement (or clause) then congratulations. It's your new baby, and you must tend to it like one. Like any agreement or contract - if you don't use it then you lose it.
HOW DO YOU KNOW WHETHER YOUR NON-COMPETE IS LEGAL OR VALID?
As with all contracts or agreements it is key to have them reviewed or drafted by a lawyer who is:
Licensed and working in the jurisdiction where the agreement would be enforced
Found to be in good standing by their law society or professional association.
If you found your agreement through a free website, it may not contain all of the necessary ingredients for it to be enforceable.