Comments on Former employee stealing accounts and accessing central / local competitor stealing accounts May 31, 2024

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comments on Former employee stealing accounts and accessing central / local competitor stealing accounts
May 31, 2024

Comment on Former employee stealing accounts and accessing central station from article on May 23, 2024

Ken
The use of Kirschenbaum employment contract is alarm dealer tool 101. If anyone has a reason not to use; and I mean use today please let me know. We finance businesses and the use of Ken s contract is a risk reducer and makes our financing safer and therefor a dealer more eligible for financing. Also a money maker for selling your company.
James T. Wooster, Sr
Alarm Financial Services
jtwooster@alarmfunding.com
cell 917 747 5379

Response

            Having employees sign Employment Agreements is a best practice and will enhance the value of your business; it will also hopefully avert issues that you’d prefer to avoid.
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Another comment
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Ken,
Commenting on Robert F’s post on May 23rd about an ex-employee pilfering, and interfering with accounts. I have worked with similarly situated alarm companies at least 30 times over the past 25 years and they have been able to quickly get injunctive relief. When you consider that each monitoring account is worth north of $1,000 damages can accrue fairly quickly. The companies retain me to testify as to the value of the accounts pilfered and at risk. This lets the Judge see that the financial exposure is significant and growing fast. Some states don’t allow a temporary injunction in a situation in which the damages are purely financial, so it is important to stress the life safety issues that the perpetrator is causing.
In every case my clients have obtained the injunction within a week or so. This sends a message to the perpetrator that there are consequences for their actions and the injunction puts an end to it.   It may be hard to recover any monetary relief, but at least the injunction stops the bleeding.
   Mitch Reitman
817 698 9999 XT 101
Reitman Consulting Group
http://www.reitman.us
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Another comment

Ken,
Just responding to the fact that a former employee is able to access CS accounts.  It is extremely simple to revoke a former technician’s access to CS accounts.  There is turnover in the security industry just like there is anywhere else and you have to have a way to very quickly and easily remove access otherwise you’re not much of a security company or monitoring station.  If this company was having all staff use the same login and password for CS access or the same verbal code, that would make it a bit more complicated but if they’re doing that they need to give their head a shake.
  Regards,
Kevin Buckland
Director of Emergency Services
(705) 669-2771 or ext. 2771
www.northern911.com

Response

            Thanks for the inside tip from the central station; not sure if every central station can be as accommodating but I suppose UCC, COPS and Northern 911 are able to assist.
I'll be San Antonio speaking at the South Texas Alarm Assoc meeting. Hope to see bunch of you there; I'll be in town a few days and available if needed.

another comment

Ken
On the lighter side
Hello counselor (sir Ken) In reference to your article on May 23, 2024.  The last line piqued my interest. I did see you last month in Vegas, and didn’t realize how svelte you were.  I must have been more interested in your seminar.
Anyhow, after almost 55 years in the alarm business, (about 1970) I too, would like to lose some weight. 6ft and 215 lbs. Maybe just 20 lbs. or so.
                   I am well aware that your expertise is in alarm law and sarcasm. You certainly helped facilitate the sale my central station years ago, but thought you could help myself and some other loyal followers on this subject, since it worked for you. You are of course knowledgeable in other areas, though not an expert as noted in the above subjects, Just think Ken, if we stay healthy, hopefully we can still be around to read your blog a little longer and course continue to update our contracts. At least until we decide to give up our (hobby)
  P. S.
             I do enjoy going to lunch and dinner with my wife, kids, grandchildren, customers,
Friends, friendly competitors, and fellow volunteer Firefighters, and can't give that up.
Well, maybe one of those.
See you at ISC East
Charlie C
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Response

  Sounds like you’re just right and doing great.  Keep it up; I expect to hear from your from time to time for the next 30 years.
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Another comment

Ken,
Interesting take on this.
It would appear that this ex-employee has pushed the envelope but are we not primarily talking about employees that have left and now competing with their former employers?
My understanding that non-competition agreements with employees are no longer legal & enforceable. Is that not correct?
I get the part where he may have crossed the line by possibly changing or manipulating accounts via central station access.
But at the end of the day much of the wind has been taken out of the sails of agreements that contain non-compete clauses via the FTC.
Understand the tortious interference thing but I also don't want to give dealers out there false hope that they can go after former employees as hey use to for competing with them.
A new day has dawned & it probably requires all t to modify employee agreements if you haven't already done so based on new FTC Guidelines.
Your thoughts??
David
       PS--made my day to hear that you're making improvements on your health/weight, etc. Saw you a few years ago at ISC & was concerned for you. Proud of you for your self-improvement achievements; let this be an example to all in our industry
.
Response

            While the FTC has come out with rules banning non-competes in most situations that ruling is being challenged in court and, in my opinion, likely to be determined enforceable.  There may be state laws that prohibit or restrict non-compete agreements so that needs to be reviewed in each instance.  The Kirschenbaum Contract Employment Agreement still comes with non-compete provisions.

local competitor stealing accounts

Ken,
We have a local competitor that appears to be targeting our accounts. We think it may have started from an angry customer of ours. Since they must know they are under contract with us, isn't that illegal for them to directly target them?
One of our customers said he was just at a funeral with about 10 of our other customers there and this sales rep was directly soliciting them!
What can be done?
Name withheld
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Response
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            You can’t stifle competition, but competitors cannot use deceptive and improper means to solicit your customers.  The line between legitimate competition and tortious interference of contract is a fine line; each scenario would have to be carefully reviewed.  Unfortunately unless the attack on your accounts involves many accounts with significant RMR the chances are that it won’t be cost effective to pursue a claim against your competitor.  If you have deep pockets and don’t mind funding the lawsuit, then sure, your competitor will end up spending close to what you do; that may be little conciliation as you pay your staggering legal fees to pursue a claim you may not ultimately win.
            Direct attacks are likely lawful.  For example, your competitor can take out ads advertising that “anyone out of contract with XYZ alarm company is welcome to come to us for 50% of what you’re paying xzy alarm company”
            Or if you want to be particularly nasty,
“any alarm dealer with XYZ central station is welcome to move to our cs for xxx free years of monitoring charges”.
            What you can’t do is take out ad that falsely claims:  “XYZ alarm co is going out of business; move your account to us this month and get 6 months free alarm services”
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com