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Subcontractor now contacting customers directly / Register today for diligence webinar
September 6, 2022
Subcontractor now contacting customers directly
          I have parted ways with a subcontractor I used for many years.  That subcontractor is now soliciting and servicing a number of my customers, and to make matters worse has successfully solicited and now employs one of my technicians.  What can I do? 
          I know you will ask, so I’ll let you know in advance that I have written contracts with the subcontractor or the former employee.  I am concerned that they have not finished their solicitations and worry about the damage they have and will cause.
          You should have had a Subcontract Agreement with the subcontractor and an Employment Agreement with the ex-employee.  You should also have up to date Standard Form Agreements with your customers so that you can enforce those relationships which you now so desperately seek to salvage.  
          Without a contract, protecting your contractual rights is much more difficult than it could otherwise be.  On the one hand, there are certainly limits on the extent that anti-competition provisions will be enforced because restraint of trade is not favored, but on the other hand, we still enforce contracts in this country when the provisions don’t offend public policy or are outright prohibited by law. 
          A subcontractor engaged by you, introduced by you to your customers, can be and should be restrained from soliciting or servicing those customers.  Same goes for your employees, especially those introduced to the customers by you.  Similarly, your subcontractor should be restrained from soliciting and employing your employees who were introduced by you, at least within certain parameters.  But you need to do this with a contract. 
          Whether your customers can be considered “yours” is another issue.  A customer without a contract or a contract cancelable at will is not really a relationship you can reasonably claim to have expectation of longevity.  Sure, we take the position that an alarm customer remains loyal forever, but it’s a tough sale when making that argument to a judge.  The position is not impossible, just much more difficult to win.  Better to have a written contract with a term so that “inducing breach of contract” has meaning. 
          Same goes for your employee and the subcontractor.  With no agreement we have something called free enterprise and competition in this country; restricting either is not looked upon favorably and will be permitted only to protect your rights – provided you have any rights.  The written contract gives you rights. 
          Operating without contracts is just poor business; period.  Operating with poorly drafted or outdated contracts is almost as bad and maybe even more problematic because you may be deceiving yourself that you have some contractual rights when in fact you don’t.  Get and use the Standard Form Agreements.  They are tried and tested and recognized throughout the industry you happen to be in.

Registration for Sept 13, 2022 webinar on performing due diligence
          We’ve all heard the terminology, due diligence, in connection with a transaction to buy alarm accounts, but what due diligence actually consists of and how you get it done is not as familiar to everyone. In fact, due diligence can run the gamut from a cursory review of records to a comprehensive analysis that comes close to [and sometimes exceeds] a forensic financial audit.  Who you can and should engage for due diligence can also be an elusive choice. 
          Jim Wooster, Jr., of AFS [Alarm Financial Services], a lender to the alarm industry collateralized by alarm accounts, is opening a new service to perform Due Diligence.  I asked Jim to do a webinar to introduce his new Due Diligence service and it will be presented on September 13, 2022 at noon ET.  See you then.
Webinar:  Due Diligence in alarm industry on buy-sell or loan transaction
When:  September 13, 2022  12PM  ET
Topic:  Due diligence; what it means, what it involves, how it's performed and who  you can get to do it
Presented by:  Jim Wooster, Jr., President of Alarm Financial Services, Inc 
Hosted by:  Ken Kirschenbaum,Esq
Who should attend:  Alarm company owners, CFO, buyers and sellers

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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