Loyalty Contract???

[laurajane]

Not sure if Loyalty contract is the right discription, but here goes.

Back in the U.K a few years back now i trained as a make-up artist with a company called New Image and i had to sign a contract that said should my contract finish as a result of termination or resignation i was not permitted to use any techniques the company had taught me during my time there to work for any other company or myself for two years or legal action would be taken...i forget the details, but that was the jist of it.

I would like to know if there are any laws in the DR that would support such a contract here?

To train our staff takes ALOT of time and money, and allthough i can not stop people from moving on ideally i would like to protect the originality of my business as much as possible. I would also like to add to the contract that working for anyone else or themselves using our equipment, costumes or techniques while employed by us is also not permitted. The area we work in is a very limited, but we have been successful as we were pretty much the first in our area, I could take the risk of training people and for them to become my direct competition.

Any help would be appreciated, Thanks.

[Lambada]

I think this comes under intellectual property law in the DR: copyright, trademarks, patents that sort of stuff. Some material on Dr. Guzman's website:
Trademarks in Dominican Republic

and here
Dominican Republic, Intellectual Property, Copyright Protection Reaches New Heights In The Dominican Republic - Pellerano & Herrera - 15/10/2003, Copyright

But wait for Dr. Guzman to update you because I think some areas got changed by DR-CAFTA
Business Law in Dominican Republic

[laurajane]

I will certainly wait for Mr Guzman to advise as this is something i am not familiar with, Thank you so much to take the time in replying with such excellent information.

Your a star!

[mike l]

Lambada's advice is excellent but I will let you in on a little secret wherby no one and I repeat no one from a foriegn country will bring a cause of action law suit against you.

Venue was established in the U.K and therefore should be treated as such, if you live in the DR I'd call it a day , tuck yourself in and sleep well tonight.

International lawsuits are expensive and unless you've stolen the secret for the fountain of youth then you are good to go!

[Celt202]

Originally Posted by mike l

..no one from a foriegn country will bring a cause of action law suit against you...

She's talking about loyalty contracts for her own employees to protect the proprietary equipment, costumes and techniques of her own business.

[laurajane]

Originally Posted by Celt202

She's talking about loyalty contracts for her own employees to protect the proprietary equipment, costumes and techniques of her own business.

Yes thats right, as i said before our business is an unusual business and we have a small and limited area of work, we have been successful as we were the first ones in the area to do what we do.

Training can take months and months so our investment in our trainees and employees is huge, too much for them to become our direct competition when training is complete.

I know its a risk many employers take, but i am just trying to protect my business the best way i know how.

Another team had appeared in Punta Cana with almost the same show we have except its really very amature and the hotels we are recieving from others is that our show is 100 times better, however the majority of this team is made up of people who have been trained by us and have become our direct competition!!

I am not worried currently as their show contains many people terminated by us that were not good at their jobs and unlike us they have established and strong competition to start with, i just want to try and hinder this happening again.

[MrMike]

What the law says and whether or not such a law will ever be followed and enforced are two separate things.

You are never going to actually be able to keep your Dominican employees from going out and copy-catting you with any piece of paper. They will also go after your clients, employees, etc. as soon as they feel ready.

Make sure that you get and stay competent and competitive in every area is your only real defense.

I have had over a dozen companies founded by people I trained and employed try to compete directly with me. All of them are bankrupt now.

[laurajane]

Just a thought.....

When i signed my contract all those years ago saying was not permitted to work for another company or myself using the techniques i was taught by them, I didnt find out if that was actually legal i just abided by it.

Maybe adding something like that in our contracts would be enough even if it couldnt be backed by law. It just may be enough to make them think it. A bit naughty i know, but alls fair in love and war

I know someone in a similar business to me and he gets all his new employees to sign a contract to say they are aware that no liquidation will paid should their employment be terminated!! Now we all know that it doesnt matter what that contract says the law of the land overules it, but no one who works for him has been paid liquidation nor tried to get it as they know they signed that bit of paper. I mean we are not talking about educated knowledgable people here, i dont mean that to sound rude but they wouldnt know any better.

I mean that it totally out of order and i just couldnt live with the nerves of someone oneday catching me out, but he obviously feels he needs to do it...tut tut!

But in this case im not trying to do someone out of money owed of anything like that, just thinking and trying to preserve what we have worked so hard for.

Thanks

[MrMike]

I have heard that if any provisions of the contract are illegal, then the whole thing could be thrown out. So I wouldn't go putting stuff in there just to bluff.

I have heard that the wording of some non-compete agreements as we know them may be considered illegal under Dominican labor code if they are perceived by a judge to hinder the employees right to work.

What may serve you better (just an idea) is a clause that entitles you to a percentage of all earnings related to the field you have provided training in, and/or shares in any company that works in that field for a specified period of time. It would be a mess to collect, but it would be a better deterrent than an obviously unenforceable non-compete.

[gringosabroso]

In most American states, the general type language you refer to is known as a "covenant not to compete"; such covenants are very common in contracts between large companies & employees & / or independent contractors, who agree to work for the company.
* enforceable? Yes, in the USA, but . . .
* The terms of the covenant must be "reasonable", as later determined by a court; duration? applicable geographical area? Etc.
* Litigation is expensive! Esp. in the States! The former 'employer' is or will always be the suing party - the "plaintiff'; he, or it usually has the deeper pockets.
* In the DR? I can only speculate? Assuming that a law suit is brought & the plaintiff is wealthy, does the judge make his decision only after the envelope changes hands?
* Please forgive my cynicism! After 13 years in the DR & several exposures to the DR judicial systems, I perceive very little "justice" - as it is defined in North America, for example
* Am I in error? Thank you..