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Old 07-26-2010, 01:16 PM   #11
Jorge Vega
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Re: Employee Terms of Agreement?

Thank you Brian. Very helpful.
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Old 07-27-2010, 10:23 AM   #12
Eric Black
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Re: Employee Terms of Agreement?

Folks, be aware that HQ frowns on noncompetition agreements between an affiliate and its coaches. These will be expressly prohibited in the affiliate license agreement going forward, the idea being that a good affiliate owner should be able to retain and keep good trainers from leaving to work for another affiliate owner, and if your trainers want to go and start their own affiliate that is good for the entire community.
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Old 07-27-2010, 10:34 AM   #13
Brian Strump
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Re: Employee Terms of Agreement?

I frown on them too, but it's a necessary evil. Of course HQ will frown on them, they lose out on $2k/year. HQ does not have anything in regards to trainers terms within an affiliate, so how they can police that will be virtually impossible. With each affiliate being owned separately, and each trainer an employee of the affiliate owner, not HQ that idea seems unlikely. That is a big difference between an affiliate vs. franchise.
It's to protect your business, and investment. As an affiliate where I am the owner, but do not do the majority of the coaching it is needed. Our affiliate manager and head trainer understand this, and have options to buy into our business at given times in order to make this more profitable for them as well.




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Originally Posted by Eric Black View Post
Folks, be aware that HQ frowns on noncompetition agreements between an affiliate and its coaches. These will be expressly prohibited in the affiliate license agreement going forward, the idea being that a good affiliate owner should be able to retain and keep good trainers from leaving to work for another affiliate owner, and if your trainers want to go and start their own affiliate that is good for the entire community.
Best,
Eric
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Old 07-29-2010, 09:19 AM   #14
Justin McCallon
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Re: Employee Terms of Agreement?

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Hi - I have brought my trainers on as employees rather than independent contractors and have been told that I should have them sign an employee agreement. Is anyone else doing this? The agreements I have seen are those that have created by lawyers and are super intimidating. What happened to the family concept?!
I'll just point out that a good attorney would work with your business to determine the correct terms that you want to agree on, but would prepare the contract in an easy-to-read, intuitive manner so that your employees would understand what they're signing. Good contracts aren't filled with legalese; they are straight-forward.

I've seen some employee contracts from CrossFits in the Atlanta area and they are over-the-top unconscionable in favor of the gym/owner, and full of legalese. In a lot of cases, they would be entirely unenforceable.

p.s. I like HQ's stance on encouraging not having non-competition agreements (in instances where you hire a $10/h trainer, it's a bit harsh to not allow them to compete), but if they start mandating that affiliates not have non-competition agreements, then they are walking a fine line. Courts could deem the affiliates to be franchises, and HQ could incur a lot of liability. Just that one stipulation by itself isn't enough, but a few other requirements would be. There was a case like this involving Burger King.
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Old 07-29-2010, 10:10 AM   #15
Brian Strump
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Re: Employee Terms of Agreement?

The agreement that we use is only for the manager of the affiliate, he's paid $25/class hr, and $12.50/hr when doing non class time work.
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Old 07-29-2010, 10:16 AM   #16
Justin McCallon
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Re: Employee Terms of Agreement?

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The agreement that we use is only for the manager of the affiliate, he's paid $25/class hr, and $12.50/hr when doing non class time work.
Yeah, sorry, I didn't mean that to be directed toward you. I would have a non-compete for this guy as well.

One of the Atlanta CF gyms (one that I don't like at all) required 100% of its trainers, many of whom work only 2 or 3 classes a week and make $10/h, to sign a non-compete. The non-compete was, according to the contract, enforceable even if the employee was fired for no reason. It also said that trainers could not discuss "trade secrets," which included typical crossfit programming and how to do exercises like kettlebell swings. I'm assuming that if they have ridiculous terms like this in there, other affiliates do as well. It's a good way to get your entire contract voided in a lot of states (some states will just rewrite certain parts -- "blue pencil" states -- and others, "red pen" states will void the whole thing).
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Old 07-29-2010, 03:07 PM   #17
Brian Strump
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Re: Employee Terms of Agreement?

Really my goal is to make his life too good to leave and start on his own. If anything, we open a second location, where he's the "affiliate" owner, and we share 50/50.
The contract is just a sheet of paper. The odds of most affiliates even taking a trainer to court over the non-compete or any other stuff in a contract is almost nil anyways.
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Old 07-29-2010, 09:16 PM   #18
Dale F. Saran
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Re: Employee Terms of Agreement?

Let me just chime in to add that we try to be as hands off as possible and let Affiliate owners run their affiliates as they see fit, so long as it doesn't hurt the overall CF name (in a very broad sense, without getting down in the weeds). Non-compete clauses can be a reasonable option if done in an even-handed, reasonable manner. It's the whacky ones (of course) that make HQ (generally) leery of them.

You guys seem to understand this. There may be times and circumstances where a non-compete within a small radius (as you've described Brian) is a good idea for both the trainer and the affiliate owner for a lot of reasons if there's a less than amicable separation. We've seen it happen and the bad will can linger. And that's not good for the whole community.

Brian - I mean this in a nice way, but it has absolutely zero to do with an extra $2K licensing fee and that's a bit insulting. Ask anyone in this community and I guarantee you you'll find way more than $2K worth of generosity from HQ to the affiliates on an annual basis - heck, I'll bet I've done over $25K annually in legal work - for free - to various affilates/owners who've called me for personal favors, legal questions, etc., and I know the rest of the staff does that kind of stuff with their own time, as well.

So, no, it's not about HQ wanting to split off trainers in order to get an extra $2K here and there. Our disagreement with non-competes is just that generally they're (a) not well-drafted and particularly one-sided, (b) they're anti-competitive by their nature (and we're philosophically opposed to that), (c) they're generally not enforceable because you can't prevent someone from making a living, particularly in this industry, and (d) we'd rather see folks just talk to each other and work things out peaceably. Failing that, we'd rather not have Affils using psychological tools to control their trainers.

Having said all of that, they can be useful when reasonable. I'll leave it at that. Best of luck to all of you. Call me if you have questions and I'm happy to chat. My number's easy enough to find using google or pm me.

Dale
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Old 07-30-2010, 06:31 AM   #19
Brian Strump
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Re: Employee Terms of Agreement?

Dale,
I commented on the money, kinda tongue in cheek. CF HQ and the community at large is amazingly gracious with the knowledge and information they share.
Thanks for all the work you guys do.
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Old 07-31-2010, 05:34 AM   #20
Chris Hill
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Re: Employee Terms of Agreement?

surely HQ can disapprove all they like but as soon as they dictate your business practises your affliate starts to look much more like a franchise.
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