What are your thoughts?

[Advisor06]

I just started working at a P&C "independent" shop and I am really not sure what I got myself into....

There is no salary but just a $2k per month for only the first year. The commission is 50% 1st year and 40% renewals. They recently asked me to sign a non-compete agreement that is over 5 years long...I am not sure about P&C but I remember other industries being 1 or 2 years not over 5. There has been talk about a sale of the agency down the road and this makes me a little worried for the future.

Any suggestions?

 

[BADTROUT]

5 years is completely unrealistic without any ownership of the book of business or the agency. The length of time and geographic area should be no greater than is reasonably necessary to protect the agencies legitimate proprietary interests. As a general matter, courts in Pennsylvania (and most other states) favor restrictions of one to three years. Personally I would resist the 5 year handcuffs.

 

[Advisor06]

Originally I was given a contract for 5 years now it’s gone to 7! The agreement if I leave is I get 1x annual payout over 3 years...the contract reads 50% though.

5 years is completely unrealistic without any ownership of the book of business or the agency. The length of time and geographic area should be no greater than is reasonably necessary to protect the agencies legitimate proprietary interests. As a general matter, courts in Pennsylvania (and most other states) favor restrictions of one to three years. Personally I would resist the 5 year handcuffs.

 

[adjusterjack]

They recently asked me to sign a non-compete agreement

NEVER sign a non-compete. It's the kiss of death. Say no, even if it means you lose the job. I signed one once and it f----d me up but good.

Even the reasonable ones (a year or two) will make you unemployable for a year or two.

Originally I was given a contract for 5 years now it’s gone to 7! The agreement if I leave is I get 1x annual payout over 3 years...the contract reads 50% though.

Also be real careful about signing contracts without studying and understanding them. And never sign any without a copy on the table right in front of you.

Contracts are written for the benefit of the employer, not the employee.

 

[Advisor06]

I don’t think I have much of a choice. I would assume that most agencies would have some level of a non compete. The unsettling thing that I’m noticing as I ask around that is most people feel any more than 3 years is detrimental to the agent and he’s asking for 7. It’s hard to say no and just walk away when I have nothing else on the horizon. In addition it’s difficult to bring up the topic because it would insuiate that I am looking to leave down the the road and go after my book. There’s no easy way to approach this and I feel if I just sign it I will screw myself. I’m backed into a corner.


QUOTE="adjusterjack, post: 1209438, member: 83222"]
NEVER sign a non-compete. It's the kiss of death. Say no, even if it means you lose the job. I signed one once and it f----d me up but good.

Even the reasonable ones (a year or two) will make you unemployable for a year or two.



Also be real careful about signing contracts without studying and understanding them. And never sign any without a copy on the table right in front of you.

Contracts are written for the benefit of the employer, not the employee.[/QUOTE]

 

[VolAgent]

I don’t think I have much of a choice. I would assume that most agencies would have some level of a non compete. The unsettling thing that I’m noticing as I ask around that is most people feel any more than 3 years is detrimental to the agent and he’s asking for 7. It’s hard to say no and just walk away when I have nothing else on the horizon. In addition it’s difficult to bring up the topic because it would insuiate that I am looking to leave down the the road and go after my book. There’s no easy way to approach this and I feel if I just sign it I will screw myself. I’m backed into a corner.

The short answer is to find more options.

He probably realizes you are desperate and is taking advantage of it. That may be his business model and he does it to everyone willing to sign his contract.

It is almost certainly unenforceable, but merely the threat of taking you to court would probably stop you in your tracks.