Would You Agree to This Contract's Terms?

Large regional service broker's non-compete clause called into question
by Ron Hall/Editor-in-Chief
1/1/2014

A contract is an agreement between two or more parties. It is enforceable by law and in almost all cases is written. A contract can be relatively simple or it can be detailed. Regardless, all parties to a contract must carefully review and accept all of its provisions before signing it.

It recently came to the attention of Turf magazine that the language in contracts that one large landscape service broker, Brickman Facility Services (BFS), has been using with subcontractors appears to go beyond what most subs would consider fair. A clause in the contract seems to deny subs the opportunity to compete for property maintenance work beyond the scope of the specific services covered by the contracts. Specifically, it denies subs the right to solicit or even "call on" anybody that within the prior 24 months has been a customer of BFS or its affiliates.

As the "affiliates" of BFS provide a range of property maintenance services, subs signing the contracts may find themselves shut out from competing for work not specifically covered in the contracts. Generally these contracts are for snow and ice management for national retailers with stores in multiple markets. These retailers find it advantegous to deal with a single broker rather than trying to arrange services and to administer contracts with many different contractors in many different locations. Generally the arrangement works well for all parties - the retailers, the service brokers and the subs.

But, in this particular case, that doesn't appear to be the case.

A copy of the "Service Partner Subcontract Agreement" in question contains the following language under its "Covenant Not to Compete" section:

"Subcontractor shall not, directly or indirectly (whether as an owner, partner, shareholder, agent, employee, independent conractor, consulant or otherwise) during the Restricted Period (defined below), divert, solicit, call on or attempt to entice away from BFS or do business with any person or entity that is at such time or was with the prior 24 months a customer of BFS or its affiliates. The 'Restricted Period' means the time period beginning on the date of this Subcontract and ending on the second anniversary of the last day on which the Subcontractor performs services hereunder. Subcontractor acknowledges that the restrictions imposed on it by this paragraph are fair and reasonable in light of BFS's operations and are reasonably required for BFS's protection."

The take home message for subs is clear: Read all contracts very carefully before signing.

If the conditions outlined in a contract seem too broad or you perceive that they put you at a competitive disadvantage for work beyond the scope of the contract, cross out the offending language. Do not hesitate to negotiate terms that you feel are fair to both parties. Once you sign the contract you are obligated to fulfill its conditions. That is, unless you want to get into a potentially expensive legal squabble.