what’s happening Andy here I am joined

today by my good friend Bob Goldberg how

are you today Bob hi Andy what’s

happening everything’s great I’m having

a wonderful day it’s 76 degrees here in

Chicago and the sun is shining and just

as shiny on our industry glad to see you

great to see you I I haven’t seen you in

a little bit and for the probably a

couple people who might watch this video

who don’t know who who you are could you

just give us a quick uh give us the

pictures who’s Bob Goldberg and what do

you do for for our industry and for BTA

and the other areas that you work in

thanks Andy I am so privileged to be

general counsel for the business

technology Association previously namda

it’s been over 40 some years I have the

greatest job in the world because any

issue that arises in the industry

someone will call me and say Bob what do

you think what do we do how do we

address it so I sit just in a beautiful

position to have a good feeling for the

industry and I’m very pleased now to see

how it’s growing and recovering from

covid and strengthening and dealers are

improving their bottom lines and taking

on new products and opportunities

so I didn’t know any of that I really

know you more for your Patriot pack uh

Biker Bob uh the judge as you’re known

in closer circles that I that I run in I

roll in and uh Bob you’ve joined us and

and we’ve gone across the country

several times now and and uh raised a

lot of money for the Julian fund and for

some other other Charities we’re going

to be doing that again this year

um you are the industry Guru and it

comes to issues especially like the one

I want to talk to you talk with you

about today so let’s just Dive Right In

uh non-competes that’s a it’s been a

huge issue for our industry it was uh I

had one when I when I worked at uh at uh

icon way back when it’s it’s nothing new

but it’s um there’s a there’s there’s a

lot to be said on both sides so let’s

start uh what do you think about

non-competes how do they apply to our

industry and where do you stand

well we got thrown a huge curveball this

year

um the Biden Administration wants to

eliminate non-competes they think it

curtails an employee’s ability to move

among of jobs and positions and

non-competes have been used in several

instances where perhaps they are

overreaching if you work for a fast food

Enterprise and you want to go across the

street from one from McDonald’s to

Burger King or somewhere like that there

are people that have non-competes that

are making minimum wage and they’re

being foreclosed from improving their

position improving their their

compensation so the the Biden

administrations you know put out a

directive that they want to see

non-competes eliminated so our friends

at the Federal Trade Commission in

Washington

proposed a trade regulation rule that

will eliminate non-competes now the one

exception is and we’ll we’ll talk about

this the non-competes in conjunction

with the sale of the business because

those will be enforced because they need

to protect the Goodwill and the people

what the assets they’re buying from a

business but the FTC rule does two

things it will eliminate non-competes or

employees and number two it will avoid

all existing non-competes so that is

really problematic for our industry our

industry is different our industry the

acquisition costs for a customer is is

substantial there’s a lot of work that

goes in to develop the customer to

determine their needs to meet their

needs to fill their needs and and make

the relationship successful if one of

those sales people or one of those sales

managers or a technician decides to go

and start their own business in

competition that could be problematic

and they could take a lot of the assets

and the secrets of their previous

employer so we at the business

technology Association are making our

position known that that installed base

that myths them in the field that we

have is a valuable asset and must be

protected and we protect that through

non-competes now if they eliminate

non-competes there are other things we

can do and first of all in terms of the

FTC rule it’s still in the in the

discussion stage comments are being

filed and they’re being filed by a lot

of different uh segments and channels

that are saying that we should be

different this should be different we go

all the way from doctors to office

equipment you know that say that

non-competes are important things so

there’ll be hearings on the non-compete

trade regulation Rule and those hearings

will give additional information and

then they’ll be revisions to the FTC

rule and finally they’ll be challenges

to the FTC rule have they basically gone

too far under their mandate to prohibit

unfair methods of competition by

proposing this trade regulation rule so

right now we’re under a current

circumstances where non-competes are

being enforced there are certain States

like California that do not allow them

um there’s States like Illinois and

Massachusetts where they let me tell you

Colorado if you don’t make more than a

hundred and one thousand dollars you

can’t be subject to a non-compete in the

District of Columbia it’s a hundred and

fifty thousand dollars you can’t be

subject to a non-compete and here in

Illinois where I am it’s 75

000 and you must have been employed for

two years so you know the states are

doing restrictions as well

and in some respects with States having

various restrictions you’re better off

having a federal law which makes it

uniform throughout the country it’s just

that we feel the FTC rule goes too far

so when we look at I know you want to

ask a question yeah there’s a ton in

there there’s a ton in there you know

I’m on a roll but yeah you know in terms

of what the dealers can do the first

step a dealer should take is in their

employee manual have a confidentiality

provision that says that they will be

exposed to certain confidential and

proprietary information in the course of

their work and that should remain

confidential and cannot be disclosed so

so that’s just a basic uh measure that

you can put into your employee manual

that will have an effect to preserve

confidentiality

now we we have non-competes and now when

I started in the industry non-competes

looked like this you can’t work for two

years in 50 100 mile radius of the

business now a non-compete says that you

can’t do basically anything for a

competitor you can’t use any information

you can’t do anything to compete with

the business

now some courts have looked at those and

said time out what if you want to Andy

wants to you know remain go from icon to

uh Canon and he wants to be a janitor

this says he can’t be a janitor so

there’s now the janitor rule that it has

to basically courts have said have a

bearing on what the position was

previously and be a threat so you have

these personal non-competes

um which used to be Geographic in time

um now they’ve been limited

um mostly I I put it in the area that

the dealership works and I always say

one year you know we’ll we’ll be upheld

two years sometimes is pressing it

so there are also non-competes with the

sale of a business and we talked about

that earlier sale the business those

non-competes will be enforced because if

you get paid 15 million dollars for your

business and the next day you go out and

start it again uh you know that’s not

fair and that that’s recognized there

also are non-solicitation agreements and

this is where I think we should be

looking at more carefully in terms of

the business technology industry

non-solicitation says you can go work

for a competitor but you can’t solicit

any of the customers that you were

responsible for or had knowledge of

while you were employed by us

and that that’s a more reasonable

approach it doesn’t say you can’t

compete can’t take the job just you

can’t take our customers now in those

situations we put language in that says

you can’t do it directly or indirectly

so you and I are friends so I will

worked at that at ABC company I say Andy

I got this uh police termination list

that I stole from my last cause last

employer ABC is going to expire in three

months get get in there and see what you

can do this is what they’re paying

that’s illegal that’s improper and

that’s inappropriate as well

but also non-disclosure rules so the

non-disclosure goes a step further than

the confidentiality in the employee

manual and says that you can’t disclose

any information you obtained while you

were employed

um to a third party that’s competitive

or in detriment to your previous

employer so you have that non-disclosure

provision that you can put in as well

um I often suggest you have a

non-solicitation non-disclosure merged

together if you’re a BTA member you can

go to the bta.org website and there you

can find templates that have these

things and you can you can craft it and

and put it in place now let’s say you

have absolutely nothing in place then

there are trade secret laws that exist

in the in every state in the United

States and that says there are certain

things that our trade secrets that are

maintained is confidential and you can’t

take those and you use them against the

the

um your employer their Trade Secrets and

they belong to the employer and the

employer only there are standards you

have to show that it is in effect a

trade Seeker who has kept confidential

it wasn’t disclosed and I always say you

know your CRM system whatever else

you’re using you must make sure that

it’s not open access to everyone I know

in our Law Firm we used to have Near The

copier so we could you know put in the

codes a list of all the clients well

that was inappropriate because anyone

can walk in look at that list and it

wasn’t maintained it’s confidential so

you know you have to have take certain

steps right now I suggest to dealers

don’t do anything drastic to change what

you’re currently doing when the FTC rule

comes out at that point we can visit

again and say Here’s the best solution

but dealers need to look at non-competes

need to protect their employee employees

from leaving and taking confidential

information you know you can put it on a

thumb drive you put it on a phone you

can do whatever you want and it’s

important because that’s the asset when

we sell a business that’s what we’re

selling and that’s what you need to

protect

so much in that

um you know back to the beginning one of

the first things that you said the

Burger King to McDonald’s you know our

industry is not like Burger King at

McDonald’s we’re dealing with you know a

salesperson who let’s face it when when

a customer buys they they don’t buy from

the company they buy from that rep and

You’re vulnerable when that rep jumped

ship and moves somewhere else right and

and so you know I understand that the

non-solicitation although

you know the first thing I could think

of was exactly where you went which was

you know hey go call on this account you

know cut me in if you get it right I

expect a little finders fee and I don’t

know how you document that because the

Reps in theory are supposed to be out

there every day banging on doors right

making their calls and in theory there’s

no reason to say that they couldn’t have

you know backed into that you had a good

rep who’s in this territory and lo and

behold they keep showing up in your

account

how can you prove that

well if that question comes up often I I

had one of those recently where we lost

one of our I.T people

and lo and behold three weeks later the

biggest account is asking us questions

and and we think we’re going to lose

them and he’s in there okay now we can

keep him out of there and we wrote a

letter of cease and desist to the new

dealership saying you cannot you know

he’s subject to this cannot do this

cannot do that Etc they came back with

their CRM system and said look it we’ve

been in that account for 18 months

trying to win them over

and it was well documented there were

phone calls there were visits there was

a lunch there was a golf

um round you know things they had done

to court this this um customer so yes

you’re right directly or indirectly can

work

um uh it can be violated but you know if

they go in with this the person that

just left that’s going to be a problem

right if you show a clear record of

communication and attempts to secure the

customer by another rep that that can

can get you out of any difficulty in

terms of the situation

he’ll flip it right I you know my my

background was was sales I have friends

actually I started this career and

they’re still in sales and every now and

then you know they get a little

frustrated and they start looking around

and they can’t go anywhere they’re

locked in

um you know they’re at the point where

they’re in their 50s they’ve been doing

this their whole career and you know

they’re working with one company they’ve

got a pretty good it’s not even that

it’s a good non-compete no one knows if

it’s a good non-compete until it goes to

court right

um the problem is it scares off any

potential uh company that might hire him

that’s within our industry and at this

point that that guy knows toner that’s

all he knows is print print and where

where is he going so if he was unhappy

you know the fact that he’s got that

non-compete means that nobody’s going to

talk to him so he’s kind of he’s kind of

locked in he really can’t go anywhere if

he wanted to he’s happy at the moment

but you know down the road and in

previous uh instances he wasn’t happy

and uh he gets right to the end gets to

these interviews and that other company

he says I don’t wanna you know I don’t

want to go to bed I don’t want to fight

your legal fees and let’s face it you

know some of these companies have much

deeper Pockets than that typical rep

um what do you say to that rep you know

what what do you say to this person this

man this woman this um salesperson that

you know I I’ve been selling for 20

years I don’t know anything else but

selling copiers and manage print

um you know this company isn’t who hired

me they’ve changed they’ve been sold

perhaps like you mentioned uh you know

the Management’s left that that that’s

taking care of me all these years I

don’t like it here anymore

a new sales manager I don’t see any of

these reasons right now what now what am

I supposed to do I I have to sit for two

years

well I’m going to look at the

restriction and see what it says whether

or not it’s reasonable or unreasonable

whether or not it’s enforceable enforced

unenforceable and you’re right the cost

of for an employee to defend that suit

is overwhelming

um these suits run fifty a hundred

thousand dollars and the employees

certainly can’t do that my advice to the

individual would be

pick up your family move to Florida

um you know go to the sunshine go to

Arizona go to wherever you want to go

but go outside that territory you know

how to sell you you know how to sell x i

z manufacturer find a dealer who who

represents that line go into that area

and start building your book

very good advice Sage advice

um we’re heading towards the end but

before we get there I do want to spend a

little bit more time talking about this

um you know potential ruling which if I

understood you correctly overnight all

of these non-competes could just be gone

right invalidated they all go away

instantly so every one of you dealers

watching this who’s protected right now

who’s you know

safe right now

um what happens when if and when if that

happens what’s our landscape where where

does our industry I mean is it just the

wild west people are going to be all

over going wherever or

hope hopefully not hopefully dealers

have confidentiality Provisions in place

um they have it in their handbook they

have it in an agreement

um non-solicitation is still up in the

air it’s mentioned once in the rule but

we will see where that develops and how

it comes out

um there are ways to protect it and we

will make sure the dealers have the

information to protect that valuable

customer information I also suggest to

dealers and I know it’s an

administrative nightmare but in terms of

cell phones make them company cell

phones because you and I know that every

technician every salesperson has told

that customer listen you have a problem

here’s myself call me and I’ll get it

taken care of immediately so you want to

control that phone number and you want

to control their computer or tablet

whatever else they have at its company

property so when they leave you get the

cell phone back and the number you get

the computer or the iPad back and all

the information on it take steps to

protect yourself

um if it becomes the Wild Wild West the

rich will get richer because I’ll have

the wherewithal to hire people away for

a few extra dollars

um you know especially with technicians

would you rather take someone right out

of a trade school and train them and

spend two three years to get them up to

speed or hire someone that’s already

been to the manufacturer’s training and

done it for a few years you certainly

would be willing to pay a four five ten

thousand dollars more to get that

trained person over so we got to take

steps and we got to protect it and make

sure that we see the value in our

business and that it doesn’t get go out

the door with an employee

this has been awesome Bob I really

appreciate you taking the time to to go

over this I think that

things you you just reviewed or

invaluable to to the people in this

industry as are most of the things that

you tend to do for for these guys

um you’re not all just golf thank

goodness

your day job is actually

um pretty amazing the the stuff that you

get into on a on a daily weekly basis so

upcoming shows any anything coming up

that you’re going to be speaking at any

BTA shows you’re going to be attending

where’s where’s Bob going to be in the

next couple months

I’m going to be speaking at uh VTA in

Denver

um and there I’m taking my wonderful

position and the name of the topic is I

Heard it Through the Grapevine and we’re

going to be sitting there and talking

about things that are happening

currently sharing them with dealers and

make sure other dealers don’t experience

the same challenges so I’m looking

forward to that Denver meeting

um it’s in June and uh then uh the

national meeting for btas in Boston at

the end of August this year there’ll be

another great meeting we we’ve listened

to the dealers we have panels we’re

looking at new opportunities the dealers

can get into a lot of people are jumping

into uh telephones

um and telephone services Boya and you

know that that’s a real interest I’m

right now reviewing an electric uh

charging contract for for a dealer um

this is a rather substantial dealer

um I guess acdi Josh and Mark Hart went

out and talked to him and I’ve got a

14-page agreement I’m working on today

and I’ll finish today looking at

electric charging there are tremendous

opportunities there under recent tax

legislation that basically pay you to

put these in because the administration

in this instance wants I don’t know how

many hundreds of thousands of charging

stations all over the country so we can

get off fossil fuels so you asked me a

simple question I’ll be in Denver I’ll

be in Boston but I get excited because

there’s so many opportunities come

listen to them share with us and Andy

thanks for what’s happening you are

what’s happening in the industry thank

you great seeing you Bob we will talk

soon and thanks so much for being on the

show take care thanks you too thanks