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6 Answers

No-Compete Clause as a CFI

Asked by: 6037 views , ,
Flight Instructor, General Aviation

Hi all,

 

This question might be more lawyer-oriented than I think, but I'm open for opinions on my next move as a CFI.

 

I am a low time CFI- only about 100 hours of dual given, and without needing say more, new to the industry from an employee perspective, rather than a customer perspective.

 

I got a job as a CFI nearly instantly after receiving my certificate. During the pre employment paperwork, I signed a no-compete clause that states "no trade secrets may be used in employment with a competitor within 150 NM of company X for 2 years following termination of this position."

This made me nervous in the beginning, as I was not positive if the company would be a fit for me, but being naive and new, I signed up- afterall, I couldn't have been more excited to work as a CFI after a long 7-year road to getting there.

Recently, the company has not provided aircraft worthy of flight. The aircraft have been down for maintenance for long periods of time, revoking me of my ability to make an income. (paid for flight hours) The company does not do maintenance when requested by pilots via squawks, either- including items required by 91.205. It has come to the point where I must choose to fly illegal aircraft or not make a living. 

Has anyone ever found themselves bound by a no-compete clause in the aviation industry, and to what point is it held valid. I know there are many ways to get around them.  150NM is a long way and 2 years is a long time. Flying illegal aircraft is a quick way to lose my certificates, and I refuse to let that happen. 

To make things more complicated, I was offered a job at a nearby flight school (same airport). I know that if I accept that job, I will feel more comfortable in my career, as the maintenance is much more reputable, but I risk the backlash of the no-compete clause. If that no-compete clause is held in the eyes of the law, despite my hazardous employment situation, that would mean that I would not be able to work as a CFI in my home town, and would have to essentially move across the country. 

Any advice?

Should I accept the employment at the other flight school, and run the risk?

Pay for a lawyer to back me up in this process?

Just continue to have half my flights cancelled and irritating my boss as I refuse to fly illegal aircraft?

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6 Answers



  1. Ron Klutts on May 15, 2014

    Does the non compete clause pertain to employment within the 150nm, or just the use of the trade secrets? In your third paragraph you referred only to the trade secrets.

    I’d never sign away my right to work somewhere else, but its reasonably to not take or use their lesson plans or other IP they may have. I hope its just the intellectual property you aren’t able to use and not that you now have to seek employment 151 nm away. In that case I’d get a lawyer for real legal advise.

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  2. Mark Kolber on May 15, 2014

    I think you should take the time to ask a qualified attorney who practices in your state. State law varies a lot in the employee rights arena, and particularly in the area of non competes. Some states tend to enforce them if the are “reasonable” with “reasonable” being subject to different interpretations. Other states ban them entirely for most employees.

    A good attorney in your state should be able to ask you the right questions and advise you of your rights and consequences, many times in a first consultation.

    SOGTI is not a good substitute even if one or two ultimately (and accidentally) comes up with the right answer.

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  3. Bob Watson on May 16, 2014

    I’m wondering what “trade secrets” you would risk taking with you? I mean, you’re teaching flying, which is regulated by the Federal government. I suppose there’s the business process of not doing maintenance, which is something they might want to keep quiet, but (I’m not a lawyer) I don’t think a no-compete clause can be used to prevent you from reporting illegal activities.

    From what I’ve seen, quitting and going to another company isn’t usually considered “competing” in the sense of a no-compete (unless you bring and apply some legitimate trade secret at the new job). Quitting, starting a similar business, and then attracting/inviting all the previous company’s customers might be, but even that could be expensive to prove in court.

    FWIW, you’re more at legal risk by flying in an non-airworthy airplane than [possibly] breaking a clause in the contract, which is a civil matter. Good luck at your new job!

    From what you describe, I’d quit in a heartbeat and take the other job–if only to reduce the risk to your license. If your current boss gets all bent out of shape over it, just be calm and polite and say that you appreciate the opportunity he provided, but this new outfit is a better fit for your career aspirations. If he says, “but you signed a contract…” point out (politely) that the the ongoing lack of compliance with federal regulations is making you nervous and while this job has been great, it’s not something you want to lose your ticket over (e.g. for being PIC of an aircraft that’s not airworthy). If he doesn’t get the hint that he’s one anonymous phone call away from a visit from the FSDO, too bad for him.

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  4. LTCTerry on May 16, 2014

    Not a lawyer…

    Generally the courts have held that you cannot be denied a livelihood in your chosen field. A hospital cannot stop a nurse from working at another, local hospital. The hospital can stop a nurse manager who is aware of future business plans (“trade secrets”) from working a another, local hospital.

    You’re not an executive/decision maker at your current employer. Take the new job, don’t talk trash about the previous employer, and move on.

    They’d have to divulge their trade secrets in court in order to prove you divulged them to someone else.

    Best of luck.

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  5. Tom on May 16, 2014

    I would go to the other place. I highly doubt that the school your at would really spend the money on legal fees to stop you. But more importantly it what is listed in the non compete. If it’s only trade secrets. If it is actual employment based, read my first statement.

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  6. Jim MacKay on May 21, 2014

    I think you are fairly safe to accept employment with the firm that has a solid maintenance record, and I would not worry about the non compete.
    As most have cited above, non competes can not bar you from employment in your chosen field. I’m not sure what “trade secrets” there could be in a FAA regulated flight training operation.
    I also suspect that your current employer knows that if shoddy, unsafe maintenance, was made known to the general public, or the FAA damage to their business could be substantial.
    The legal fees for the current employer could be substantial and the time it takes to file a motion and get an injunction should not be discounted. It will take a while. Also when it becomes known they are attempting to go after a CFI, it will be difficult for them to find anybody who will work for them. Remember aviation is a very small community and everybody knows everyone else.

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