Contracts Viewed as an Essential Tool for Protecting
Kitchen and bath retail professionals should familiarize themselves
fully with the wide variety of contracts and requirements that
exist in order to protect their business from legal exposure on
According to speakers at the recent Spring 2004 meeting of the
Bath & Kitchen Buying Group (BKBG), there are several key
contracts and legal issues that design firm owners should
understand and adhere to. Among them are non-compete agreements,
anti-harassment policies and probationary agreements.
Non-compete agreements can be
useful in protecting a design firm from the possibility of a key
employee leaving the company and taking valuable customers and
business secrets with them to join a competitor.
Among the advice offered by BKBG on the subject of non-compete
agreements is the following:
- Non-compete clauses need to include both a reasonable distance
and length of time after termination of current employment. These
distance and time parameters vary from state to state; because of
this, all policies should be developed under the auspices of legal
- The employee needs to understand that any special training paid
for by the employer will be reimbursed to the employer should the
employee desire to leave employment within a designated time frame
set by the employer.
- Confidential company information, trade secrets, correspondence
and/or any company records may not be shared with a future employer
for a designated period of time set forth by the current
- The employee should agree not to solicit business or customers
of the current employer for a period of time set by the current
- An agreement of acceptance of the non-compete policy should
require a dated signature by the employee.
sexual and other forms of harassment are necessary for every
business, and should be reviewed by legal professionals prior to
being implemented and/or enforced. Among the tips offered by BKBG
members are the following:
- Employers should state that the responsibility rests with
employees as well as with management to report any infractions.
Steps for reporting an incident must be specific. An explanation of
how to make out the report, and to whom the report should be
directed, must be included.
- Disciplinary measures for the accused must be addressed and
included in the policy.
- Statements about what constitutes harassment must be within the
guidelines of federal, state and local laws.
- Incident reports must be filled out, dated, and signed by the
person initiating the report. Reports such as these can be
invaluable should an incident turn into a legal matter.
Probationary Probationary agreements spell out the conditions
under which new employees are brought into a firm, and what they
can expect in terms of solidifying their employment. According to
BKBG members, the following are worthy of note:
- An employee contract, which should be dated at the time of
hire, should include the salary to be paid to the employee, and
should stipulate that the employee will be subject to a performance
review after 90 days. Some businesses review after 90 days, and
then again after six months and after one year.
- New subcontractors should be required to sign a contract
regarding the standards of their workmanship, their responsibility
to the project, and their policies regarding harassment.
- Criminal background checks should be conducted to protect all
- Employees should be made to understand how their careers could
progress within a design firm. For example, employees who want to
become senior designers can be hired at first on a contract basis
possibly for as short a sting as 30 days as a “Showroom
Levels of advancement then might include: “Staff Designer,” for
an employee who works under the direction of the owner; “Hired
Consultant,” at which point the employee can be given more freedom
to create on their own, and “Senior Designer.”