An RSC member who wishes to remain anonymous would like to know what you think of this scenario:
The station for which the member works recently changed hands. When the sales manager - who had been with the station for a long time - took over, certain things were changed, one of which was that commissions made by the sales reps were docked to 15%, down from 20%.
Keep in mind that two reps had been there for years, one of them for nearly ten years. And one of the sales reps had had a record year the year before.
The RSC member would like to know if this is any sort of "normal" practice, to risk losing salespeople over, and added that the sales reps were told they had to sign a non-compete clause when the station changed hands.
What do you think? Please share your feedback!
at April 20, 2018 12:04 AM PDT
This is a fairly typical scenario when new owners come in. Cut overhead by reducing expenses. I'm sure the sales manager did not want to do it but had no choice. And it's obvious that the new owners are not worried about finding someone else to do the job for less. As to non-competes, check your state employment laws. If you did not have one in place prior to new ownership, in most states, they cannot force you to sign a non-compete agreement as a condition on continued employment.
Like Bob said - check your state laws before signing ANYTHING.
Here's an unanswered question - does 'anonymous' already have a signed contract with the outgoing ownership? Generally speaking, new owners have to honour the contracts they inherit when they take over. Otherwise, by that same measure, any long-term contract clients can sever their agreements without repercussion. Or are the new owners going to go to all of the station's existing clients and tell them they've nullified (aka breached) their existing contracts with the station and will be changing the terms to, say, hike their rates by 15% and include a clause that they can't advertise with any competing station in the market? (Yes, we've seen competitors offer 'exclusive' rates on the condition they don't advertise with us during the contract period, it's sleazy, but it's out there. And yes, every one of them has come back to us after it was up!)
They may not have any legal grounds to cut the commission you are receiving, let alone force a non-compete in a job you already have. I think the only ground they would have is if they terminated everyone this would affect, pay the severance, and offer to re-hire at the reduced pay/additional restrictions. This is from a Canadian law firm, may be different in the US - "Non-comps signed after employment has already started are seldom enforceable without additional consideration. Any employment contract that contains a non-competition clause should be reviewed by a qualified legal professional before signing." (emphasis mine) That last line is ALWAYS good advice, because laws vary country-to-country, state-to-state.
Are they giving all of the on-air staff a 5% pay cut and non-comps too, or just sales? What are the time/geographic restrictions? 1 month in your city ... a court might uphold. 5 years, nationwide, they'd likely toss as 'unreasonable.'
But let's be real. Knowing what you're about to be facing, haven't you already started your new job search? Sounds like these owners would be a REAL TREAT to work for. Maybe they're doing their current employees a favor by forcing them out?
New Owners can do whatever they want if they change the companies legal entity. You are know working for a different company and have to play by the new company rules,etc.
Non-compete agreements have to be able to stand up in court and what's enforceable varies from state to state. Usually they are used more as an intimidation to prevent good people from leaving. I once had a G.M. who had everyone sign a 90 day one-way non-compete. If you left, you were prohibited from working for a competitor for 90 days. However, if you were fired, you were welcome to work across the street right away.
Companies can change compensation anytime they want, depending on what they have in writing in your personal employment agreement.
All that being said....
The new owners need to make money and sometimes they make demoralizing decisions. That happens without ownership changes too. Years ago, I had my most successful year ever (at the time) so the next year, they altered the bonus structure for everyone so I would earn less. I decided to leave them after 8 years after that.
From kimmy henglefelt: I wonder why would they risk their sales team when they are doing their job! Is it greed? Unappreciated? Taken for granted?
