I have an employee that is thinking about selling his master license to help another electrician who can't pass the test start an electrical contracting business. The employee still wants to work for me and be the license holder for another company. Is it just me or is this a conflict of interest? I have my own license since 1987 and don't need a master electrician working for me to operate. This employee is a good employee and dependable, but I'm a little concerned. Any thoughts. TX state law states he has to own at least 50% or more of the other business or be an employee of the other business.
Employee selling their master license to another contractor
- Thread starter crotonoil
- Start date
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kwired
Electron manager
- Location
- NE Nebraska
If you are not comfortable with it then it is a conflict of interest to you.
What is his involvement going to be with the other company? Just a needed license holder or actually part of their operations?
If he is just a needed license holder but has nothing to do with the operation otherwise, not only is it likely illegal (it would be here) but he is taking on liability that he knows nothing about, which is not a wise decision. If there is a catastrophe caused by work done under his license, he very likely will be held at least partially responsible when all is said and done.
petersonra
Senior Member
- Location
- Northern illinois
- Occupation
- engineer
I don't see how he can be directly involved with a competitor and it not be a conflict of interest.
kwired
Electron manager
- Location
- NE Nebraska
If they don't seek the same customer base they may not really be all that much of competitors.
- Location
- Placerville, CA, USA
- Occupation
- Retired PV System Designer
Do you see any exposure for the OP, assuming that his state does not have a snitch law?
The employee will certainly be at risk.
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The employee will certainly be at risk.
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- Location
- New Jersey
- Occupation
- Journeyman Electrician
I see it that way too. If the other guy is doing SFD's and you're doing highrise buildings it shouldn't really make much of a difference.
cadpoint
Senior Member
- Location
- Durham, NC
It should be in your State Statue's.
The Master seems inept as to the valve or the graces that he is licensed under. JMO
The Master seems inept as to the valve or the graces that he is licensed under. JMO
kwired
Electron manager
- Location
- NE Nebraska
Maybe, it has not been clarified as to just what his involvement is in either company. Apparently his licensing level is necessary with the second company but we don't know how involved in operations he is.
texie
Senior Member
- Location
- Fort Collins, Colorado
- Occupation
- Electrician, Contractor, Inspector
It would seem to me that if the current employer does not want to have one of his employees qualifying another company, that is his call.
As far as the legality of the master holder qualifying a company while he works elsewhere, that will depend on the state. For example, Florida will allow this with permission. Wyoming just sort of ignores it. North Dakota has recently banned this. In other words, it is all over the map.
That said, one would want to be very careful qualifying a company as there can be legal consequences, in some cases severe if things go bad. I have done it a few times over the years, but I'm picky about the proper legal advice, having the correct insurance in place to protect me and being very careful about who you qualify and why they need me.
The reality though is that there is usually a reason why a company needs an outsider to qualify them and that often means that they that there other red flags.
For example, to me there is a big difference in a successful company that operates successfully, with a good reputation, in a given state but just needs a qualifier in another state that they don't normally operate in VS a company that has no credentials and no track record.
As far as the legality of the master holder qualifying a company while he works elsewhere, that will depend on the state. For example, Florida will allow this with permission. Wyoming just sort of ignores it. North Dakota has recently banned this. In other words, it is all over the map.
That said, one would want to be very careful qualifying a company as there can be legal consequences, in some cases severe if things go bad. I have done it a few times over the years, but I'm picky about the proper legal advice, having the correct insurance in place to protect me and being very careful about who you qualify and why they need me.
The reality though is that there is usually a reason why a company needs an outsider to qualify them and that often means that they that there other red flags.
For example, to me there is a big difference in a successful company that operates successfully, with a good reputation, in a given state but just needs a qualifier in another state that they don't normally operate in VS a company that has no credentials and no track record.
Fulthrotl
~Autocorrect is My Worst Enema.~
- Occupation
- E
most states, it isn't that hard to get a license of your own, i'm guessing....
so, he's accepting the liability of someone who can't pass a pretty straightforward test.
if the guy goes belly up, your employee may be on the hook for whatever the guy did
to go belly up, and the chances are more likely he will do that than thrive.
seems it isn't known WHY the other guy can't pass the test.... i could probably teach
a blind dog with a note in it's mouth to pass the C-10 test... but you can't hold a C-10
if you have some legal issues like.....
868. Criteria to Aid in Determining if Crimes or Acts Are
Substantially Related to Contracting Business
For the purposes of denial, suspension, or revocation of a license
pursuant to Division 1.5 (commencing with Section 475) of the code, a
crime or act, as defined in Section 480 of the code, shall be considered
to be substantially related to the qualifications, functions, or duties of
a licensee (under Division 3, Chapter 9 of the code) if it evidences
present or potential unfitness of an applicant or licensee to perform
the functions authorized by the license in a manner consistent with
the public health, safety, and welfare. The crimes or acts shall
include, but not be limited to, the following:
(a) Any violation of the provisions of Chapter 9 of Division 3 of the
code.
(b) Failure to comply with the provisions of the California
Administrative Code, Chapter 8, Title 16.
(c) Crimes or acts involving dishonesty, fraud, deceit, or theft with the
intent to substantially benefit oneself or another or to substantially
harm another.
(d) Crimes or acts involving physical violence against persons.
(e) Crimes or acts that indicate a substantial or repeated disregard
for the health, safety, or welfare of the public.
so why is it that this guy can't get a license again?
we all know how many small contractors die a sudden death.... so your good employee
may be a bit distracted if this blows up.
on the other hand, with his license tied up with this other fellow, he's not likely to be
going into competition with you directly....
if your employee wasn't on the up and up,he'd not even be telling you about this.....
i only see a conflict if the other guy is doing your type of work.
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I don't see an issue as long as he's loyal to your business,what he does on the side should be no big deal.
however , the other guy who wants to start his business has already failed the first step of starting his business right off the bat,he Should pass the Master exam first then hang then shingle.
The employee has been in my employment for 10 years. Started as a helper, passed the journeyman's, then later the master's. He would be considered my top hand, drives company truck home, bids jobs, does service calls, collects on service calls, has keys to the shop, etc. The other person, btw, once an employee of mine for a year, just can't pass the state masters. Why I don't know, he seems to be a good electrician and I had no problems with him when he worked for me.
I agree with one poster here a person should pass the test then hang their shingle if they want to go in business .
growler
Senior Member
- Location
- Atlanta,GA
I agree that it's not that hard to pass the test for a license but I do know plenty of guys that can't pass it.
Many of the electricians that have never done anything except say wire houses ( new construction) and have done this same job for years and don't wish to change. These guys can actually wire a house faster and maybe better than I can ( if it's a simple straight forward job) and that's all they wish to do. I hate that sort of work.
It is common enough for someone to be the license holder for a residential crew in this state and never really get involved with the business.
I don't like it but they don't seem to have any problems doing it this way. If the guy can't pass the test you wouldn't want him doing anything very complicated but if it's in an area where he is very familiar it may work out.
I don't like the idea of letting others use a license but I didn't write the law and there are many people that take advantage of these loopholes. Giving the guy a salary as an employee would probably satisfy the state unless they require direct supervision of the jobs.
- Location
- New Jersey
- Occupation
- Journeyman Electrician
Why wouldn't you want this guy as an employee?
ramsy
Roger Ruhle dba NoFixNoPay
- Location
- LA basin, CA
- Occupation
- Service Electrician 2020 NEC
It appears the longest turnover at this shop is T-10 years before launch; a remarkable achievement given the temptation of sidework.
Encourage him. If top hand's investment scheme backfires his retirement may be delayed, perhaps ensuring indenture to the shop a bit longer.
- Location
- Lockport, IL
- Occupation
- Retired Electrical Engineer
I recommend that you discourage this notion. Keep in mind that you live in a country in which anyone can sue anyone else at any time for any reason. And even if you win the lawsuit, there will be much that you will have lost during the process. Suppose, and let the heavens forbid this, but just suppose this other person makes a mistake that causes an injury. What makes you think that you, and your company, will not be brought into the lawsuit? After all, it was YOUR employee whose license was on the line for this work!
stevenje
Senior Member
- Location
- Yachats Oregon
I would be concerned on why the the other electrician can't pass the test. :?
In NC no work can take place on the qualifiers license during any hours he/she is on the clock of another employer or another company he/she is qualifying. This would mean the other company would probably have to work at night and the qualifier would have to be available to supervise any work if needed or requested by an inspector.
Roger
Roger
kwired
Electron manager
- Location
- NE Nebraska
OP could be dragged into a lawsuit, but they still have to prove him of any wrongdoing. That employee's license belongs to that employee not the OP, just like his drivers license. What if you have a vehicle that needs a special operators license (CDL)? Does that make it illegal or hold you responsible should any employees of yours that are qualified to drive that vehicle should happen to drive some other vehicle that requires the same operators license? Kind of the same thing here.
If he wants to do work on his own time that license allows him to do so. Now if the OP doesn't want to deal with someone working both sides of the fence he certainly doesn't need to, but if there is something illegal here it is not working the other side of the fence itself, as his license does allow him to do other work without his employer's supervision, and if he doesn't follow any rules associated with that privilege then he is taking that risk on his own. Hopefully he is not using any of the OP's resources to assist him or else the OP will have a greater chance of being dragged into a lawsuit and considered to be a participant in the actions.
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