Spa Wars

A chic Uptown salon plays hardball with its ex-employees

Other former employees who have run afoul of Urban Retreat have had less luck in the courts. Last month, for instance, the company received a restraining order barring a nail technician named Lisa Cannon from working at a rival business. According to an affidavit filed by Jeff Lillemoe, Urban Retreat's director of operations, Cannon was fired "after she refused to return to work following a European vacation." Cannon tells a different story. In her version, she ran into a travel snag and had called a fellow employee to inform a manager she would be a day late. Following her dismissal--and, she claims, considerable wrangling over a final paycheck--Cannon accepted a nail-tech job at Litespa in downtown Minneapolis. Urban Retreat responded by suing both Cannon and Litespa. As it happens, Cannon had already left Litespa. But she is still angry over her former employers' legal tactics.

Esthetician Fiona Burr also found herself on the receiving end of the company's lawyering. Burr, who had planned to work at the Refinery, reached a tentative settlement with Urban Retreat last month. Under the terms of that settlement, her non-compete will expire on December 15, rather than the following May. Burr says she settled only because of an additional clause in the employment contract: a stipulation that the employee can be made liable for all of Urban Retreat's attorney's fees in the event of a legal dispute. Now earning her living as a coffee-shop server, Burr says she couldn't afford the risk of fighting on. She says she regrets ever signing the contract: "I was still in school when I took the job, and I just didn't pay a lot of attention. I was just happy to get hired."

While no hard numbers are available on the use of non-compete clauses in salons, the practice has become increasingly common in recent years, says Jessica Hafetz, the member services director of an Arizona-based trade group called the Salon Association. The organization, which boasts some 1,900 salon-owner members, was formed five years ago. According to Hafetz, one of the group's "pivotal" early efforts was a drive to educate salon owners about non-competes. Opinions about the propriety of the practice vary. "Many of our members don't use non-competes because they wouldn't want to sign one themselves, and don't feel comfortable asking their staffs to sign," says Hafetz. "But I know quite a few salon owners who have gone into court and won." Among the latter, Hafetz notes, is Tom Schmidt, the owner of Urban Retreat and a founding member of the association. In at least two other cases filed in Hennepin County, Schmidt has prevailed on non-competes.

Nolen Collins, a former spa manager at Urban Retreat, says the enforcement of non-competes against fired workers such as Lisa Cannon and Fiona Burr is unusual. "Usually, if you get fired you can take your chances, work where you want, and you won't get sued," he says. But Collins isn't surprised his old employer went after Cannon. After Collins himself was dismissed this summer, he received a notice from Urban Retreat reminding him of his own contract, which prohibits working within a ten-mile radius of the salon. "Non-competes are pretty common, but Tom Schmidt is the only company around here that really seems to go after people and try and make their lives miserable," Collins opines. The terms of his contract, he adds, has forced him out of his chosen field. He's now working in home-improvement sales. "It was not exactly my career goal," he says.

Tom Schmidt did not return City Pages' calls seeking comment for this story, but did pass the message along to his attorney Joanne Turner. In Turner's view, the number of current suits against former employees is merely coincidental. Urban Retreat, she says, is doing what any other business in a highly competitive field does: protect the interests of its "intellectual capital" and the goodwill of its customer base.

But Ben Skjold, who is the attorney for Williams, Burr, and Cannon, argues that Urban Retreat's non-compete clauses are unfair, reducing workers to a status of indentured servitude. "This is a free-market economy and workers should be allowed to sell their labor where they like, and when they like. Especially when you're talking about people who are making low wages in entry-level jobs, and who are maybe being treated poorly and sometimes even getting fired," Skjold says. "If you're talking about doctors or executives, I can understand using non-competes. Sometimes, I defend non-competes in court. But to me, beating up on people who are making $20,000 or $30,000 a year is unconscionable."

Back at her shop, Williams says she is less worried about prevailing on the legal merits of her case than her ability to fund the battle. She has already spent $5,000 on legal fees, and expects that sum to double before it's all over. "I think they just want to make an example out of me," Williams says. "I feel like they're saying, 'If you leave Urban Retreat, here's what will happen. We will bankrupt you.'"

"If they'd back off, I'd drop my countersuit," she adds. "I only want to be left alone."

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