Do Non-Compete Agreements Apply To Independent Contractors?
Hello, everybody. My name is Alan Crone, and welcome to our next installment in our Legal Bulletin series of Ask Alan answering questions from you about certain legal issues. Today’s question is, do non-compete agreements apply to independent contractors? Absolutely. They apply to independent contractors just as well as they apply to employees.
I’ve seen agreements between businesses that come together for a joint venture that have elements of non-compete agreements. These agreements are restrictive agreements that restrict one party’s ability to use information or business resources they obtain from another business during the course of a relationship that can be an employee employer relationship, which is frequently what you see. It certainly can be independent contractors. That probably is as important, if not more important than employees. It can be a little ticklish depending upon what business the independent contractor is in and how it relates to the enforcing company’s business.
The independent contractor may be reluctant to sign an agreement that restricts their ability to do business in a certain industry or product area or with certain customers because they may be looking to the next deal and don’t want to restrict themselves. So those have to be negotiated. If you’re an independent contractor and you’re concerned about it, don’t just say, Well, I hear non-competes are not enforceable, so I’m going to sign it and not worry about it.
These things can frequently be negotiated, but I am here to say that they can cause a lot of problems. If you aren’t realistic about them going in on the front end in order to be enforceable, they need to be narrowly tailored, and they need to be specific to a particular situation. And if you’re signing them, you need to make sure that you go into that with your eyes wide open because you can be presented with a cease and assist letter or a lawsuit after the fact that can cost a lot of time and money to resolve.
So, do non-compete agreements apply to independent contractors? Yes, they absolutely do. I would encourage you if you’re drafting them to consult with an attorney as you do that. And if you’re presented with one, it probably is a good investment to go see a lawyer, pay the consult fee to talk about the non-compete agreement and what it may or may not mean both before, during and after the engagement.
My name is Alan Crone. I hope you’ve enjoyed this bulletin. If you have, please share it on social media. Email it to friends and colleagues. Thank you for watching and I’m going to go get some justice.
Legal Video Bulletins: Do Non-Compete Agreements Apply To Independent Contractors?
Thank you so much for reading our newest episode of our legal video bulletins. This edition answers the question, do non-compete agreements apply to independent contractors? If you have more questions on non-compete agreements, click right here to go to our full blog section on non-compete agreements. The full video series of our Ask Alan Legal Video Bulletins can be found by clicking right here! To view this blog in video format, click the video below!