May 4th, 2016
Billy posed the following problem:
I work as a subcontractor but I’m asl working towards building my own business. This presents the problem that I’ve been trying to solve for a while. For example, as a subcontractor to one photography studio, my invoices are “[My Name] Photography” but I secretly have a separate trading name for my own business aspirations of which I’m trying to get client agencies of my own.
It makes my life really difficult because I have to keep my work a secret from my employer who I subcontract with which I’ve signed a non-compete agreement. I wish I could just operate without any secrets. I have my doubts about whether the non-compete agreement is legal.
I’d appreciate any suggestions on how to handle this situation. This situation is stressful!
I’ve talked to many others over the years that have this same issue. How do you transition into running your own business when your contract employer insists on signing a non-compete agreement.
My advice to someone in this situation would be to take a shot at being totally honest with your contract employer. Discuss with them the fact that you appreciate their business needs of not having their contractors steal their customers or investing in your training and having you leave. At the same time present your needs of needing to build a business that will support you. Try to negotiate an agreement that works for both of you.
Here here are some facts that bear on this issue:
- Laws that regulate non-compete agreements vary widely country to country and state to state. In the US non-compete agreements are regulated by State laws so you have to research the situation in your own state. In California non-compete agreements are illegal and unenforceable except in very limited situations. Other states have laws that make non-compete agreements easier to enforce. It would probably be worthwhile to get some local legal advice.
- In most locations, a non-compete agreement only applies to an employee, not to an independent contractor. If you really are an independent contractor non-compete agreements may not apply to you.
- Courts generally insist that non-compete agreements be reasonable to be enforceable.
Has anyone out there had direct experience with non-compete agreements?