Independent Contractor Work Agreement With Non Compete Clause In Los Angeles
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FAQ
Yes, if you have signed one with your employer. However, non-compete clauses are operable only for a reasonable period of time only even if the clause mentions otherwise.
Even workers labeled as “independent contractors”—who should have the freedom to work for multiple clients—are often required to sign non-competes that limit where they can work. Employers often present non-competes as a “take it or leave it” contract, forcing workers either to sign or forego employment.
Yes. It affects everyone in the US, it's a federal ruling. You simply will not have any more non compete clauses in any employment agreements, outside the handful of given exceptions. That does not mean your employer has to tolerate your working for a competitor, however. You will just be subject to termination.
Noncompete agreements are typically deemed illegal under the California Business and Professions Code unless the agreement has been made between two business owners or partners.
Noncompete agreements are void and prohibited by law in California. QUICK SUMMARY: In California, noncompete agreements that are intended to prevent or restrain an employee from engaging in another lawful possession, trade or business during their employment have long been unenforceable.
The ban covers all non-competes for U.S. workers (including employees and independent contractors) with limited carve-outs, and is subject to certain exceptions based on the FTC's statutory authority.
As with many things, however, California is different. California law explicitly voids all non-compete agreements for employees and independent contractors. These agreements are simply not enforceable, no matter how reasonable they may seem.
The only exceptions are non-compete or restrictive covenants that fall within one of the narrow exemptions authorized by statute, all of which relate to the sale of the goodwill of a business, or of a substantial ownership stake in the business.
As previously reported (Dentons Alert), the US Federal Trade Commission (“FTC”) issued a regulation earlier this year that effectively bans most non-competes for employees and independent contractors (the “FTC Rule”). The effective date of the FTC Rule is September 4, 2024.