As an independent contractor, you may be asked to sign a non-compete clause as part of your contract with a company. This clause essentially prohibits you from working with a competitor of that company for a certain period of time after your contract ends.
Non-compete clauses are somewhat controversial and their enforceability varies from state to state. However, as an independent contractor, it`s important to understand the potential implications of signing such a clause.
The primary purpose of a non-compete clause is to protect the company`s intellectual property and competitive advantage. For example, if you`re a freelance writer working with a marketing agency, that agency may not want you to work with their competitors and potentially share their trade secrets or strategies. Similarly, if you`re a graphic designer creating branding materials for a company, that company may not want you to work with their direct competitors and potentially create similar designs.
If you`re considering signing a non-compete clause, it`s important to review it carefully and consider the following factors:
1. The scope of the non-compete clause: How broad is the clause in terms of the types of companies or industries it applies to? Is it reasonable given your industry and the types of work you do?
2. The duration of the non-compete clause: How long does the clause prohibit you from working with a competitor? Is it reasonable given the nature of your work and the industry you`re in?
3. The compensation offered: Are you being compensated fairly for the potential loss of income you may experience as a result of the non-compete clause? Will the compensation cover your expenses during the prohibited period?
4. The potential consequences of violating the clause: What are the consequences of violating the non-compete clause? Is it worth the risk?
In some cases, you may be able to negotiate the terms of the non-compete clause with the company. For example, you may be able to request a shorter duration or a more limited scope. However, if you`re not comfortable with the terms of the clause, it`s important to speak up and potentially decline the contract.
Overall, non-compete clauses can be a useful tool for protecting a company`s intellectual property and competitive advantage. However, as an independent contractor, it`s important to carefully review and consider the potential implications of signing such a clause.