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In Pennsylvania, can contractors (as opposed to employees)

be asked to sign a...
In Pennsylvania, can contractors (as opposed to employees) be asked to sign a non compete agreement and is such an agreement legal and enforceable on contractors?
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Answered in 2 minutes by:
6/4/2013
Tina
Tina, Attorney
Category: Business Law
Satisfied Customers: 33,167
Experience: licensed attorney for 13 years including employment, business, contract, domestic, and general civil
Verified

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. Before I can give you an accurate answer to your question, please provide the following additional information:

Is the worker already employed by the company or just being offered employment?

I look forward to assisting you as soon as I have received this information. Thank you.

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Customer reply replied 4 years ago

Individual is not an employee but rather a contractor. Individual is questioning the validity of the non compete clause in the original contract that she signed at the beginning of her service. She has terminated her service under the contract but we wish to enforce the non compete clause.

I see. Thank you for clarifying that, Gerry.

Yes, such contracts are generally enforceable with regard to independent contractors and courts would utilize a similar analysis in determining whether the contract is enforceable.

For example, if the non-compete provision is included in an offer of employment as an independent contractor, then the courts will typically find that there is consideration to support the enforceability of the agreement. Whereas, if the company were to have an IC sign such a provision after they have been hired with no new incentives, PA courts have found there is no consideration to support the contract.

However, if there is adequate consideration, the contract is enforceable to the same extent as against an employee typically.

Here is a link discussing a case where enforcement was sought against and independent contractor:

http://www.jacksonlewis.com/resources.php?NewsID=3800

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need so I will be compensated for my time from the deposit you posted with this website. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina


Tina
Tina, Attorney
Category: Business Law
Satisfied Customers: 33,167
Experience: licensed attorney for 13 years including employment, business, contract, domestic, and general civil
Verified
Tina and 87 other Business Law Specialists are ready to help you
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Customer reply replied 4 years ago
Almost there. Followup: the contractor in question argues that the non compete clause makes her an employee rather than a contractor even though her contract identifies her as a contractor and the company has not required her to follow traditional employee procedures regarding hours, travel, etc. Under PA law can she successfully argue for unemployment compensation based on her non compete argument?
Hello again, Gerry.

No, a non-compete provision does not make a worker an employee rather than an IC typically. It can be used as a factor in determining the worker's status since IC's must normally be free to engage in their trade or profession, without control from the employer. However, if the IC was compensated in return for their agreement not to compete for some period of time, a court can enforce it.

Here is a link which provides information on the factors which should be considered in determining whether a worker is an IC or employee:

http://www.portal.state.pa.us/portal/server.pt?open=514&objID=552116&mode=2
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Tina
Tina
Tina, Attorney
Category: Business Law
Satisfied Customers: 33,167
33,167 Satisfied Customers
Experience: licensed attorney for 13 years including employment, business, contract, domestic, and general civil

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