In many cases, they are not. Non-competitions can increase the risk of a poor rating. Remember, independent contractors are in business for themselves. In the analysis of independent contractors against employees, the freedom to work for others, including competitors, is a compelling factor in contracting status. California`s non-competing laws are unique and structured differently in the rest of the country. In addition to being massive in geographical size, the state of California has a huge and undeniable impact on the economy and financial layers of the country and has the sixth largest economy in the world, which surpassed the entire French nation last year. California courts have generally treated clauses limiting client demand as non-compete agreements, meaning those clauses would not be applicable. However, the courts, both nationally and federally, have supported the section 16600 trade secrecy exception and have also authorized the application of non-requests for trade secrets. Non-compete bans for employees and independent contractors are illegal in California. Also consider whether your relationship with the contractor – where the contractor has access to confidential information, cannot disclose it, cannot use it otherwise and cannot work for competitors – is considered a supplier relationship. If the protection and control of what the contractor does is so important to your business, the contractor may be better classified as an employee.
A non-compete clause is a “restrictive agreement” used to limit an employee`s behaviour or action as soon as he or she no longer works for a company. They limit the location and manner in which a former employee will work, effectively preventing him from working for a competitor. As a general rule, these agreements are in effect only for a limited time, not permanently. These agreements are usually presented when a person completes their initial rental documents. The Dowell court also found that a court can decide whether a non-compete clause is illegal in law, without even having to deal with trade secrets. It is important to understand the difference between non-competition clauses and clauses to protect confidential information.