Are non-compete agreements enforceable for freelancers?
While it varies on a case-by-case, state-by-state basis, many non-compete agreements are not enforceable. There are two (2) main reasons for this:
Overly restricts business – Because the very nature of an independent contractor is their ability to work for any company they wish, the courts can view a non-compete as a restraint on trade. On the other hand, if the non-compete is highly specific towards the types of employers the contractor can work for, covers a reasonable area, and is for a reasonable length of time, the agreement could be enforceable in a court of law.
Employment status – A major factor in determining if a worker is an employee or a freelancer is the degree of freedom they have. Because the exercising of a non-compete can be viewed as highly controlling, it could result in the worker being classified as an employee. Should this occur, the client could face tax penalties and a host of other issues. For this reason, many employers will hold off on enforcing the non-compete.