Is a non-compeate contract legal if you are told “sign it or you don’t get paid”?
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Is a non-compeate contract legal if you are told “sign it or you don’t get paid”?
I am a independent contractor for a broker as a oversize load escort. About 1 1/2 years, she came up with a non-compete contract. In quick terms it says that if we are terminated or quit for any reason we cannot be a employee of, investor, advisor, owner, officer, etc of another escort company within the world for a period of 24 months. When this was presented to us (myself and other co-workers) she had said sign it or we don’t get our paychecks. Also, we were never provided a copy.
Asked on January 13, 2012 under Employment Labor Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
A noncompetition agreement is valid if you're told to sign it or be fired (or not get new work, if you're a contractor)--agreeing to the non-competition becomes a term or condition of employment. However, if you already did work for which you should have been paid, your checks/pay cannot be held until you sign--you have a right to be paid for the work already done.
Technically, this means that there was no "consideration" for signing the agreement; consideration cannot be something to which you are already entitled. That would, technically, make the agreement unenforceable.
Practically, that may not help you: if the broker testifies (if this went to court) that she also said you would not get additional work unless you signed, that may be enough to find the agreement valid.
However, while noncompetes are enforceable, courts will cut them back ("blue pencil" them) to more reasonable levels if they are too broad or too long. Generally speaking, an agreement precluding you from working anywhere in the world, in your field, for 2 years would be considered much too broad--a more reasonable agreement would have been to preclude you from working in her geographic market for a period of 6 - 12 months. It is likely, therefore, that you could at least have the agreement cut back in terms of its scope; however, for a more definitive opinion as to that, you should consult with an employment law attorney who can review the specific terms of the agreement and the facts of your employment and industry with you.
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