Q: I recently signed a work contract with a company, but I wish to leave. I am a 1099 worker, can they sue me?
I signed neither a W9 nor W4 form, the contract states that I must work exclusively with the company for 6 months, and cannot work with a competing business or open my own within 3 years of working for them. I thought nothing of it when I signed it, but I am, according to the document, a 1099 independent contractor. An exclusivity agreement seems to contradict the title of independent contractor. Furthermore, my training is very specific and I invested in my own education, it was not paid for by the company. The rate of pay at this company is a commission rate below what minimum wage would be, so restricting me from work is extremely burdensome. I do not think that the contract I signed is enforceable because it seems to have been written for an employee, without the responsibilities on behalf of the employer. I intend to quit this "job", I would like to know if they have grounds to sue me for working in my field. Also, at this point I have not received any form of compensation.
A:
Non-compete clauses are common in independent contractor agreements. Otherwise you could work for them and take their client list and then go out on your own. So, there is a high probability it would be enforceable, at least in part. Most states though will limit them to reasonable restrictions, and it does not sound like there is a geographic limit to the contract.
Also, if you move to California, non-compete agreements are basically void on public policy grounds, so you may be able to open a business there.
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