Employment Law Updates

A judge in Fairfax County recently voided a noncompete agreement for a worker whom a company classified as an independent contractor. The worker had signed an agreement that labeled her as an independent contractor, and also included a 2-year noncompete provision. She subsequently left the company and went to work for a competitor. When her former company filed suit to enforce the noncompete agreement, the judge ruled that the entire agreement was void because it misclassified her as an independent contractor when she actually was an employee. The judge concluded that the misclassification violated public policy and thus rendered the entire agreement unenforceable.

The judge did not specifically address the question of whether a noncompete agreement can ever be enforced against a true independent contractor. Theoretically, such an agreement with an independent contractor might be enforceable if properly drafted. The problem, however, is that noncompete agreements restrain the ability for independent contractors to do business with other parties, which appears contrary to the identity of an independent contractor versus an employee. The independent contractor should be free to do business with multiple clients. The non-compete agreement specifically limits the independent contractor’s ability to work for certain clients, which is the kind of control that an employer might exercise over an employee. Including a noncompete provision in an independent contractor agreement risks a court concluding that the worker was misclassified, as did the judge in Fairfax County.

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