As an independent contractor who receives a 1099, can my employer require me to sign a non- compete agreement?
1 Answer from Attorneys
A truly independent contractor wouldn't have an 'employer.' Issuing a 1099 is only one factor and the law will scrutinize such arrangements to make sure they are truly that of a independent contractor engaged by the hiring company. However, assuming one is truly an IC, there is no one general answer and the analysis is very fact-specific.
Persons who are not employees can and do sign non-competes. For instance, a seller of a business may agree to not compete with the buyer. Sometimes the seller agrees to perform IC consulting work to the buyer and also agrees not to compete elsewhere. Other independent businesses may agree to work on a project and not disclose trade secrets or compete in specific areas related to a joint venture. Other types of non-competition agreements between parties not in an employer/employee relationship can violate the law, particularly where they create a restraint on trade.
While I hope the general information above helps, you are encouraged to seek legal advice specific to your situation.