Independent Contractor with W-2 and Non-Compete

[aldehyde_ketone]

My question involves independent contractors in the state of: Georgia

Hi everyone,

I'm currently working as an independently contracted tutor for two separate tutoring companies (X1 and X2 for short), which don't have non-compete agreements. X1 and X2 have at-will agreements and I am free to choose my hours with them and leave at any time. I can also work for other tutoring companies while with X1 and X2, I just can't use their clients one year after I leave.

However, a third tutoring company (let's call them X3) contacted me and began training me while I settled employment contracts with X1 and X2. At the X3 interview, they did mention they wanted me to sign a non-compete clause. They said they'd let me finish up the hours with my X1/2 clients but after that, I'd only be working for X3. I decided to wait until X3 gave me a contract before saying anything to X1 and X2 and losing clients. X3 didn't give me a contract until today - about a week into training and 2.5 weeks after interviewing me. I've already signed X1 and X2's contracts.

X3's contract has a non-compete clause partially stated below:

"Non-Competition, Non-Solicitation, Hiring. The Employee agrees that during the terms of his/her employment, and for a period of two (2) years thereafter (irrespective of the reason for termination), he/she shall not, directly or indirectly, either as an owner, officer, director, employee, sole proprietor, partner, member, contractor, consultant or otherwise:

(a) perform Tutorial Services in the Geographic Area (note: this area is previously defined as "all of that area located within a 10 mile radius from every office maintained by the Company in the State") unless such Services are rendered at the direction of the Company and for the sole benefit of the Company

(b) perform Tutorial Services for any person who resides in the Geographic Area, unless such Services are rendered at the direction of the Company and for the sole benefit of the Company;

(c) use any testimonial given to him/her by a Client for whom Employee performed services during the course of his/her employment with the Company;

+conditions about confidentiality and about not stealing clients or employees

While filling out the paperwork, X3 also told me I'd be receiving W-2 forms instead of 1099's. However, I choose and log all of my own hours, and I receive no benefits from X3.

I haven't signed X3's contract yet because I'm not sure what to do.

My questions are:

1. If I signed X3's contract, would the non-compete be enforceable? My friends claim that the non-compete doesn't apply because I'm not an employee of the company, but they're not lawyers.

2. Am I an employee or independent contractor? I contacted an X3 admin and they said I was an independent contractor, but it never states that in the contract. It does state that hiring is "at will." Can independent contractors get W-2 forms?

3. Would you advise signing X3's contract or just dropping them and going with X1 and X2? All three companies pay about the same rate. (Sorry, I know that's not strictly legal.)

4. I've already started training with X3 so I know some of the company's methods and internal phone numbers, access codes, etc. If I left them would I be breaking the law? I would willingly give back any materials they gave me.

5. X3 sells test prep materials on Amazon. They also provide the same test prep materials to the trainee tutors (like me) and to all of their clients/students. If I bought these materials on my own and decided to use them to teach my non-X3 students, would I again be breaking the law?

I'd appreciate any help you can give me. X3 wants the paperwork as soon as possible, but I don't want to give them any information, especially not a contract, before I figure this out.

Thank you!

[jk]

1. If I signed X3's contract, would the non-compete be enforceable? My friends claim that the non-compete doesn't apply because I'm not an employee of the company, but they're not lawyers.

that has nothing to do with whether a non-compete is enforceable. A non-compete is simply a contract. Either an employee or an IC can enter into such a contract

2. Am I an employee or independent contractor? I contacted an X3 admin and they said I was an independent contractor, but it never states that in the contract. It does state that hiring is "at will." Can independent contractors get W-2 forms?

IC's are given 1099's. Employees are given W-2's

3. Would you advise signing X3's contract or just dropping them and going with X1 and X2? All three companies pay about the same rate. (Sorry, I know that's not strictly legal.)

You are right. That is something you will have to determine. Personally, I would not want to limit my future possibilities with the 2 year non-compete unless there was a way it would not be enforceable such as if you were fired rather than terminated AND signing with X3 was financially superior to remaining with the other companies.

4. I've already started training with X3 so I know some of the company's methods and internal phone numbers, access codes, etc. If I left them would I be breaking the law? I would willingly give back any materials they gave me.

that may or may not be enough. You may have some financial liability to them for what you received. That is something you will have to determine based on any contract you may have with them.

5. X3 sells test prep materials on Amazon. They also provide the same test prep materials to the trainee tutors (like me) and to all of their clients/students. If I bought these materials on my own and decided to use them to teach my non-X3 students, would I again be breaking the law?

You may be violating a term of the purchase. Without reading any restrictions on the material, it is impossible to say.



are you willing to not tutor in the area X3 offers services for 2 years after your contract with X3 terminates? And notice, it says terminates for any reason. That would mean if you sign today and are fired tomorrow, you cannot tutor in the geographical area X3 offers services for 2 years.

[aldehyde_ketone]

For question 4: Yes, it is paid training, but I'd be willing to return the money paid to me as well.

Question 1:

Could X3 sue me if I continued working for X1 and X2 after finishing my current clients and signing X3's non-compete?

[jk]

Question 1:

Could X3 sue me if I continued working for X1 and X2 after finishing my current clients and signing X3's non-compete?

based on the contract, you couldn't even continue with your current clients with X1 and X2. Verbal amendments to a written contract mean nothing.
But even if they allowed you to continue with X1 and X2 clients, the non-compete would prevent you from working for X1 and X2 after your work with X3 is terminated.

If you do accept this and you want your work with X1 and X2 to be excluded, you have to make sure that is in the contract.

[llworking]

Personally, I would not sign that contract and I wouldn't work for that company. Not being able to tutor at all in that geographic area for two years after leaving that company would be a deal breaker for me.