Non-Compete Clause for a W2 Contract Worker

[sane]

My question involves independent contractors in the state of: New York

Hello ,
I have been working as W2 consultant through a staffing agency for 14 months now. I just found out the staffing agency has been cutting too much from my salary (The client pays them ~ $40 per hour and I get only $26 but I'm not sure if this is the normal price?) so I decided to work as independent contractor directly for the client.

However, my contract contains the following term: "Consultant will not solicit or accept employment (either directly as an employee, or indirectly as a contractor, independent contractor, or an employee of another vendor) from any Client at which Consultant provided services for X. This restriction will be binding upon the Consultant for one year subsequent to Consultant's termination of services for Client, whether such termination was voluntary or involuntary , with or without cause"

Also, the contract specifies the "Initial Term" from 11/5/08 to 3/31/09 and then it adds "after initial term has elapsed Consultant shall continue until completion of the project."

What are my options and what are the risks of working directly as independent and is it true that W2 contracts should never exceed 12 months according to the law?

Thank you!

[jk]

you apparently do not understand why you are getting $26/hour and the staffing company is getting $14/ hour more than that.

It is none of your business. You agreed to work for $26/hr and that is what you are getting paid. Then you have to realize the staffing company is paying an employers share of taxes plus they pay into unemployment insurance plus they might offer med coverage, vacation, or paid time off. Those are all costs that they do not get to keep.


then as a business, would you not expect them to make something from finding you the job, maintaining records concerning you, paying all their bills associated with you and hopefully making some amount of profit as well?

anyway, they utilize these non-competes for exactly the reason you present. They did the work of finding the job, hooking you up with them and now you want to run off.

Sorry, it doesn't work that way.

[sane]

jk, I don't know what you do and how you make your living, but I can tell from your reply that you are not only a biased toward companies that make money off others sweat but you're a rude person who does not deserve to be dignified with an answer, but I'm going to answer so if someone else has some real advice to give s/he can take my following points in consideration.

First of all, I've been working on W2 contract for 14 months (read: FOURTEEN - more than a year), now, speaking of "understanding", you don't seem to understand that W2 contracts are supposed to be limited to a short period (6 months, maybe 12 but not FOURTEEN). If I had known that they can unilaterally extend my contract indefinitely, I wouldn't have made such commitment with such salary.

Secondly, I've been working with no benefits whatsoever (why did you even assume I was getting medical coverage, vacation or paid time off?? where did I say that?) for more than a year, and the staffing company has been unilaterally extending my contract (originally intended for 3 months) based on a ridiculous clause with such a broad meaning.

Thirdly, doing a simple math, you will find that they made almost $23,000 off me, (assuming I've been working only 7 hours a day, which is not true for many months in which I had to spend days and nights in office working on complex project). "Run off"? They made $23,000 off of me and all they did is arranging for an interview and withholding my taxes and you say I'm "running off" ?

You apparently one of those lazy people who make money from others while he sits on a couch, which is why probably you took my question personally, but you were right about one thing in your post signature : "You might even want to ignore my advice.", that's exactly what I'm going to do. Next time, if you don't have a real meaningful advice, stay out of my threads please.

Anyways, I had sent my question to a paid lawyer online and I got this response from him:
"Yes they cannot extend it beyond the original one year term. You can work for the employer after you leave them. In our experience with staffing agencies they threaten action and complain but in my employment practice Ameritemps and some of the smaller agencies have never once filed suit against one of their temps for violation of the non compete clause. They have already gone beyond the time and they cannot unilaterally extend it forever. You could even argue that the project has finished and you are free to work for the employer without penalty."

I just wanted another real opinion from a public forum to confirm, but like what they say you get what you pay for....

[cbg]

Well, to start out with, I don't know what you think you should be receiving but at no time does the employee receive the whole amount that the client pays. Where do you think the money to pay for your benefits, your unemployment, your workers comp, pay the recruiters, the light bill, the rent on the office, comes from?

The clause in the contract you quote is standard. I have been working with staffing agencies from both sides of the desk for twenty-some years now and I have yet to see a contract without it. It is almost always legally binding on all parties and the only reason I'm not saying always is that I do not believe in superlatives. The staffing agency could, if they chose to, excuse you from it. They have no incentive to do so and a very great incentive not to do so. I wouldn't count on their cooperating with you.

They are not required to renegotiate the contract with you. You are free to ask; they are free to decline. I have never heard of law that limits contracts to 12 months. There is definitely no such law in my state.

Your options are to wait a year before going to work for the client company, or violating your contract and praying very hard that the staffing agency does not sue you because if they do, they will win.

[jk]

i gave you the answer. don't read the rest of you don't want. Heck, I don't really care if you read any of it. It doesn't change the answer.

(why did you even assume I was getting medical coverage, vacation or paid time off??

I didn't. I said if applicable. Do you have a reading comprehension problem?

.

Then you have to realize the staffing company is paying an employers share of taxes plus they pay into unemployment insurance plus they might offer med coverage, vacation, or paid time off.

go ahead and do what you want. Just don't cry when the staffing company calls up the employer and threatens to sue them due to the contract they have with them as well. You will then be out of a job from both places.

hopefully you can contract out to other businesses. The staffing companies know the game and they protect themselves on both sides of the business.

[sane]

cbg, Thank you very much for your response.
Are you saying I'm completely under their control and they can keep extending my contract as long as they want? Does not that defy the purpose of a consultant job which is supposed to be a temporary job? Is that a loophole to employ permanent employees without giving them any benefits?

If you mean by benefits health insurance or paid vacations, then like I said I get nothing of that sort. The only thing this staffing agency does for me, is withholding my tax and deposit my salary to my bank account and when I said zero benefits I meant that literally..

Also, I did not say they are not entitled to get some cut from my work salary but I'm saying their commission is too much for what they're doing for me (they arranged for my interview, withhold my taxes and that's it. They didn't even offer reduced health insurance prices).

Also could you please clarify if you're an attorney or not?

Thank you again!

[sane]

jk, it is not that I did not "like" your answer. You gave me a lecture of why I should appreciate the staffing agency which makes a lot of money off my hard work without giving me any benefits in return.

I wanted to know my options and risks not a speech of how I should just accept in what appears to me as abusing the law to make their lives easier but mine harder. On other hand, cbg did actually give me options (waiting for a year) and risks (losing the lawsuit). I still do not think that's fair for me, but if that's the law, then that's the law. (not to say I'm convinced by cbg's answer).

[sane]

Actually, they cannot sue the employer, I had discussed that with their legal department.

[PattyPA]

I'm convinced by cbg's answer. It's correct.

[jk]

=sane;388660]jk, it is not that I did not "like" your answer. You gave me a lecture of why I should appreciate the staffing agency which makes a lot of money off my hard work without giving me any benefits in return.

No, I was explaining that they do not get all that money you seem to think they do. There are taxes and other ovrehead they pay out of that money as well as making some profit. I said IF they pay bene's, there is that as well. I was simply trying to list costs they pay, or might pay from the money they get from you working as you are. Now, if you go IC, you are going to have to pay those same expenses so you really need to understand them before you jump in the water. The only one you would not generally pay into is unemployment but that would also mean it would not be available to you when there is no work for you. You just set home or look for other work and do without pay.

I wanted to know my options and risks not a speech of how I should just accept in what appears to me as abusing the law to make their lives easier but mine harder. On other hand, cbg did actually give me options (waiting for a year) and risks (losing the lawsuit). I still do not think that's fair for me, but if that's the law, then that's the law. (not to say I'm convinced by cbg's answer).]

she told you the same thing I did.

the one thing she did not mention that is quite likely relevant is what I did.

If the company you are performing duties for has a contract with the staffing agency, they could get sued as well. Or, if they are regular customers of the staffing agency, there will be an established relationship neither party would generally want to disrupt, especially for just one person.