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Can an Employer Refuse to Pay Wages Based on a Later-Signed Non-Compete

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  • 01-23-2017, 05:03 PM
    lawfacts
    Can an Employer Refuse to Pay Wages Based on a Later-Signed Non-Compete
    An employee was working as a tutor for a California company, and reached a point where he wanted to resign. His employer still owed him a substantial amount of money. Rather than paying him on the date that payment was normally made, the employer said that he would pay him "soon".

    The employee was approached by a student whom he had tutored, and agreed to provide tutoring services to that student.

    The employer then contacted the employee to come in for payment. The employer presented a contract that had a non-compete clause and said that the employee had to sign it or he would not be paid. The employee didn't work there any more, so he signed. The employer then pointed to a clause that said that the employee would owe $15,000 in damages if he performed work for a client of the employer after resigning, and said that the employee now owed the employer $15,000.

    Can the employee get paid, and can the employer impose that penalty?
  • 01-24-2017, 08:42 AM
    Mr. Knowitall
    Re: Employer Refuses to Pay Money Based on a Later-Signed Non-Compete
    If this is an actual employment relationship (not an independent contractor relationship) then the employer is doing everything wrong -- the employee needs to make a wage complaint with the state, and the non-compete is worth less than the paper upon which it is written.

    If this is an independent contractor relationship, there is a question of whether the person is properly characterized as an independent contractor, and the worker may want to have that relationship reviewed by the state department of revenue or IRS. However, if he is properly classified or wants to try to recover the money before the evaluation is complete, he should sue in small claims court. The non-compete, being signed after the alleged breach, is irrelevant -- you can't violate an agreement you have not yet accepted.
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