I own a small company that hires subcontractors to sell water and lemonade to seated customers at an entertainment venue in

Asked over 1 year ago - Corona, CA

southern California. The venue has decided to bring in a second vendor to do the same thing that I do, sell water and lemonade to seated patrons, but in a different part of the venue for a concert coming soon. The vendor they are bringing in does more events and larger events than I do. We both pull from the same pool of subcontractors. I am being told by the subcontractors that had agreed to work for me, that they are being told by the larger company, that if they do work for me, they will not be allowed to work at any of the larger companies other events or venues. Is that legal?

Attorney answers (3)

  1. Samuel G Lockhart

    Pro

    Contributor Level 7

    5

    Lawyers agree

    Answered . The "larger company" can refuse to engage the subcontractors for any nondiscriminatory reason.

  2. James Carl Eschen III

    Contributor Level 16

    5

    Lawyers agree

    Answered . Mr. Lockhart is generally correct. Although the larger company cannot require these subcontractors to sign a contract saying that they will not work for you, it does not have to hire them, either. There behavior of refusing to deal with anyone dealing with you may be considered monopolizing behavior, and you may want to consult with an anti-trust attorney.

    My concern is whether these "subcontractors" really are that or employees. It sounds to me as if you tell them what to sell and when to work. They are engaged in your primary line of work: they do your selling for you. If you have misclassified them as subcontractors, you are subject to a fine, and you will face tax, workers compensation, unemployment, and wage consequences. Assuming these subcontractors are individuals, the only way I can see that they could in fact be true independent contractors would be if you allowed them to set their own prices.

  3. Ivan Jose Parron

    Pro

    Contributor Level 15

    2

    Lawyers agree

    Answered . I agree with my colleagues. And even if the activity is not "illegal", there may be a cause of action such as tortuous interference with a business relationship. There may be additional causes if the entertainment venue is a "state" owned enterprise. You should consult with a litigation attorney who can listen to all of the facts and give you a legal opinion.

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