I am an independent sales representative (not an employee) working and living in California, working for a manufacturer in Michigan. I sell their products and 1099 payment to me is commission-only based.
This is what is in my contract: The REPRESENTATIVE agrees , during the term of this Agreement and for a period of one year thereafter, that neither the REPRESENTATIVE nor anyone acting on the REPRESENTATIVE'S behalf, shall directly or indirectly, sell, advertise or offer for sale or solicit the sale of any products competitive to those manufactured or distributed by the COMPANY, in or outside the designated territory.
I have an opportunity to be hired as a direct employee by a competitor of the above company. Both companies have representation in the California territory and have competed for years.
Is this non-compete agreement enforceable by my current company (Michigan) against my new potential employer (Missouri) or me (California)?
The answer turns on several points and therefore requires more information including were you represented by counsel prior to and at signing of the agreement? Is there a choice of law clause in the agreement whereby it affirmatively states Michigan law (as opposed to California law) shall govern the interpretation of the agreement and govern disputes arising between the parties? Is the Michigan company "doing business" in California...meaning does it maintain an office (or manufacturing facility) here? Does it pay taxes here, etc.? To the extent CA law applies, California Bus & Prof. Code 16600 protects "employees" by severely limiting enforceability of non competition clauses against them. You were not however an "employee" of the company. You have stated you were acting as a commission based independent contractor. CA case law would have to be researched to determine if the 16600 has been interpreted to apply to an independent contractor.
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