Non-Compete Clauses for Freelancers (Part 2)

Non-Compete Clauses for Freelancers (Part 2)

You've signed a non-compete clause - what do you do now?

By Emma Meakin

Following from Part 1, your client, ABC Ltd, has you bound to its non-compete clause, but you really want the job with B Co Ltd. However, you don’t want to risk the law suit with ABC Ltd with breach of contract, so what are your options?

What are your options and defences?

There are various options and defences to a claim, but firstly how about simply speaking to ABC Ltd? It may be that this is its standard term, but since you produced a piece of work for the company, it may be agreeable to releasing you from the contract. But what if this doesn’t happen? Do you risk a potential law suit?

ABC Ltd may find out about your job through different routes: someone in the company may bump into one of your new colleagues, or your new boss could be proudly spreading the word of his newly appointed member of staff. The risk of ABC Ltd finding out about your new job is always there during the validity period of the non-compete clause.

B Co Ltd may be able to help - your boss wants you because they've hired you, so they may be willing to speak to ABC Ltd on your behalf or be prepared to buy you out of the clause. But again this isn't always an option, so don't rely on using this as a way out.

Normally, if you've signed this clause, you'll have to wait for the expiry of the term or avoid working within the stated radius. However, most companies aren’t unrealistic nor unreasonable, and will normally understand that there needs to be some give and take in a freelance situation. But it may be best to be safe not sorry and turn down, defer or ask to work in another location until such time you won’t be in breach of the clause.

Is it worth taking the freelance job?

Remember it's a balancing act, and you should consider whether the job for ABC Ltd is worth possible restriction on your future activity? Only you can answer this question but make sure you are certain of your feelings if you sign and agree to the terms. For more information on these clauses please see our Non-Compete Article on the Knowledge Hub.