Is it a breach of contract by hiring someone as an independent contractor that is under non-compete

Our company has a Settlement Agreement for 10 years, non-compete with our competitor which states upon termination or resignation, you may not work for the competitor for 2 years. The ten year agreement expires in Nov. 2011. We desperately want and need to hire someone that was termed from our competitor but again, the waiting date is November. Is it a breach of contract if we hired him as an independent contractor, 1099'ed him, with zero benefits until he is legally hire-able in November?

2 answers  |  asked Mar 16, 2011 11:26 AM [EST]  |  applies to Ohio

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Answers (2)

Neil Klingshirn
If a court order says that you cannot hire your competitor's employees until a specific date, it sounds like hiring the employee before that date would violate a court order, rather than breach a contract. The consequences of violating a court order are much more severe than breaching a contract, and you have much less room for error. If you violate the court order, you can be subjected to very serious costs, penalties, attorney's fees and even jail time.

Given the seriousness of the consequences of violating a court order, you run a huge risk trying to get around it with a technicality. You should get an opinion in writing from a competent and experienced attorney that your proposed plan will not violate the court order. Even then, make sure that you believe in the arrangement itself, since you could be walking on very thin ice.

posted by Neil Klingshirn  |  Mar 16, 2011 12:08 PM [EST]
Bruce Elfvin
The statement of the question is a little hard for me to respond to in a succinct manner. I have never seen a court-ordered 10 year non-compete. And it would seem that hiring a person in violation of a valid non-compete as an independent contractor will not avoid a violation.

I suggest that you get your paperwork together and see an employment attorney to determine where you may have or are crossing the line on a valid non-compete.

You can select one near you at www.oelasmart.net/directory

posted by Bruce Elfvin  |  Mar 16, 2011 11:41 AM [EST]

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