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I was hired as an independent contractor (1099) in NJ. At the time I signed a commission agreement and non-compete. Now the company has asked the contractors to sign another commission agreement with lower commission rates or we will be fired. Do I have any legal recourse? This seems like an unfair business practice. I am in a highly competitive market and feel I am being treated unfairly. Can I pursue work else where? The non-compete does not specify geographic location. Is it enforceable in NJ?
Asked on September 26, 2011 under Employment Labor Law, New Jersey
Answered 13 years ago | Contributor
1) If the company fires you, the noncompete may not be enforceable--generally, they are only enforceable to the extent that the worker leaves employment, but not if the company terminates him or her. So if you don't sign the new agreement and are fired, the non-compete is probably not binding.
2) Even if you are not explicitly fired, it's possible that looking to significantly lower your commission may be taken to be "constructive termination" (effectively firing you), in which case you could quit and not be bound by the agreement.
3) Courts will generally "blue pencil"--or reduce in scope--non-competes which are too broad in terms of geographic area or time; the agreement will be enforceable, but at a lower level of impact.
Much depends on the specific language of the agreement and specific circumstances. You should consult with an employment attorney to better understand your rights before doing anything.
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