Non disclosure agreement – restrictions

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Non disclosure agreement – restrictions

I am starting an independent contractor business that will represent a manufacturers product. I hope to sign on multiple product lines with other manufacturers, with my territory in California only. The non-disclosure agreement one manufacturer sent me says any arbitration or legal court matters are construed under the laws of the state of Colorado. I am doing business in California only. How can I protect myself from having to go to colorado for legal issues? Also, the non-disclosure agreement has a clause that says for 5 years after the term of agreement ends, I cannot sell any similar product to any of the customers I have been calling on. That sounds like a non- compete and I have not even signed an agreement to sell his product yet. I believe I am protected in the state of california for non compete for only 1 year and that the laws for California are if I only sell in California, then any court cases between the two parties must be in California. If I sign this agreement but then they do not sign me on to be an independent contractor, am I still bound by this agreement as it is written?

Asked on April 25, 2018 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You are not an employee, you write; you are an independent contractor. The protections against or limitations on non-competes are to protect *employees* only, not independent contractors, because employees are considered to be in a position of limited power vis-a-vis their employers, and therefore to need protection. As an independent contractor, however, you are legally your own separate business; businesses are considered to be in a position to bargain to what they want (e.g. negotiate terms) and/or to simply *not* do any business or enter into any transactions they feel detrimental to their interests; they are considered to be able to protect themselves. There, if you sign such an agreement as independent contractor, it is reasonably (or more) likely that you will be held to its terms. Do not sign any agreements you are unwilling to honor and live with--that may mean not doing business with certain vendors or suppliers.


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