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Freelance non-compete?

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Adam EricksonFreelance non-compete?
by on Apr 30, 2008 at 4:41:22 am

I have a dillema. I have recently been approaches by a company to work with on a regular basis as a freelancer. This sounds splendid and all, but one note raises a red flag. The company is asking me to sign a non-compete clause. Basically, it would bar me from working with other companies in town, working with their clients even if I am not a freelancer with them, and any work I come across on my own must be cleared with them even if it is not a client of theirs.

The question I'm wondering is if this is a regular practice or if it is something that should raise red flags? I certainly understand signing a NDA, but hadn't heard of a form like this for a person working strictly as a freelancer. Any thoughts? Thanks!


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Arnie SchlisselRe: Freelance non-compete?
by on Apr 30, 2008 at 5:22:16 am

[Adam Erickson] "Basically, it would bar me from working with other companies in town, working with their clients even if I am not a freelancer with them, and any work I come across on my own must be cleared with them even if it is not a client of theirs."

If they won't let you work for any other clients, then you're not a freelancer, your a staffer and they should withhold taxes and give you benefits.

If they don't want to do that then you should decline their offer, and tell them why.

Also, you should maybe let your local labor & tax departments know. It raises a red flag that they're probably not doing some other things that they're supposed to.

Arnie

Now in post: Peristroika, a film by Slava Tsukerman

http://www.arniepix.com/blog


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walter biscardiRe: Freelance non-compete?
by on Apr 30, 2008 at 9:34:09 am

[Adam Erickson] "The question I'm wondering is if this is a regular practice or if it is something that should raise red flags?"

No, this is NOT standard procedure for freelancers. Basically they would lock you in to working with them and nobody else. That's not the definition of a freelancer, that's an employee.

NDA's are standard procedure, non-compete is not. Do not sign that.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
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Mike CohenRe: Freelance non-compete?
by on May 1, 2008 at 1:36:56 am

walk away - or ask for a LOT of money :)


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Ken SummerallRe: Freelance non-compete?
by on May 1, 2008 at 1:43:55 am

Mike,

The OP is a friend and I know for a fact that the day rate that they have offered wouldn't put a tank of gas in a Yugo.

I read this Non-compete this afternoon and had a good laugh. I hope that others read this because this is the second time that I have heard of companies doing something similar. I really hope that this isn't something that is starting to catch on.

K


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Adam EricksonRe: Freelance non-compete?
by on May 1, 2008 at 1:44:51 am

I ended up not only walking away, but running.

They were offering $8/hr for shooting and editing. Apparently "that's the going rate in this town..."

...or so I'm told. Although I'm pretty sure I've gotten more for other jobs, so it's better to just stay solo in this one. Thanks for the advice everyone!



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walter biscardiRe: Freelance non-compete?
by on May 1, 2008 at 8:41:50 am

[Adam Erickson] "
They were offering $8/hr for shooting and editing. Apparently "that's the going rate in this town...""


Ha ha haaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa! No wonder they wanted to lock you up in a non-compete because the first time you took a freelance job somewhere else, you would wonder why you're getting paid so low.


Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
Read my Blog!
View Walter Biscardi's profile on LinkedIn


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Craig SeemanRe: Freelance non-compete?
by on May 1, 2008 at 12:10:05 pm

[Adam Erickson] "They were offering $8/hr for shooting and editing. Apparently "that's the going rate in this town..." "

You'll find higher paying work on craigslist. Please tell me this is a joke. There isn't a town in the western hemisphere that that could be a "going rate." Probably not in most other hemisphere's either.



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David Roth WeissRe: Freelance non-compete?
by on May 1, 2008 at 12:29:00 pm

[Craig Seeman] "There isn't a town in the western hemisphere that that could be a "going rate.""

Craig,

Its a place called "Lonesome Town," cuz I can assure you, there won't be any women looking to date a professional bringing home the bacon at eight bucks an hour.

David

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.


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Adam EricksonRe: Freelance non-compete?
by on May 1, 2008 at 12:54:46 pm

Unfortunately, the offer was not a joke. Thankfully, the going rate in this town is higher than $8/hr. I'm not sure what it is specifically, but I know it's more than the average fast food rate! :)

Adam C. Erickson
Adam C. Erickson Productions
http://www.adamcerickson.com


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Gary ChvatalRe: Freelance non-compete?
by on May 1, 2008 at 8:34:20 pm

Welcome to the Tarheel state!



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Eric PetersonRe: Freelance non-compete?
by on May 1, 2008 at 1:50:55 pm

That's North Carolina for you. Same thing here in Wilmington. Client drives a Hummer around and has all these deals in the works but is hesitant to pay your day rate for a professional when a friend of his will do for a 6 pack. Go figure.



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Craig SeemanRe: Freelance non-compete?
by on May 1, 2008 at 1:52:54 pm

[David Roth Weiss] "a professional bringing home the bacon at eight bucks an hour. "

At $8/hr one brings home Bac~Os®





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Steve WargoRe: Freelance non-compete?
by on Jul 11, 2008 at 5:43:23 am

[Craig Seeman] "Probably not in most other hemisphere's either."

Uh Craig, how many hemispheres are there?




Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
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Nick GriffinRe: Freelance non-compete?
by on May 1, 2008 at 9:11:01 pm

Good for you, Adam. Being restricted from working for ANYONE else is absurd and even if signed would be unlikely to stand up in court.

Occasionally when we hire freelancers we use a purchase order which specifies that they are not to contact the client directly either during the engagement or for a two year period thereafter. That's simply to protect us from a writer, art director, producer, etc. saying to our client "Psst. Hey you can get this cheaper by using me and bypassing these guys."

Frankly, there are only a few people with whom this has ever been a legitimate fear. For the most part we work with people we know and trust. I should also point out that the only time this kind of non-compete is even needed is for a writer, art director or producer whose job it is to really dig in and learn the client's business. Cameramen, grips, etc. rarely would have to learn enough about the client's business for this ever to be an issue.


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moody glasgowRe: Freelance non-compete?
by on May 1, 2008 at 9:21:15 pm

I once had a job offer, and they wanted me to sign a no-compete agreement... FOR THE WHOLE WEST COAST!!!!
Some people get a little bit of info, and they become dangerous. Especially to themselves...

moody glasgow
smoke artist / editor


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Ken SummerallRe: Freelance non-compete?
by on May 2, 2008 at 1:50:33 am

[moody glasgow] "FOR THE WHOLE WEST COAST!!!! "

Here's a quote from the actual non-com:

"This Addendum shall cover the Independent Contractor’s activities in every part of the Territory in which the Independent Contractor may conduct business during the term of the Agreement as set forth above. “Territory” shall mean the states of North Carolina, New York, Vermont, Minnesota, Illinois, Georgia, South Carolina, Virginia, California, Massachusetts and Michigan in the United State of America."

And another thing that Adam hasn't told you is that they wanted him to make his personal equipment available for the $8/hr.

INSANE!

K


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Mark SuszkoRe: Freelance non-compete?
by on May 3, 2008 at 7:44:51 pm

Boy I'm glad my keyboard has a protective skin on it!

Nick, I like your version of the agreement as you briefly described it, but I wonder if 2 years is a little long. I guess it has to depend on the specific market. I wouldn't blink at signing it for 2 weeks or 2 months, but more than a year, for one instance, seems excessive? How did you arrive at your figure, may I ask?


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Terence CurrenRe: Freelance non-compete?
by on May 4, 2008 at 2:24:21 pm

$8 an hour?!?!??!?!?

Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca


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Ron LindeboomRe: Freelance non-compete?
by on May 4, 2008 at 3:04:40 pm

[Terence Curren] "$8 an hour?!?!??!?!?"

What, is that a little too high, Terry???

:o)

Ron Lindeboom


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Terence CurrenRe: Freelance non-compete?
by on May 4, 2008 at 3:50:45 pm

$8 just makes minimum wage in California. No one can even live on that. Forget providing gear.

I'm just in shock that in the US anyone could be paying $8 an hour for a professional job! Of any kind!

Maybe we will be able to compete with China soon after all. :-(

Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca


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grinner hesterRe: Freelance non-compete?
by on May 4, 2008 at 9:07:01 pm

Non compete contracts are admissions that the grass is greener elsewhere. There is no reason to sign one of these ever, under any circumstancers, at freakin all. If a company wants to keep you from competing, it's their job to keep you happy.
It's bold enough for a company to ask a staffer to sign one of these but to ask a freelancer to disable himslef from freelancing is crazy. If working for a top secret entity, again they can buy some loyalty. Forcing it with a signature is bogus.



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Timothy J. AllenRe: Freelance non-compete?
by on May 6, 2008 at 12:37:32 am

I've signed reasonable non-compete agreements for certain long-term contracts. The key word here is "reasonable".

As Nick mentioned, there are certain roles in production where a contracted employee may gain enough knowledge to hurt the company that found the job and hired them for it. I understand that and respect it.

The definition of "reasonable" for a full-time employee is not the same as for a freelancer, since it would force you to give up one of the primary advantages of freelance work.

There have been times that I've refused to sign certain non-compete agreements - or negotiated them back with the employer to be "reasonable" before agreeing to the work.

An example:
Several years ago, I had a contract agreement presented to me that asked me to list every invention or licensable idea that I had before working for them. The contract stipulated that that company owned perpetual rights to any processes or innovations that I did not list on the document. It wouldn't have mattered if I could prove that I thought of the idea or process or innovation before my contract of employment - if it wasn't listed, they could claim it. It also stipulated that I could not work for anyone else "in the entertainment industry" during my employment - or for two years after. This was purely a TV production job so for me, as a songwriter and part-time technology enthusiast, the language was clearly overreaching. I marked those sections out and said "no thanks". Meanwhile, I saw MANY other people sign the same agreement without questioning it.

I really think that particular sections of that contract would have proven to be "unenforceable" due to the overreaching language, but I didn't want to be in a position to find out.

NDAs are another matter. I will always keep proprietary information to myself and I don't mind signing non-disclosure agreements at all. That's the nature of modern business, and I understand that companies need the right to protect the intellectual property that they work hard to create.

If I were a freelancer, a non-compete agreement would need to be extremely specific in scope and I would need to be compensated fairly to make up for any potential lost business during and after the term of the contract.





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Matt GottshalkRe: Freelance non-compete?
by on May 10, 2008 at 5:53:18 pm

Non competes are unenforceable. Don't sign it.

McGee Digital Media Inc.
24P HD Production and Post


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