Independant Contractor contract question

What is the name of your state? PA

I received a contract that contains the following non-compete clause. I am uncomfortable in signing it as it reads.

The Contractor agrees that while this contract is in force he shall not solicit business for or on behalf of any individual or other business and at any time after the termination of this agreement.

The Contractor agrees further that at any time during the term of this Agreement and for two (2) years following the termination he shall not communicate, convey or divulge any information pertaining to the accounts or customers of the Company, to individuals, companies or other entities which are directly or indirectly involved in the business or any other related business which may be deemed competitive with the Company.

There are a couple of other things as well that raise a red flag.

I am in PA, the company is in another state. They want the following:

The Contractor agrees to bear all financial responsibility to his agents, and/or employees; and that the Contractor shall maintain payroll and compensation records for his benefit and for the benefit of his employees as may be required by all Federal, THEIR STATE NAME and local laws, such books to be opened for inspection by the Company upon reasonable notice; and that the Contractor shall exonerate, indemnify and hold harmless the Company from and against, and shall assume full responsibility for payment of, all Federal, THEIR STATE NAME and local taxes, and contributions imposed, or required under Federal and THEIR STATE unemployment insurance, social security, workman’s compensation, and Federal, THEIR STATE NAME and local income tax laws, with respect to the aforementioned Contractor and his employees engaged in the performance of this Agreement.

It is the belief of the parties that the best protection which can be given to the Company and which does not in any way infringe upon the right of the Contractor to conduct any unrelated business is to provide for the restrictions described above. In the event that any of said restrictions should be as fully enforceable and that as so modified, the restrictions shall be as full enforceable as if it had been set forth herein by the parties. In determining any restriction hereunder, it is the intent of the parties that the court recognize that the parties hereto desire that this paragraph be imposed and maintained to the greatest extent possible.

I dont mind signing a contract that states I will not contact their clients for a certain period of time or divulge information about the company. However, I feel the way this reads I cant do business with anyone else ever.

Thanks for your view.
D. Anthony

Wow...

I think you're right to be concerned.

The first paragraph...the non-compete part...is way too nebulous to decide exactly what it is they're trying to prohibit you from doing. If you were to become a W-2 employee of this company, you could probably fight them in court over this should you leave and they try to enforce it. As a 1099 sub, you'd have a somewhat harder time.

The part about "...bear all financial responsibility ..." is really just a convuluted way of saying you, as a 1099 sub, are responsible for paying your own taxes, etc., and although much more wordy than it should be, is standard legalese for what they have to do to protect themselves from 1099s that don't pay their taxes.

And the "...belief of the parties ..." clause is another that is open to much interpretation. I'm not sure what they're trying to say there.

If you're seriously considering doing work with these folks, you might want to investigate working through one of the "employer of record" companies like

www.cecpeople.com
www.pacepros.com

that may be able to help mitigate your liabilities here...