Can I Collect Overtime if I Violated a Non-Compete Agreement?
Full Question:
Answer:
The answer will be a matter of determination for the court, based on all the facts and documents involved. It is possible that you may be exempt from the overtime requirements. Please see the statute below. If the non-compete agreement has been violated, the other party may raise a claim of "unclean hands" to bar a recovery of overtime. The clean hands doctrine is a rule of law that someone bringing a lawsuit or motion and asking the court for equitable relief must be innocent of wrongdoing or unfair conduct relating to the subject matter of his/her claim. It is an affirmative defense that the defendant may claim the plaintiff has "unclean hands".
One of the considerations will be the relationship between the contractor and former employer and whether the contractor you worked for is a client of the former employer or otherwise falls within the language of the non-compete agreement. A court will generally enforce a non-compete agreement if it is reasonable in terms of the restrictions on the employee. It should be limited in time and distance that it covers, so that the employee isn't prevented from earning a living. The agreement may contain terms that prohibit the disclosure of confidential information and solicitation of other employees. The employment of the individual is considered adequate consideration to make the contract enforceable. If another employer is aware of the non-compete agreement and intentionally seeks to interfere with its terms, it may be possible that that employer is liable for damages for intentional interference with a contract.
Courts will enforce non-competition agreements if:
-the employer proves that it has a legitimate business interest to protect by restricting the right to compete against it;
-the restriction on the other party's right to compete is no greater than that necessary to protect the employer's business interest; and
-the covenant not to compete is supported by consideration, meaning that the other party received something in exchange for it.
Please see the following NC statute to determine applicability:
§ 95-25.14. Exemptions.
(a) The provisions of G.S. 95-25.3 (Minimum Wage), G.S. 95-25.4
(Overtime), and G.S. 95-25.5 (Youth Employment), and the provisions of
G.S. 95-25.15(b) (Record Keeping) as they relate to these exemptions, do
not apply to:
(1) Any person employed in an enterprise engaged in commerce or in the
production of goods for commerce as defined in the Fair Labor Standards
Act:
a. Except as otherwise specifically provided in G.S. 95-25.5;
b. Notwithstanding the above, any employee other than a learner,
apprentice, student, or handicapped worker as defined in the Fair Labor
Standards Act who is not otherwise exempt under the other provisions of
this section, and for whom the applicable minimum wage under the Fair
Labor Standards Act is less than the minimum wage provided in G.S.
95-25.3, is not exempt from the provisions of G.S. 95-25.3 or G.S.
95-25.4;
c. Notwithstanding the above, any employer or employee exempt from the
minimum wage, overtime, or child labor requirements of the Fair Labor
Standards Act for whom there is no comparable exemption under this
Article shall not be exempt under this subsection except that where an
exemption in the Fair Labor Standards Act provides a method of computing
overtime which is an alternative to the method required in
29 U.S.C.S. § 207(a), the employer or employee subject to that alternate
method shall be exempt from the provisions of G.S. 95-25.4(a); provided
that, persons not employed at an enterprise described in subdivision (1)
of this subsection shall also be subject to the same alternative methods
of overtime calculation in the circumstances described in the Fair Labor
Standards Act exemptions providing those alternative methods;
(2) Any person employed in agriculture, as defined under the Fair Labor
Standards Act;
(3) Any person employed as a domestic, including baby sitters and
companions, as defined under the Fair Labor Standards Act;
(4) Any person employed as a page in the North Carolina General
Assembly or in the Governor's Office;
(5) Bona fide volunteers in medical, educational, religious, or
nonprofit organizations where an employer-employee relationship does not
exist;
(6) Persons confined in and working for any penal, correctional or
mental institution of the State or local government;
(7) Any person employed as a model, or as an actor or performer in
motion pictures or theatrical, radio or television productions, as
defined under the Fair Labor Standards Act, except as otherwise
specifically provided in G.S. 95-25.5;
(8) Any person employed by an outdoor drama in a production role,
including lighting, costumes, properties and special effects, except as
otherwise specifically provided in G.S. 95-25.5; but this exemption does
not include such positions as office workers, ticket takers, ushers and
parking lot attendants.
(b) The provisions of G.S. 95-25.3 (Minimum Wage) and G.S. 95-25.4
(Overtime), and the provisions of G.S. 95-25.15(b) (Record Keeping) as
they relate to these exemptions, do not apply to:
(1) Any employee of a boys' or girls' summer camp or of a seasonal
religious or nonprofit educational conference center;
(2) Any person employed in the catching, processing or first sale of
seafood, as defined under the Fair Labor Standards Act;
(3) The spouse, child, or parent of the employer or any person
qualifying as a dependent of the employer under the income tax laws of
North Carolina;
(4) Any person employed in a bona fide executive, administrative,
professional or outside sales capacity, as defined under the Fair Labor
Standards Act;
(5) Repealed by Session Laws 1989, c. 687, s. 2.
(6) Any person while participating in a ridesharing arrangement as
defined in G.S. 136-44.21;
(7) Any person who is employed as a computer systems analyst, computer
programmer, software engineer, or other similarly skilled worker, as
defined in the Fair Labor Standards Act.
(b1) The provisions of G.S. 95-25.3 (Minimum Wage) and G.S. 95-25.4
(Overtime), and the provisions of G.S. 95-25.15(b) (Record Keeping) as
they relate to the exemptions provided for in this subsection, do not
apply to any of the following:
(1) Hours worked as a bona fide volunteer firefighter in an
incorporated, nonprofit volunteer or community fire department.
(2) Hours worked as a bona fide volunteer rescue and emergency medical
services personnel in an incorporated, nonprofit volunteer or community
fire department, or an incorporated, nonprofit rescue squad.
Hours worked in accordance with this subsection shall not be considered
hours worked for purposes of G.S. 95-25.3 or G.S. 95-25.4.
(c) The provisions of G.S. 95-25.4 (Overtime), and the provisions of
G.S. 95-25.15(b) (Record Keeping) as they relate to this exemption, do
not apply to:
(1) Drivers, drivers' helpers, loaders and mechanics, as defined under
the Fair Labor Standards Act;
(2) Taxicab drivers;
(3) Seamen, employees of railroads, and employees of air carriers, as
defined under the Fair Labor Standards Act;
(4) Salespersons, mechanics and partsmen employed by automotive,
truck, and farm implement dealers, as defined under the Fair Labor
Standards Act;
(5) Salespersons employed by trailer, boat, and aircraft dealers, as
defined under the Fair Labor Standards Act;
(6) Live-in child care workers or other live-in employees in homes for
dependent children;
(7) Radio and television announcers, news editors, and chief
engineers, as defined under the Fair Labor Standards Act.
(d) The provisions of this Article do not apply to the State of North
Carolina, any city, town, county, or municipality, or any State or local
agency or instrumentality of government, except for the following
provisions, which do apply:
(1) The minimum wage provisions of G.S. 95-25.3;
(2) The definition provisions of G.S. 95-25.2 necessary to interpret
the applicable provisions;
(3) The exemptions of subsections (a) and (b) of this section;
(4) The complainant protection provisions of G.S. 95-25.20.
(e) Employment in a seasonal recreation program by the State of North
Carolina, any city, town, county, or municipality, or any State or local
agency or instrumentality of government, is exempt from all provisions of
this Article, including G.S. 95-25.3 (Minimum Wage).