Company Exclusivity as an Independent Contractor/Freelancer

Good day!

This is Lec. I would like seek for some legal advice regarding the following part of the contract of the company I am currently working for as a Home-based Online ESL Teacher. They do not consider us as employees but independent contractors instead.

Here is the part of the contract I would to ask for a legal advice.

"m. To refrain from engaging into, contracting with, or being employed in other online English tutorial services of similar nature and/or related with the business of the FIRST PARTY. In case of violation of this obligation, the SECOND PARTY shall be liable for liquidated damages in favor of the FIRST PARTY in the amount of Two Hundred Thousand Pesos (P200, 000.00)."


In the last years, call centers included this kind of rule in their contracts too but they got rid of this as this is not supported by the law.

Thus, is it alright that this company I am talking about is including this rule in the contracts that they want their teachers to sign to? If no, what is the specific law/code that supports this?

If yes, is it fair to pay that big amount when absolutely, there is no damage done to the company's part?


Any help/answer would be greatly appreciated.

Thanks a lot.

xene05 wrote:
Thus, is it alright that this company I am talking about is including this rule in the contracts that they want their teachers to sign to? If no, what is the specific law/code that supports this?

If yes, is it fair to pay that big amount when absolutely, there is no damage done to the company's part?

They have to protect their "investment" also so they will do the paperwork to ensure it.

You might think there is no damage, but they may think different, so it is up to each party to prove their allegation in court.

Similar contracts are rather common, because some of the "workers" have TAKEN customers, when quit working for the company, which FOUND the customers.
Other reasons can be the company has spend money at educating the "workers", and then the worker leave - soon - and stark working for an opponent company, or start own company.
Or the "worker" quit SUDDENLY, which can make big problems for the company.