Should You Have a Non-Compete Clause for Independent Contractors?

When hiring a Virtual Assistant—especially as part of an offshore or remote-first team—one of the biggest questions many business owners have is how to protect their sensitive information and client relationships.

This is usually when non-compete clauses enter the conversation. At first glance, they seem like a good way to safeguard your business. However, when you’re working with independent contractors, the situation is more nuanced.

To understand why, it’s important to look at what non-compete clauses actually are, how they function in the Philippines, and why they often backfire when used in remote hiring.

What Non-Compete Clauses Are Designed to Do

A non-compete clause restricts a contractor from working with another business that offers similar services or is considered a competitor, usually for a period after the contract ends.

The intention is reasonable: to prevent valuable knowledge—like pricing structures, internal processes, client strategies, or product development—from being used against you.

However, most Virtual Assistants are independent contractors, not full-time employees. They typically work with multiple clients at a time and build their income through flexibility and project diversity.

When a non-compete attempts to limit who they can work with, where, or for how long, it can interfere directly with their livelihood. That is where the issue begins—not legally, but relationally.

Are Non-Compete Clauses Enforceable in the Philippines?

Yes—non-compete clauses are recognised under Philippine law, but they are only enforceable when they are reasonable in scope.

The law is designed to protect a person’s constitutional right to work and sustain a livelihood.

Therefore, enforceable non-competes in the Philippines tend to be:

Time-bound (commonly 6 to 24 months)
Specific to a type of work or industry
Limited to direct, clearly identified competition

If a non-compete is too broad—for example, preventing someone from working in any related industry at all, it is unlikely to be enforceable.

So yes, while non-compete clauses do expire, they must also be clear, fair, and justified. Otherwise, they offer very little real protection.

Why Non-Competes Can Backfire in Offshore Hiring

Remote teams work best when the relationship begins with clarity and trust. However, requiring a non-compete clause for independent contractors can unintentionally disrupt that dynamic—especially in virtual assistant engagements.

It Can Limit a VA’s Ability to Earn Fairly

Virtual assistants in the Philippines are typically independent contractors, meaning they rely on the ability to work with multiple clients to maintain a stable income.

A non-compete that restricts them from working with similar clients or within their field can unfairly restrict their livelihood—especially since they do not receive the benefits or security of an employee.

This imbalance can create resentment or hesitation before the working relationship even begins.

Pro-Tip

Consider a Non-Solicitation Clause instead. Instead of restricting where a Virtual Assistant can work, a non-solicitation clause simply prevents them from directly approaching your clients, suppliers, or internal staff for their own gain

They Don’t Protect Confidential Information Anyway

A non-compete controls where someone can work, not how they handle information.

If you want to safeguard client lists, pricing models, and process documentation, access control policies and confidentiality agreements are the real security tools.

If the goal is to prevent sensitive data from being misused, the most effective tools are:

A strong NDA
Clear access boundaries
Role-based permissions

Insight

A non-compete can’t stop someone from remembering what they learned. But a confidentiality agreement can stop them from using or sharing the information. That’s why transparency and access structure matter more than restrictions.

Non-Competes are Often Not Enforceable Internationally

For VAs working across borders, non-compete clauses are difficult to enforce in practice.

Philippine contract law generally requires restrictions to be reasonable and narrowly defined to be valid—meaning any clause that is too broad in time, industry, or geography is likely to be void or challengeable.

So even when signed, the clause often does not provide the real protection a client thinks it does.

The Impact on Hiring Quality

Highly skilled VAs often avoid clients who use restrictive clauses. They see it as a signal that the client may:

Lack trust
Micromanage
Struggle with boundaries

As a result, the businesses that insist on non-competes often attract less experienced talent—not because the rules work, but because the best candidates simply opt out.

Should Australian Firms Skip Non-Competes?

Recent data shows that non-compete clauses are becoming increasingly common within Australia.

According to the Australian Bureau of Statistics (ABS), 20.8% of Australian businesses use non-compete clauses, and of those, 68.2% apply them to most of their workforce—including non-executive roles.

Locally, this is often framed as a way to protect competitive advantage. But when this same approach is applied to offshore virtual assistants, it can work against the business instead of supporting it.

Filipino virtual assistants typically operate as independent contractors, and their value to Australian teams often comes from the range of industries, workflows, and clients they’ve supported over time.

This broader experience is what enables VAs to step into complex operations quickly, anticipate needs, and contribute more strategically than simple task execution.

However, a non-compete clause for independent contractors can restrict that growth. Instead of encouraging a capable VA to bring their best knowledge to the role, it may limit their professional development.

In effect, the business receives less insight, adaptability, and innovation from their contractor.

When Australian firms choose not to use non-competes, they position themselves to benefit from more confident, well-rounded, and proactive VA support built on experience.

Why Advice2Talent Does Not Use Non-Compete Clauses

At Advice2Talent, we don’t include non-compete clauses in our placements because we’ve seen firsthand how they can erode trust and reduce talent quality.

A strong working relationship begins with respect, not restriction—and that’s foundational to how we build offshore teams.

Every VA we place signs a clear and comprehensive NDA that covers confidential information, client data, internal workflows, and proprietary knowledge.

This ensures your business remains protected where it matters most, without limiting a VA’s livelihood or professional growth.

We also guide clients on practical information access—meaning sensitive systems and documents are shared intentionally, not by default. This reduces risk more effectively than a non-compete ever could.

Removing unnecessary restrictions supports that—and it’s one of the reasons our client–VA relationships tend to be stable, long-term, and high-performing.

Find Better Alternatives to Non-Competes for Virtual Assistants

A non-compete clause for independent contractors may seem like a practical safety measure, but in most VA engagements, it creates more issues than it solves.

It can damage trust, deter skilled candidates, and still fail to provide the kind of protection businesses actually need.

At Advice2Talent, we prioritise the long-term success of both the client and the VA—and that means choosing policies that support stability, fairness, and trust from day one.