Q: If an employer restructures a company because of money & converts me to 1099 status, does a previous non compete hold up

A: It is not possible to comment on the scope and applicability of the non-compete agreement without reviewing the actual language. I would like to comment, however, about this notion that you were converted to "1099 status" because of company restructuring. Your conversion to "1099 status" complicates your situation.

There are both federal and state laws that prohibit an employer from misclassifying its workers as contractors if those workers should be treated as employees. In other words, an employer does not have the prerogative to simply change your label from "employee" to "contractor" because it wishes to be free from payroll taxes and the other obligations attendant to the employer-employee relationship, such as wage and hour, non-discrimination, and unemployment compensation laws. The IRS and various other government agencies will look suspiciously on such situations. Regardless of the label the company and the individual use to describe their relationship, those agencies will apply their own standards, based on certain factors, including the economic realities of the relationship, to decide if the 1099/contractor label is actually a sham. Major considerations include whether the worker is in under the direction or control of the company, whether he or she is using company resources or required to be on site or to keep certain hours, whether the worker is providing a service that is not the company's line of business, and whether, as a matter of economic reality, the worker is more like an employee of that company rather than someone who is independently in business and taking on other clients.

If an applicable enforcement agency, in particular the IRS, disagrees with the employer's classification, then the employer will be liable for taxes and penalties.