Q: What happens if you breach an NDA after the company has breached your contract and has not invoiced you?
My employer broke the Contract and didn't pay any employee any salary. So what if we break the NDA and start a company of our own ( different but similar content category with a focus user). In the NDA the owner has written not to work for competitors. We are a group of three individual planning to start our own startup and work on the similar topic. We won't use anything or document from our previous employee. Will this help us to start our own company?
A:
In California, a non-compete between a company and a former employee is invalide. That is, in California, a company cannot legally require an employee not to compete with the employer after the employment has terminated. This applies whether or not the company has breached the employment agreement and whether or not the employee has breached the employment agreement.
The obligations of an NDA might be independent of any obligation of the company (it depends on the facts). Any claim for damages for breach of contract by the employer could be offset against the employer's claim for damages breach of the NDA.
The principal benefit of an NDA for many employers is the ability to get a court to enjoin a former employer (or contractor) from using confidential information, not to get monetary damages. But if a fomer employee is not using any confidential information from a former employer, it's hard to see how an NDA would be violated. An NDA is a not a promise not to compete. It's a promise not to use confidential information.
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