San Bruno, CA asked in Business Formation, Business Law, Contracts and Employment Law for California

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?

1 Lawyer Answer
Richard Gary Burt
Richard Gary Burt
Answered
  • San Jose, CA
  • Licensed in California

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.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.