Does Nda Apply After Being Reclassified from Employee to Contractor

[budwad]

You're still an employee regardless of how you are classified by your employer. If you walk like a duck and quack like a duck, you're a duck, even if somebody says you're an owl.

My take: The agreement is potentially enforceable by your employer. I'm not sure that the "dirty hands" doctrine would provide you with a defense since you were complicit in the illegal misclassification.

An employee cannot be an IC and an IC is not an employee. That is a matter of law. The minute the employer reclassified OP as an IC and stopped paying payroll tax and workman's comp, OP became a 1099 contractor doing the exact same job. That is not just illegal but in some states, it's criminal.

The NDA is null and void. It's not enforceable against a non-employee. The action was taken by the employer not the employee. And the company screwed up by not getting a new NDA and a contract from OP.

The opening paragraph says "In consideration of my engagement as an employee of..."

So your theory is that you can change the parties to a contract and still have the contract valid? I don't think so.

[Taxing Matters]

The NDA is null and void. It's not enforceable against a non-employee. The action was taken by the employer not the employee. And the company screwed up by not getting a new NDA and a contract from OP.

So your theory is that you can change the parties to a contract and still have the contract valid? I don't think so.

The parties have not changed. The recitation in the agreement that states "In consideration of my engagement as an employee..." merely states the consideration given at the time of the making of the contract. As you know, all contracts require mutual consideration. That the OP later becomes an independent contractor (if he truly did, and that's certainly debatable here) does not change who the parties are. The OP is still the same person who signed that agreement, after all. Nor does that change in classification necessarily alter the obligations in the contract. As pg1067 correctly points out, one would need to read the entire contract to determine the effect that the reclassification might have on the contract. But certainly your argument that the parties have changed is a nonstarter. The parties are unchanged. Their work relationship may be changed, but that doesn't necessarily void the contract.

[budwad]

The opening paragraph says "In consideration of my engagement as an employee of..." and contains no reference that would include me later working for them as a contractor. I would be happy to post a redacted version of the document if that is allowed here.

My position is that under the NDA I would have been obligated to return any confidential information upon my termination and that would start the clock on the non-solicitation terms (for a period of two years). I was then given free access to all of the company's "confidential information" as a subcontractor with no NDA governing my relationship with the company as a subcontractor, so now could do with them as I see fit.

Thanks for your replies.

The parties have not changed. The recitation in the agreement that states "In consideration of my engagement as an employee..." merely states the consideration given at the time of the making of the contract. As you know, all contracts require mutual consideration. That the OP later becomes an independent contractor (if he truly did, and that's certainly debatable here) does not change who the parties are. The OP is still the same person who signed that agreement, after all. Nor does that change in classification necessarily alter the obligations in the contract. As pg1067 correctly points out, one would need to read the entire contract to determine the effect that the reclassification might have on the contract. But certainly your argument that the parties have changed is a nonstarter. The parties are unchanged. Their work relationship may be changed, but that doesn't necessarily void the contract.

The NDA is unenforceable under Georgia's common law. A non-disclosure agreement is very different from that of a non-compete agreement even if both are within the same agreement as appears to be OP's case. If the non-compete doesn't have the necessary time and geographic information, it too would be unenforceable.

From what little OP posted it says that the NDA is in force until OP is terminated. Well you will have to agree that OP was in fact terminated as an employee. One can not be an employee and an IC (doing the exact same job) for the same company at the same time.

A non-disclosure agreement which contains no time limitation is unreasonable and unenforceable. U3S Corp. of America v. Parker, 202 Ga. App. 374, 378 (2) (b) (414 SE2d 513) (1991). The non-disclosure agreement executed by MacDonald contains no specific time limitation and expressly prohibits disclosure "during or subsequent to the term of . . . employment" without limitation. It is therefore unenforceable

.

https://scholar.google.com/scholar_c...en&as_sdt=4,11

[Taxing Matters]

From what little OP posted it says that the NDA is in force until OP is terminated.

One needs to start by reading the actual agreement, and we don't have that here. Moreover, I read back through the thread and don't see where the OP makes he statement you describe.

Well you will have to agree that OP was in fact terminated as an employee. One can not be an employee and an IC (doing the exact same job) for the same company at the same time.

I will agree that if, in fact, he was actually converted from employee to independent contractor (and it takes more than just the claim of the employer that the employee is reclassified to achieve that) then his employment was terminated. But whether that termination would end his obligations under a nondisclosure agreement (NDA) requires, as a starting point, reading it. It is not the case in Georgia law that a NDA always terminates or becomes unenforceable the moment the employment relationship ends.

[budwad]

It is not the case in Georgia law that a NDA always terminates or becomes unenforceable the moment the employment relationship ends.

I never said that was the case. The case I cited makes it clear enough.

[Taxing Matters]

I never said that was the case. The case I cited makes it clear enough.

The case makes it clear that in that instance it was unenforceable because the contract did not set any time limit on the restriction. It wasn't the fact that the employee was terminated that made it unenforceable. It was that the contract would have imposed the restriction indefinitely after employment ended. This is why reading the contract is essential. The terms of the restriction in terms of scope and time do matter.

[budwad]

The terms of the restriction in terms of scope and time do matter.

I agree. But I'm just going on what OP posted. OP has offered to post the terms and conditions so let's see if they do.

The opening paragraph says "In consideration of my engagement as an employee of..." and contains no reference that would include me later working for them as a contractor. I would be happy to post a redacted version of the document if that is allowed here.