I've worked for an agency as a contractor and was asked to manage the company for a month while the owner went on a Holiday. I was tricked into signing a NDA & never received a copy of it. This was about 4 years ago and now I am wanting to start an agency similar to the one I worked for. I asked for the papers I signed and was told that it was destroyed due to a water damaged laptop. Now that the owner has caught wind of me starting a competing company, he has sent texts stating that he'll pay $2000 to have the files recovered and that he has an attorney who is willing to work on contingency. Should I be worried? Can an NDA be honored 4 years later?
A non-disclosure agreement terminates according to its terms. The terms of an agreement can be written, spoken or implied. There is no universal expiration deadline on contracts. I have seen non-disclosure agreements with NO termination date - the party to which the confidential information has been disclosed is contractually bound to NEVER disclose or use it. It just depends on the circumstances.
An agreement entered into between parties is valid once agreed to and remains valid even if a copy is not provided to one of the parties, unless the terms of the agreement provide otherwise. The issue becomes one of proof, not validity. If the parties cannot prove the terms of the agreement because the agreement has been lost, then proof of the terms will be dependent on oral testimony about what it said. If the digitized signed agreement can be reclaimed from a damaged computer the court will certainly use that reclaimed copy.
Your post suggests you are thinking an NDA is the same thing as a non-compete agreement. Those are two very different agreements.
A non-disclosure agreement prevents the party to which confidential information was provided from using or disclosing the confidential information. NDAs are common and entirely enforceable as long as the court can determine the terms of the agreement and there is clear definition of what information is considered to be covered by the agreement.
Non-compete agreements are disfavored as a restraint on a person's ability to carry on their trade. The vast majority of states in our land will enforce a non-compete provision if it is narrowly tailored to address both the employer's interests while not overly restricting the employee's right to engage in their trade. However, in California, Business and Professions Code section 16600 makes unenforceable any agreement that restrains a person's right to engage in their trade, except in some very narrow circumstances. The California Supreme Court has held that this Code renders unenforceable a non-compete provision in California.
Do not feel like you are therefore free to run out and start a competing business without risk. A motivated former employer can use legal and unlawful practices to crush you in the infancy of your new business that you need to be fully prepared to address. It would therefore be critical that you seek out specific and confidential advice of an employment law attorney before you venture out. This is one clear situation where an ounce of prevention could be worth a pound of cure.
Good luck to you.
This answer should not be construed to create any attorney-client relationship. Such a relationship can be formed only through the mutual execution of an attorney-client agreement. The answer given is based on the extremely limited facts provided and the proper course of action might change significantly with the introduction of other facts. All who read this answer should not rely on the answer to govern their conduct. Please seek the advice of competent counsel after disclosing all facts to that attorney. This answer is intended for California residents only. The answering party is only licensed to practice in the State of California.
Before you start a business as described you need to consult an attorney to discuss multiple issues apparent from your post. 1. Were you an independent contractor under California law? If you were, a non-compete agreement may be enforceable against you. 2. What specifically does the NDA state regarding solicitation of employees or customers? Some short term restrictions may be enforceable. Finally, what information that you learned in working for this first company, will you use in your own business. In California, we have adopted the Uniform Trade Secrets Act, which prohibits one from using, for their own or another's benefit, confidential information they learned from a business. As you can see it's complicated.
This advice is general information about the law and does not provide legal advice for any particular situation. It does not form an attorney/client relationship or provide confidentiality.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline