I'm now threatened with legal action because I informed someone that I wasn't working there. Setting aside whether I can win against the confidentiality agreement, the argument I'm seeking is that I'm obligated to make it public knowledge, and thereby making the knowledge that I have quit inherently non-confidential.
I did own shares, so there may have been an SEC reg about that.
IRS requirements?
In all honesty, I think it would have been potentially making me complicit in fraud (if the company raised money while claiming that I was an employee) had I not informed anyone, so I did have reason to share this knowledge.
There must be some bad blood here, or some underlying issue that is causing your ex-employer to freak out. Worry about that. If your ex-boss is some crazy paranoid, that's the problem right there. No amount of legal argument will make a difference.
So let's add a little context.
I have back-salary that's overdue. I asked for a timeline. I got no timeline. I said I would sue in a month. I got a bunch of nasty stuff back.
I told one of the board members that I had resigned. They had no idea that I had resigned (almost three months ago), and I'm guessing that they were also the primary source of new leads for the company to raise. This is where "damages" and "best interests of the company" arguments seemingly deserve analysis.
My desire to distance myself from the company cannot be decoupled from my potential motive to derail the company by breaking the news. While I would consider it 100% right to enforce the ethics of disclosure on the company, I would prefer 100% legal if it goes to court, which it would do so as a big waste of time, but one that might require my attention.
I desire to spend zero time on this, and the other party has contacted me with the desire to also have no further interaction.
That's all fine, but what about the back-salary? A 3rd party would be right to say that I'm only after it because I don't want to be intimidated away from getting what's mine. A healthy course seems to wait for them to boil down and for me to get more stable in my new roll before asking for the payment.
The board member will probably want answers, so I won't totally be done for now yet.
And just three weeks ago, the CEO wanted to meet me in SF to catch up...
If the company owes you salary, you can file a wage-theft complaint with the state government and they'll go after the company. By law, they need to pay you what they owe you within a specified time after your departure.
If you work in California, the following may be relevant:
Law of Reciprocity. They felt threatened by you, and threaten back in return.
Man-up, meet with the CEO. Find a path to get what you want and importantly, what they want. The lawsuit route is typically a loser for everyone involved, except of course attorneys- who will happily charge only 'modest' fees.
Incidentally, you might find Stuart Diamond on negotiating a useful read > https://www.youtube.com/watch?v=ZOZo6Lx70ok
And the person you disclosed your decision to quit to is part of the company, and unlikely to be someone you are excluded from disclosing information to under a confidentiality agreement.
Assuming you were a full time employee you don't need to sue, but rather file a wage claim with the labor board. If your nice, you will send an EMAIL that your fling the claim on Monday unless you have a check before then.
If it's a board member of your current employer, the information is almost certainly not confidential anyway. Confidential information will probably be defined in your employment contract or NDA. Odds are it reads something like "Confidential Information shall include all [material][non-public] information, written or oral, disclosed, [directly or indirectly,] through any means of communication [or observation] by [the Disclosing Party [or any of its affiliates or representatives] to [or for the benefit of] [the Disclosing Party]."
That's a pretty typical boilerplate CI clause, with the bracketed sections being optional elements. You should consult your contract to find the relevant clauses and see if the definitions fit your situation. There may also be a list of specifically included or excluded information, so pay close attention to those.
Some salient points from this typical definition, which may or may not track your own contract's defintion: Confidential information is disclosed by the employer to the employee. Your resignation was not disclosed by the company to you. Your employment status is public information. Your employment status was not conveyed to you for the benefit of the employer. It is not a trade secret. Thus it is not confidential, for any of those reasons or all of them.
More generally, though this law varies in its precise definition and application from state to state, NDAs need to be narrowly tailored to protect the reasonable business interests of the employer. There is no reasonable business interest protected by preventing you from disclosing your employment status with the company. It is possible that there was some arguable interest in preventing you from disclosing information about any inter-personal conflicts or doubts about the business that led to your resignation, but the fact of the resignation itself is unlikely to be material to any reasonable business interest. Any NDA that purported to cover such information would be overbroad and would be entirely invalidated in court. Or if you live in Illinois or New York or a handful of other states, the court may revise the contract to eliminate the overbreadth, but much to the same effect in your case. Keep that in mind, because if your former employer sues, they risk a court invalidating the entire NDA, freeing you to disclose any otherwise confidential information you are in possession of, so their lawyers may strongly advise against such a suit and all their threats are empty.
Ultimately, you have three options: ignore them and drop your wage theft complain, ignore them and continue your complaint, or consult with an attorney. If they have not sent any written communication on the topic, you could probably just ignore them and proceed with a wage theft complaint to your state's labor or employment agency without too much worry, but that depends a lot on the particulars of your case and your state's laws.
Which is why I would recommend consulting an attorney no matter what. It's possible that the cost of defending a lawsuit would be greater than your lost wages so it's not worth risking a complaint. It's also possible that your state labor department has mechanisms in place to protect you against retaliation if you file a wage theft complaint, so you may not have to worry about that. Either way, you need to consult with a licensed attorney in your jurisdiction who has access to all the relevant information to make that assessment. You won't get good information from people on the internet because we don't know where you are located and so we don't know the laws. We also don't have anywhere near enough factual information to evaluate your situation.
In any case, if you forgo the wage complaint and decide to ignore their communications to you so far, you absolutely need to go to an attorney if you receive any written communication from them threatening a suit, especially if it is on legal letterhead. Bring it and a copy of your employment contract/NDA to an attorney. The attorney will draft a response letter telling them to go to hell and will assist you in protecting yourself from vexatious litigation.
As for SEC and IRS issues, there are very probably no such issues implicated, at least judging by what you've disclosed here. I can virtually guarantee you about the IRS. They don't give a crap as long as you pay your taxes. They won't hold you accountable for any withheld wages unless you actually receive them, so just make sure you take that into account when filing your taxes. Pay special attention to your former company's W2s or 1099s or whatever wage documentation they provide you to make sure they aren't overstating your earnings.
As for the SEC, the only even conceivably relevant issue would be insider trading under rule 10b-5. If you are disclosing insider information to someone who is trading on that information, you may be legally liable for securities fraud. That would only apply if the company's stock is publicly traded. If you even suspect that you may be involved in something involving trading on insider information, you absolutely 100% need to talk to an attorney ASAP, regardless of everything else I've said here.
As for securities law more generally, if you were a director or officer, there may be some concerns about potential violations of duties to the corporation or shareholders there, especially if you continue to own a significant share of the company's stock, but you did not provide enough information for me to say any more. If you were a D&O, you absolutely need to consult an attorney. Similarly, if it is a member-managed LLC, you will want to consult an attorney. Those issues are far too complicated, dependent on state law, and specialized for random internet consulting.
Unless you have something bizarre in your contract it's unlikely they could sue. Unless specifically stated the fact that you quit wouldn't be counted as company confidential information. Further more given the person you told is a board member of the company it's not clear that anything you told them could breach confidentiality.
Normally most companies have a clause specifically saying you can't claim to work for them after you leave the company.
Normally. Normally. One would think that I would ride the company's reputation, not the other way around.
You didn't elaborate on HOW you were threatened. If you don't get it in writing it didn't really happen. If it was a phone call follow up with an email to make things clear. You might find you get a fast retraction.
Your employment status is a fact that isn't proprietary, so it would be hard to argue that it should remain confidential, but that depends on the terms of your agreement.
In the end, you need a lawyer, not HN.
