Legal Question in Employment Law in Virginia

This is a very difficult question, and you should probably have an atttorney review your situation in detail. (Not all are as expensive as you might fear.)

First, a person working under a 1099 is an "independent contractor" -- that is, a completely separate business. So, for example Office Depot as an independent business sells to everyone. A computer repair company repairs everyone's computers who call them.

In fact, the legal test to establish that one is truly a 1099 independent contractor and not an employee would INCLUDE the 1099 worker acting this way and freely providing servicers to many different clients. A professional who provides services to ONLY ONE company will have a hard time proving that he or she is not an employee.

Second, on the other hand, almost nobody truly understands this (or wants to understand it). Most businesses treat 1099 professionals as if they are employees. This is wrong. It is incorrect. They are bending the law and inviting trouble. But they THINK in terms of 1099 professionals being effectively employees.

So Company A will probably think of you like an employee and may be offended and upset, as if an employee was disloyal and went to another company.

They would be in the wrong. But that does not stop people from reacting badly and at least TRYING to make trouble.

Remember that there is a big difference between whether Company A could sue you and whether they would eventually LOSE. Whether they will LOSE in the end is different from whether they can TRY to cause trouble.

Third, of course, the most important question is what contracts you have signed with Company A. Virginia is a State that takes contracts (or the lack thereof) very seriously. So whetehr you have signed a contract, and what it says, will be very important in Virginia.

Fourth, you should see if Company B has signed any contracts with Company A that might affect this decision. This would NOT involve you directly. If you did not sign that A - B contract, YOU are not obligated under any A - B Contract. But if Companies A and B get in a fight over you, it could still affect you, even if you did not sign any such contract.

Fifth, we then get into the FUZZY areas.

Company A has a right to protect its trade secrets, commercial secrets, and proprietary information.

They could try to argue that you know about Company B and Company C by learning about them through your work at Company A.

That is probably nonsense. Unless B and C are secret organiations in an underground bunker, the existence of these companies is probably not a secret.

However, A may FEEL that you are using their secrets.

You should clearly reassure everyone that you have not and will not violate any confidentiality of any information by any of the companies A, B, or C, and you will carefully respect the rights of each of these companies.

The only way that Company A could restrict your ability to work for Company B or C is if they argue that you are stealing their trade secrets or confidential information and giving it to the other company.

Therefore, you are probably safer if you tell everyone clearly what is going on and assure them that that is NOT going to happen.

It is a lot harder -- MUCH HARDER -- for a company to run screaming to a judge about the danger of an "employee" stealing their secrets if YOU ALREADY TOLD THEM THEIR SECRETS ARE SAFE AND WILL BE RESPECTED.

Judges will tend to assume that the complaining company is correct if an employee sneaks away in the middle of the night.

Judges will tend to assume that the complaining company is full of nonsense if the employee has played it above board and already promised to respect everyone's proprietary rights and information.

If you tell everyone that you will carefully respect everyone's intellectual property, commercial secrets, etc., etc., almost every judge in Virginia will say (at worst) "I am not going to ASSUME that there will be a violation.... come back later if there is an ACTUAL problem." The judge will not speculate about what might happen.

Finally, an employee might owe a duty of loyalty to Company A not to take "corporate opportunities." SO if Company A could get the business for the new Company B project for itself, an employee might have a duty to let Company A have the chance to take the project and get the opportunity.

However, again, you are *NOT* an employee. People will try to think about you as an employee. But as a 1099 you are an independent business.

THerefore, I believe it would be extremely difficult to say that you have a duty to let Company A get the project when you are not an employee of Company A.

The problem would arise if (for example) a letter comes in to Company A proposing this new project. Having access to Company A's offices by your work there, you take the letter to Company A, slip it in your pocket, and take the project yourself, which was originally addressed to Company A. That would be the kind of thing that could be a problem.