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I had a contract and I worked at a company for several months. During this time our project leader negotiated with the parent company and formed his own company (with 2 other team members). Later the parent company publicly announced the creation of the spin-off company. For some members of the team (like me), the transition took more time. We're going to have our contract with the parent company terminated and sign new ones with the new company. Do I need a confidentiality waiver from the parent company?

My termination notice reminds me of confidentiality obligations. I asked a lawyer from the parent company about a waiver (or to mention the spin-off company as an exemption) and I was told that the IP rights are already transferred to the spin-off and therefore it doesn't make sense to add that.

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  • The way I see it is a "maybe". The key being "the IP rights are already transferred to the spin-off". I think a verification of that fact would be dispositive. Why? The Parent and spin-off will be legally separate entities. If you were under confidentiality to the parent for the same information now dealt-with by the spin-off and the parent retained the rights for your work up to the point of the spin-off - then theoretically they could try and enforce that. (it wouldn't make much sense and the founders of the spin-off would be in the same boat, but the claim by the parent is colorable) Jul 1, 2022 at 1:09

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Do I need a confidentiality waiver (from the parent company I worked at) to work at a spin-off company?

No. What the lawyer told you is right. The confidentiality reminder is pointless when transferring to the spinoff company, since this process is largely a form of restructuring.

The confidentiality reminder might be in consideration that the terminated employee could opt to work elsewhere and not in the spinoff company. But even in that scenario the reminder is irrelevant because it does not (and cannot) modify the terms of the contract the employee entered with the parent company.

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