I have two primary jobs (teaching and as an engineer), but also do some contract work. I know there are other people here that do contract, so I was wondering if I missed something, or if I am just working for strange clients.
I am used to signing NDA’s. Been doing it for better than three decades. Until recently, they always addressed technology, trade secrets, business plans, and the like. If I own the IP (most common for the work I do), that was not covered, but the application might be as part of one of the general categories NDA’s tend to apply to. I saw, for years, pretty much the same boilerplate NDA from clients large and small, with minimal changes or special conditions.
The last few years I have been getting NDA’s that include clauses prohibiting me from disclosing the client (not unheard of, but historically unusual for me), and a few over the last year that explicitly prohibit the disclosure of the NDA itself. Just had my second one the ONLY prohibited disclosure of the client or existence of an NDA with the client.
Have I missed something? Or am I in some kind of twilight zone/outer limits land? We are not looking at large contracts. These are buy a round for the bar level, not buy the brewery.
I think people are using the “latest boilerplate” and assuming it’s both enforceable and “smart.”
LOTS of contracts like this turn out to be completely unenforceable. The NDA’s less than the non-competes.
I am not a lawyer. I’m not giving legal advice. Just sayin’.
Also, not a lawyer, however, I have also seen what seems to be an escalation in lawyers adding “protections” to NDAs which, as Mike points out, may actually make them weaker by making parts of them unenforcable and thus triggering a discussion about “severability” or whether the whole NDA is junk because of one bad clause or not, that’s up to the Judge, not the lawyer.
I use a quite old “two way NDA” which is largely symmetric in the obligations and benefits but large corporations have staff lawyers who have paid external lawyers way too much money to add extra cruft to their pet NDA.
I have worked on various things that are really secret in the past, for people who have the means of enforcement and the existence of the project or the organisation is frequently not something you are allowed to disclose, ever.
In my experience, it is not uncommon to engage commercially on a project where the existence of the project is not disclosed until some date, I have also had customers which we were not allowed to name and used a project code name for in all internal and external communications.
I would only really worry about the clauses corporate lawyers try to add claiming things such as;
any pre-existing IP of yours that you use in generating the IP for the client becomes the property of the client
any knowledge or skills you acquire during the execution of the project becomes the property of the client
These sorts of clauses are a very good sign as to the sort of organisation you are dealing with and if they do not respond reasonably to challenge, I would prefer not to risk an engagement with such a client.
I suspect that your client is trying to keep your (future) problems from being associated with their reputation more than anything else. If no one knows you did business with them, they won’t be dragged through the media slop like a dead hog to slaughter.
NDAs and contracts can be the devil alright, particularly for small business that does not have the time/resources to dispute if the need arises.
In general I have a few things I have picked up over the years.
(1) read it before signing!!!
(2) as mentioned alot of these are Boilerplate text. Most small companies are Ok with making changes of a reasonable nature so don’t hesitate to call out/amend something you don’t like.
(3) have an bidirectional NDA boilerplate document of your own that you like. Feel free to counter with that or offer it up if theirs is not immediately available. In fact I suggest signing one with all contract customers .