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What to Disclose about Nondisclosure Agreements

What to Disclose about Nondisclosure Agreements (NDAs)

Earlier this summer, I remember sitting in a meeting with a potential client. They asked about solutions we provided for other companies and immediately our team lead jumped in to answer. He referred to some clients by name, but to others using generic descriptions like “a major health insurance provider.”

Though this seemed to confuse a few in the room, the team lead knew our nondisclosure agreement (NDA) limited how much detail we could share and even restricted how we publicly referred to some clients. That’s when I realized the importance of knowing the basics of your company’s nondisclosure agreements (NDAs).

What are NDAs, and why do they matter?

Nondisclosure agreements are legally-binding agreements to keep secret information shared as a part of doing business. They are often used by companies to protect proprietary or sensitive information and may also be put in place to protect an organization’s brand or trademark. In addition, NDAs can exist between individuals. For example, a nondisclosure agreement may exist between a contract programmer and a company to protect information the contractor learns about the company’s inner workings or processes.

Regardless of whether an NDA is between companies or individuals, all parties involved should be aware of the terms. Here are the questions I ask to protect my team whenever NDAs are involved:

What

  • What information is confidential?
    What information is private and cannot be discussed? This might include financials, pending patents, set of processes/procedures, new branding, patient diagnosis or test results. Even the company name might be protected under an NDA.
  • What information can be shared?
    Though there is information that is protected, there may also be information that can still be shared publicly. For example, a company may be able to post a client logo on their website even though they cannot expose specifics about what they did for the client.

Who

  • Who are the parties involved?
    Once everyone knows an agreement exists, they need to know all of the parties required to keep the secrets. This is pretty easy when there are just a few individuals involved. However, if the agreement is with a company, anyone in that company who is allowed to receive or use the sensitive information should also know about the agreement and be expected to adhere to it.

Where

  • Where is the agreement?
    The nondisclosure agreement should be available to those who are bound by it in case they need to review or reference it. This can be located in your company’s wiki, for example.

When

  • When do the restrictions apply?
    Coverage of an NDA can extend beyond the relationship between the parties involved. It’s important to know how long the sensitive information must remain secret as a part of the agreement. In some cases, it may be several years after the business relationship has ended. In other cases, it may be required that the information be kept a secret forever.

Why

  • Why is it important to keep the agreement?
    Breaching or violating an NDA can damage the client/contractor relationship. This unethical behavior can also result in penalty or legal action so it’s important to adhere to the terms.

You Need a Strategy for Handling NDAs

No matter how familiar your team is with NDAs, you want to have a plan for how to tell them about new agreements and potential NDA issues. This can be as simple as saying “we have an NDA in place for this project, so please do not mention our relationship with this client publicly.” It’s important to do this as soon as an NDA is in place, or maybe even treat nondisclosure as the norm for all projects until you hear otherwise.

If members of your team need to sign a nondisclosure agreement to work on a project, make a plan for that too. For an individual, the terms can usually be provided in a form to be signed. For a team, the terms agreed to by the company could be conveyed in a simple meeting at project kick-off. Regardless of whether an NDA is between individuals or organizations, providing everyone with basic information about it will give them a better chance of adhering to it.