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September 3, 2018

NDAs: The Secrets That Make Friends and Why You Need Them

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Earlier this summer, I remember sitting in a meeting with a potential client. They asked about solutions we provided for other companies. Immediately, our team lead jumped in to answer. He referred to some clients by name, but used generic descriptions for others. For example: one client bore the name “a major health insurance provider.”

Though this seemed to confuse a few in the room, the team lead knew exactly what he was doing. He knew our nondisclosure agreement (NDA) limited how much detail we could share. It even restricted how we publicly referred to some clients. That’s when I realized a crucial truth. It is important to know the basics of your company’s NDAs.

What are NDAs, and why do they matter?

NDAs are legally-binding agreements between a client and the company they have hired. It keeps secret information about the client, that the client shared, as a part of doing business. They are often used by companies to protect proprietary or sensitive information. It may also come into play to protect an organization’s brand or trademark. In addition, NDAs can exist between individuals. For example, an NDA may exist between a contract programmer and a company. This would protect information the contractor learns about the company’s inner workings.

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 when their work involves NDAs:

What information is confidential?

  • Is there private information that cannot come up in discussions? This might include financials, pending patents, new branding, or a patient diagnosis or test results. Even the company name can find protection under an NDA.

What information can you share?

  • Protected information in an NDA doesn’t mean that everything is a secret. There may be other parts of the project that would be appropriate to share with the public. For example, a company may be able to post a client logo on their website. But, they cannot expose specifics about what they did for the client.

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 is the agreement?

  • The NDA 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 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 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 telling them about new agreements and potential 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. Oftentimes it’s best to treat nondisclosure as the norm for all projects until you hear otherwise.

If members of your team need to sign an NDA 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.

Compliance, in any industry, is something we value here at ABT. The rules and regulations can be difficult to navigate. If you’re in need of someone to help you find the balance between what you want to happen, what should happen, and what needs to happen, with regards to your website, we can help break it down for you.

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