Have you been asked to sign a nondisclosure agreement? In recent months, I have been asked three times to sign such an agreement, and three times I have declined to sign the agreement as provided.
If you have been asked to sign such an agreement, how carefully have you considered its terms, what those terms mean, and what effect those terms might have on your business? Based on conversations with colleagues, I suspect that most of the time the agreement is just signed and considered a requirement of doing business. For the most part, I would think the agreement is meaningless — after all, exactly what trade secrets are editors being made privy to? — but because such agreements could return to haunt me years down the road, I am careful about what contracts I sign.
These agreements are particularly problematic when they are with an offshore company. Citations to foreign laws and provisions to litigate in foreign (to me) courts are red flags — these are two things that I simply cannot agree to. I imagine having a dispute with a client whose NDA agreement requires me to litigate in Indian courts. I have no doubt that Indian courts will fairly apply Indian law, but what do I know about either Indian law or the Indian court system? And based on what I read about how long litigation takes in India, I’d likely be buried before any dispute was resolved, after having spent many thousands of dollars prosecuting or defending an action.
It is bad enough when I am asked to sign agreements that are governed by U.S. law and courts. My pocketbook isn’t unlimited; it is paltry compared to that of the company that wants me to sign the NDA.
Interestingly, none of the NDAs I have been presented with have ever really defined what I am not supposed to disclose. They use terms like “trade secrets” but they never clarify what that means. I make it a point — before signing — to ask for an exhaustive list of what constitutes a trade secret. I want to make sure that (a) it is information to which I am privy and (b) that I agree that it is a trade secret. More importantly, I don’t want to be ambushed. How can I know what not to disclose if you don’t tell me specifically that the information is a trade secret?
The NDAs also usually include a very broad clause that is a mother clause to another, somewhat subsidiary, broad clause. The first says that anything you invent or improve upon becomes the company’s intellectual property. The child clause says that you give the company permission to execute your name to any paperwork it deems necessary to lay claim to your inventions. Together, both clauses cover everything you have done from the day you were born and everything you will do to the day you die (when read in conjunction with the clause that says the NDA will continue in force even after your relationship with the company ends).
I suspect that no reasonable court would uphold such clauses, at least based on my knowledge of American courts, but the truth is, I have no idea what a court in India or Germany or Spain or Tunisia or Brazil or anywhere but America is likely to do — and even with American courts, all I’m doing is “educated” guessing. To find out what a court would in fact do, I would have to initiate a lawsuit, an expensive proposition.
Also missing from the NDA is any benefit to me. There is no guarantee of work; there is no payment in exchange for my signature; there is no reciprocal agreement that the company will not disclose my trade secrets. What is usually said is that they cannot hire me without the NDA, but that is not the same as saying they will hire me if I sign the NDA. And there is certainly nothing in the NDA that says that should they hire me, they will pay what I consider a reasonable rate. The NDAs are decidedly one-sided.
I have certain rules by which I conduct my business. First, any disputes have to be settled in the American judicial system under American law. I am an American editor with an office in America.
Second, I will not sign any agreement that gives the company the right to execute documents of any type in my name. I have no idea who these people are. My signature is one of the most valuable things I own; giving it away seems to me not to be a smart idea.
Third, I will not sign broad agreements. Agreements must be specific and limited. All of the NDAs are written for consultants who are going to come to the company and examine its books and procedures and make recommendations and improvements or who are being hired to create something specific to improve the company’s workflow. I’m not doing anything even remotely close to that. I edit books. I have no idea what the contract terms are between the companies I work for and their company or author clients. I make sure sentences end with punctuation and that flippant is spelled correctly. I don’t determine whether a book is worthy of publication or how many units to print or how large the marketing budget should be or whether the book should be digitized or anything else that remotely could be called a trade secret by a reasonable person. Thus the danger of these broad clauses and why extraneous/inappropriate clauses must be stripped from the agreement.
Fourth, I will not sign a contract that is so one-sided that it should be titled “Certificate of Indenture.” I must get something in return, something much more than a future promise of possibly some work. I will offer to sign an NDA for a specific project with the NDA limited to the specific project.
Fifth, I will not sign an agreement that gives a company the right to lay claim to things I create, invent, or improve upon that facilitate my doing my work. I have spent, for example, many thousands of dollars developing EditTools and my (patent-pending online) Max Stylesheet. EditTools makes my work go more smoothly and quicker; the Max Stylesheet both makes it easy for multiple editors to work closely on a project and for clients to access a book’s stylesheet years after I edited it. Both are tools for my business and marketing points. Yet under the presented NDAs, the companies could lay claim to these items and could execute documents to take title to them without compensating me.
I understand the need for NDAs. Afterall, no company would like to give a consultant access to its databases to find that the consultant is selling the data to the company’s competitors. But companies need to look at who they are asking to sign NDAs and not simply have a blanket rule that requires everyone to sign one. An editor like me who has no access to company information is not really a candidate for an NDA.
More importantly, I need to carefully read and consider any agreement presented to me. What are its implications? What if something does go wrong? What if nothing goes wrong but the company sues me anyway? How important is this company’s business to me?
The bottom line is this: The company doesn’t trust me enough to give me work without signing an Orwellian NDA but expects me to trust it to do what is correct and honorable when it deals with me. A handshake will serve me, but not the company. Doesn’t sound like a very promising relationship to me.
What do you think?
An American Editor 
The only NDA I’ve evern been asked to sign was with a person acting as an editorial broker, i.e., someone connecting people whose work needed editing to people who edited. In most respects it was an overblown noncompete clause, but it was harsh and offended me. Once I understood the broker’s reasoning behind it (self-protection after having gotten badly shafted), I complied, even going so far as to inform him when I chanced upon a gig with an entity already his client. I was nice enough to inquire if working with that party constituted a breach of the agreement, whereas I simply could have done the job and never gotten caught.
My reward was a loss of work through the broker. I think that was less about me than the fact he was a sloppy businessman and never really got his act together. I suspect that somebody told him he needed an NDA because all serious businesses have them; there are many “must haves” that newbies are informed about, and it’s hard to tell which we really need until we’ve built up some experience.
The most important thing I’ve learned about written agreements is to read them carefully, negotiate any line items you don’t like, and don’t sign if you can’t get the document adjusted to mutual agreeability. It seems that the organizations most inclined to have harsh contracts are the most inclined to break them, though in reality they are often a response to having made mistakes they don’t want to make again, or a kneejerk response to having been screwed.
LikeLike
Comment by Carolyn — November 12, 2012 @ 6:40 am |
I’ve signed one NDA with an individual who wanted his book edited and was paranoid about his priceless prose somehow being compromised. I read it through very carefully and asked a friend who’s a lawyer and works in intellectual property and copyright to review it for me. One clause that seemed draconian and unnecessary; I crossed it out and initialed it, and the client was OK with the change.
I’m more likely to be asked to sign non-compete agreements, where a company that hires me to do on-call editing or proofreading doesn’t want me pitching my services directly to its clients. I make sure that I don’t commit to anything that would limit my professional activities unreasonably, affect current client relationships or keep me from acquiring new clients while working with the one asking for the agreement. Reading all the fine print and legalese is a pain in the patootie, but essential!
LikeLike
Comment by Ruth E. Thaler-Carter — November 12, 2012 @ 10:48 am |
I haven’t gotten too many NDAs. Mostly they have been part of a larger contract, and being U.S. clients, I don’t have to contend with the foreign courts issue that Rich described. I do read them all carefully before signing. Another contract bugaboo, the noncompete clause, is more troublesome for me, because (1) I would never be so unprofessional as to compete against a client by going behind their back to their contacts, and (2) if I do one job for a client who is basically a middleman for something like a huge megapublisher, it’s unreasonable (from my standpoint) for me to not market to or work for any part of the megapub for several years (time period what most noncompetes stipulate). I’ve concluded that it’s better for me not to put myself in a professional and ethical quandary, and so I choose not work for clients who require a noncompete. The first and last noncompete I signed, I negotiated from 3 yeas to 1 year, and subsequently I’ve never done any work for them because of low pay.
LikeLike
Comment by Teresa Barensfeld — November 12, 2012 @ 1:12 pm |
I have always assumed that an NDA was a ‘confidentiality agreement’, as in anything the client sends you is not to be published unless it already is. But I, too, got one that extended itself to include ‘obey the laws of the Government of India’. I had to decline, on the grounds that I might perjure myself. I explained that the clause could be removed and then I could sign, and attached links to some examples of British NDAs, but I have not heard back. Sometimes clients are just not worth the trouble.
LikeLike
Comment by amlees — November 13, 2012 @ 5:07 am |