I am signing an NDA what to look out for

January 23, 2004 11:07 AM

My employer is going to be asking me to sign a new NDA in the near future. The original NDA that I signed nine years ago has a lot of holes. Anything in particular I should look out for in the new NDA? Should I be concerned about it at all? (Yeah, I know YANAL.)
posted by maurice to work & money (11 comments total)

Yeah, iANAL ... The biggest thing is intellectual property rights. They should have no right to inventions or ideas that you come up with *on your own time* that are *unrelated to the company's business*.
posted by SpecialK at 11:30 AM on January 23, 2004

Generally speaking, I would be concerned about anything (above and beyond normal legal standards) that limits what I can say or do. Is this strictly an NDA or is it also a non-compete?

For one thing, though, you should look for something in return. As the 1Ls will tell you, a valid contract requires offer, acceptance, and consideration. You need consideration.
posted by subgenius at 11:32 AM on January 23, 2004

Haven't seen it yet, subgenius, but I expect this will be both an NDA and a non-compete.
posted by maurice at 11:39 AM on January 23, 2004

The term "NDA" seems to get abused a bit. If it's simply about nondisclosure, you need only concern yourself with its scope and terms, as well as noting under which circumstances it no longer applies. But "NDA" is occasionally used to mean "employment contract specifying nondisclosure, noncompetition, and assignment of certain rights such as copyright and patent," and that is a lot hairier. If there's a lot of stuff in there about things other than simple nondisclosure related to your work, either bring in a lawyer or at least negotiate.
posted by majick at 11:40 AM on January 23, 2004

subg (or anyone else): would "not being fired" constitute consideration?
posted by DevilsAdvocate at 11:40 AM on January 23, 2004

I'm very much not a lawyer, but "not being fired" sounds more like coercion than consideration to a layman like me.
posted by majick at 11:49 AM on January 23, 2004

DevilsAdvocate - I would probably say no, because a tenant of contract law (IANAL) is that you cannot sign a contract under "duress." I think the threat of being fired might fall under duress.
posted by plemeljr at 11:50 AM on January 23, 2004

Also, the noncompete portions are sometimes drafted way too broadly, in such a way as to limit your ability to make a living after you leave the company (this was the case with my former employer). Fortunately, these portions are pretty much legally unenforceable.

Check with a lawyer, but the non-compete stuff is not usually much of a worry as long as you don't intend to take your employer's intellectual property and use it to compete with them or (more importantly) take along some clients when you leave.
posted by lackutrol at 1:19 PM on January 23, 2004

A typical NDA should prevent you disclosing trade secrets or company practices. It should define what it means by "secrets". It should not contain non-compete language, and it should not apply to anything you knew before you started the job, or anything not directly related to the company's business. It should have a time limit. (The five years in this sample seems awfully long to me; especially if you're in a tech-related field, I wouldn't sign anything that extends longer than a year.)

My strategy with any sort of non-compete agreement has always been to quietly round-file it. Non-disclosure is perfectly reasonable, but it's ludicrous for a company to prevent me working for one of their competitors for any period of time -- if I leave a job, who am I going to work for but one of their competitors? I've been through it several times; only once did the company make any sort of issue out of my refusal to sign, and even in that case once it became clear that I would quit before I signed the thing, they backed down pretty easily.
posted by ook at 1:58 PM on January 23, 2004

Not to boost the income of my future profession or anything, but please do take it to a lawyer and pay for an hour of his or her time to read it over.

Anything that seems like a hard and fast rule in contract law - the offer/acceptance/consideration trifecta, for instance - is riddled with exceptions. Whatever you do, don't sign something thinking that you'll find a way to get out of it if you need to. Even if you can, being a defendant isn't cheap or much fun.
posted by PrinceValium at 3:12 PM on January 23, 2004

The worst abuses I've seen have been in the non-compete clauses. Insist that if they want to fire you, they have to provide you with severance pay equivalent to what your salary would have been for the duration of the non-compete. In other words, if they want to prevent you from making a living, then they have to pay you for it.
posted by fuzz at 8:13 PM on January 23, 2004