How to Handle a Request for Confidentiality
Confidentiality sounds like it really ought to be more of an issues for doctors or lawyers, rather than freelancers. But sooner or later, most freelancers wind up with a client who wants them to sign a non-disclosure agreement or otherwise guarantee confidentiality for a project.
For certain companies, the number of projects they require NDAs on are growing: when every web designer, copywriter and other freelancer has the ability to broadcast current projects and clients on personal blogs and social networks, a little concern is understandable.
NDA Basics
Depending on where you’re based, a non-disclosure agreement can go by many names: confidentiality agreements, proprietary information agreements and secrecy agreements all amount to the same thing, subject to your local laws. No matter what title your agreement bears, though, it’s a legal contract that specifically notes knowledge or processes that a company wishes to share with you for the purposes of doing business — but doesn’t want to be widely available. By signing an NDA or similar contract, you agree to consider any information shared with you as confidential and not to discuss it with anyone besides your client — or any other individuals or companies your client says that you can work with.
If someone says something they aren’t supposed to and violates an NDA, the consequences can be a little complicated. In order to enforce an NDA, a company must take the matter to court. Even if the contract was not actually broken, we can be talking about some very expensive lawyers. That means knowing your own responsibilities under an NDA is extremely important.
A Freelancer’s Responsibilities
Most clients with an NDA will want your signature before they’ll even mention the type of project they’re working on. Assuming your client is experienced in the ways of confidentiality agreements, he or she will want to ensure that your estimate and preliminary work will be covered by the agreement, as well as the rest of the project. While you might encounter a prospective client who wants to use an NDA to protect some brilliant idea he’s come up with, you’ll probably find that most established companies are more likely to use a confidentiality agreement to protect information that they provide to you, such as data collected through the company’s past projects.
No matter what information the NDA specifies, though, there is an expectation of complete confidentiality once you’ve signed such a contract. Not only can’t you discuss those parts of a project covered by an NDA with someone else in your field, you should avoid telling your mom, your Twitter followers and anyone else you encounter. That includes even veiled comments. If you don’t like it, don’t sign the NDA: there are plenty of clients who don’t require them, after all.
The specifics of who you can talk to and what you can talk about regarding specific information should be laid out in some detail in your NDA. If you’ll need to share information with a sub-contractor, make sure that information is included before you sign. Just like any other contract, someone telling you something different than what’s written down won’t hold up in court.
I’ve heard of one case of a client asking a freelancer to sign an NDA that states the existence of the NDA itself was confidential: this seems like more of a twist thought up by a paranoid mind than something you might encounter. It’s an odd situation, but if you find yourself facing an odd situation make sure it’s not a warning sign of things to come.
Negotiating an NDA
Another NDA I came across essentially stated that I couldn’t say I worked on a particular project. If I signed the NDA, I wouldn’t be able to use the project in my portfolio or mention it on a resume. In my opinion, that sort of clause is out of line — from research I’ve done, it seems that such a clause may not hold up in all jurisdictions. If you encounter a project with a similarly strict confidentiality agreement, you do have the option of negotiating it. You can tell a client that your perfectly happy with the other terms of the project and that they’ll need to work on that clause for you.
It’s more than reasonable to expect recognition for your work. Just as it’s fair for companies to ask you to keep a lid on their proprietary information, it’s fair for you to include the finished product in your portfolio when it goes public. You can request such terms in an NDA, down to a specific date when the confidentiality clause is no longer in effect.
Lastly, if you’re worried by any terms of an NDA, it’s worth consulting a lawyer. Any confidentiality agreement is a contract and can have legal repercussions. While most freelancers aren’t in a position to run every NDA past a lawyer, it’s important to remember that only a legal professional can help you understand your specific obligations for each NDA.
Thanks for this post! I think people often forget that these things can be negotiated, and feel they’re obliged to either sign it, or miss out altogether. There is middle ground though!!
Great article
Good to know – particularly the negotiation section. Will definitely keep in mind for the future. Thanks!
Nice article, it’s important to demystify these things.
One tip when being sent NDAs is always make them BILATERAL, you want to protect your ideas and methods as much as the other side and often it’s as easy as changing a few words: “both parties agree” etc.
This is a very reasonable thing to do and I’ve never seen it refused.
Good article!
I usually charge +50-100% of my standard rate when clients ask me to sign a NDA. Specially if they are design agencies outsourcing theit work.
Thanks for the post.
I agree with Sergio, I will usually tack on a fee for NDA projects. Usually to cover the cost of having it reviewed by a lawyer. Some are written so strangely that it sounds like you can’t even talk to the company about their own project. I agree with NDAs though. Web designers can have access to some pretty sensitive information on certain projects and the clients need to protect themselves.
Good Post!
Really important post for the freelancers as it is neglected most of the times.
It really aware about legal aspects related to the work we do.
Thanks for Article!!!
Overall good post, but actually there are a lot of situations where it’s inappropriate to use something in a portfolio. That’s true in most cases of ghostwriting and a lot of business / corporate writing. I’ll give you an example:
I ghostwrite feature articles for some of my clients. They’re listed as the author, and those pieces are generally published in trade magazines and journals. When it’s ghostwritten, all rights are transferred to the client. They hire me to write so they can be published and gain industry recognition (and frankly, those trade publications wouldn’t pick them up if it weren’t that client’s name on the piece in the first place). This is extremely common in various types of marketing and PR writing. If it’s about the client getting recognition as the author, any claim of authorship on my part would be a violation of the rights I transferred to that client (which is common in ghostwriting). Sure, you can ask them to let you use it in your portfolio, but it’s their right to refuse in those cases.
Another example of an appropriate NDA forbidding you to mention work in a portfolio would be for a company / project that hasn’t launched yet. It’s not uncommon for companies hiring writers pre-launch to require NDAs forbidding any mention of the project at all. They have a right to protect what’s still a private project, and to determine when that project / site will be announced to the public. As an example of this, I have a client who has been developing a site / service for about a year now. While I’ve done a huge amount of work, none of it goes into my portfolio because that site isn’t accessible / launched to the public yet. In those cases, you’ll generally be allowed to mention it post-launch.
Every situation needs to be judged on its own merits. There’s a reason many writers charge more for ghostwritten work, and that’s precisely because you go into the project knowing you’re giving up full rights. But as professionals, writers need to be able to look at things from the client’s perspective as well as their own. If they can’t accept the need for certain types of privacy on the client’s end, they shouldn’t be pursuing that kind of project.
I kiddeth not! This story is true!
So I signed an internship contract with a non-compete agreement to do web development (I’m a technician, not a graphic designer, just so you know). After being neglected, doing free technical work, and my boss, the owner who is also my brother-in-law, talking about me to my family behind my back (and the drama that ensued), I decided this job was a bona fide waste. I quit.
According to my contract, I in formed him and was to remain his intern for 30 more days. That is, I give him 30 days notice before I quit. Then I took the blog posts I made which were the only ones getting incoming links besides my bosses spam on de.lic.ous and his Flash game called, “That’s not in the contract.” I removed them from his site.
30 days later I get an email from him asking me if I had removed them after I told him I quit. I told him no, and claimed they were mine that I can take with me. Then he told me that he was going to sue me for $100,000 (USD) and told me that the non-disclosure clause said I can’t talk about this email with anyone.
Coincidentally, my mother is a paralegal. I told me mom the first chance I got and she read the email and the contract. My sister found out (the one who is married to the brother of my boss), so did her husband, and drama ensued.
The weakling said to me, “Oh, I wasn’t serious! I was just trying to teach you because there are companies that really would go after you for that.”
This is a story of how a non-compete agreement became a non-disclosure agreement. Of course, he never learned about my personality which was his most gravest error. I’m a young male: naive and brazen. Yeah, you can see plenty of examples from both in the whole story (and yeah, there are a lot more details I left out for the sake of brevity, like why $100,000).
What you really need to watch out for are non-competition agreements. If you are building something truly unique and proprietary for this one client it makes sense, but if you are integrating a blog into a corporate site you don’t want to agree that you won’t perform the same service for someone else. In some cases the non-compete goes so far as to lock you into not doing any services for companies in a given industry for years after the project is completed.
There are a few times when this is appropriate, but you should push back because these can severely limit your ability to serve new clients.
Good staff! Thanks for the post!
This is a great article. In general, you REALLY have to watch it when signing all contracts, not just NDAs, especially with smaller companies that suffer from “founder’s syndrome” (roughly defined as a petty dictator who must have his own way 100% of the time). The terms that some paranoid companies can spring on you can be absolutely outrageous, and you *must* either negotiate out the offensive terms, or walk. And, again, any serious freelancer should have a business attorney on hand that you can run this stuff by if the need arises. (Although an attorney fee of $200+ to review a simple contract may be an unacceptable spend for small scale work that you may not even land.)
In general, I have found that the worse or more bizarre the contract terms, the less worthwhile that it is to even deal with that particular client in the first place.
A person I know of had a non compete clause with his former small employer that said he couldn’t work in the employer’s field if he left the company. The company was a tiny and a small narrow niche chip designer so that was no problem. However the company was then bought by a huge multinational giant which – since the specific field was not defined and merely the field the employer was in – expanded the meaning of the term to include any business the huge company was in since they were now the owner of that company. Well they are HUGE and so that basically encluded every computiing field in the world. He got a job with a chip making competitor and the huge acquiring multinational went after his huge new employer in court.
Take heed.
Absolutely do not sign non competes and non disclosures etc if you can help it.
By the way I beleive California just ruled that non competes are illegal under state law becuase they stifle competition.
I really really never want to sign non competes and non disclosures. IF you have to, then use your own and make sure yours limits them as much as they limit you. If it is too onerous then you can be sure they will be equally onerous when they come after you in court later. Walk away. Who needs to work for businesses that are so slow to innovate that they need to protect their business through artificial restrictions for long periods of time instead of being good?
Remember if someone has you work on a project that will become a common field in a year you may have limited your only participation in that huge new field to your little work with them. Imagine if you had signed a non compete for the burgeoning field of say the intnernet in 1980.
Put a strict end time on any non compete or non disclosure. Make sure you know the project before you start. (It’s so secret we can’t tell you what you are signing for? Really? well what field is it in etc. or I don’t want it then) Have an out that if you beleive it is not secret or in the public marketplace or they announce it later or it leaks later then the contract doesn’t apply no matter how it got out there.
One thing I have done is to say “I don’t want to work any secret parts of your project” just give me any parts of it that aren’t under non disclosure or secret. Specifically put in your own contract that if they disclose it to you they agree it’s not secret.
People will also try to snag you with “trade secrets” which they tell you during the course of your work with them even if you haven’t signed anything. Make sure you have in your contract that anything they disclose to you is not a trade secret. If they are about to tell you something that they say is secret stop them immediately. Put in your agreement that if they want to disclose a trade secret they must first get IN WRITTING from YOU that you agree that specific thing is a trade secret BEFORE they disclose it. HAve in writing that if they disclose it without your agreeement they agree it isn’t a trade secret.
The fact is there are VERY FEW THINGS not being actively worked on by multiple companies now although MANY companies think they are the only ones doing it. There are VERY few things that deserve trade secret protection and if they do they should be patented. If they can’t get a patent then it should rarely be a trade secret inmy opinion. Trade secrets and non competes are often just ways companies with no rights to what they work on try to create artificial legal rights that aren’t specifically spelled out in law.
Make sure also that client lists aren’t non disclose or non compete if any name on the list is a company with any public presence (like a website or public listing in any trade list in that area of business). Just because Exxon is on their list doesn’t mean you shouldn’t be able to work with EXXon later. Just becuase they tell you they are working with XYZ in apple computerization does’nt mean that even though you didn’t know XYZ DID apple computerization at the time but they are listed in that trade group that you shouldn’t be able to work with them. afer all you should be able to increase your client lists from research after you develop a skill in an area.
Also realize many companies use non competes and non disclosures purely to prevent you from competing with them or working for their competitors even when they have no intention of actually giving you substantial work. It’s a sucker legal play. Don’t fall for it. Put inthe contract that if they don’t pay you at least so much in total then the non compete doesn’t apply. No “sign then we fire you” agreements.
Remember having a contract with you no matter how it is worded gives them a reason to take you to court and force you to give up before court simply from cost of legals fees. If you don’t have a contract and better – specifically state in your work agreement that nothing is a trade secret or secret unless they have something in writing from you where you agree BEFORE it is disclosed to you- then they have a hard time taking you to court without the case being thrown out.
Also realize you often don’t need to know the secret parts of a project to work on it.
I always tell clients “don’t tell me the secret part”. I don’t need to know Colonel Sanders secret ckicken recipe to do a website for the company and I don’t WANT the legal liability of knowing. Therefore I just tell them “don’t tell me the recipe. Tell me the website requirements.” Often they haven’t thought of that. They usually are so sold on their “Secret” that they want to blab to everyone and you really don’t need to know. Usually too you find out it’s the same “secret” that the last company you did work for is doing .. so now what do you do? You have two non disclosures and they both are going to take you to court thinking you sold them both out? YOu’ll win but bankrupt onthe legal fees and wasted time.
Frankly more states and the federal government need to make law and court cases like California did to severly limit non compete and trade secret rules. They are way out of hand and simply create legal restriction where they shouldn’t be. either something should be patentable or not protected. that’s what patents and the limits on patents are for – to determine what society thinks should get legal protection.
If you must do a non compete make them pay you a license fee for your work for them for every year they restrict you. Tell them if you can’t resell the technology then you limit your income which they must replace with a license fee while they keep you off the market in that area.
You can’t get economies of knowledge earnings as a consultant if you can’t ever do the same type of work twice.
Lastly the writer’s comments were interesting in that she basically said her ghostwriting contract is a contract for her to never reveal the fraud about who the writer really was. It may be “common” in an industry but that doesn’t make it legal. I’ll bet someone somewhere someday will be very angry when they find they thought they were paying for writings from one person and instead received something from another person – if millions were sold then that’s millions in people wanting their money back.
Personally if I paid $20 for a book I thought had a high profile person’s special knowledge and insight and later found out it really only contained insight from an unsuccessful nobody with little inside information I would want my money back. If I found there was contract existing that covered up the fraud then you’re talking real money damages. So be careful about signing things that make you agree to misrepresent the truth. The big company’s lawyers WON’T be defending you if it goes bad. In fact they will probably try to blame you.
Great post and lots of great material in the comments as well. I signed a lot of NDA’s when I worked in the IT industry and they are all different and can be quite confining but I agree with Monke in that they should be bilateral.
i am being forced on mon morning to sign a confidentiality form stating that i will never do any work in my own time for clients of my company even though the work may not be related to the work i do for my company for example i am a plumber and build holiday lodges and site them and the owner of the holiday site got chatting to me and then asked if i was interested in painting his house at weekends so i said yes no money was exchanged but he said i could come and stay on his park free of charge for all summer as a result he asked me if i was able to help in upgrading the toilet block along with his site worker at the weekends my boss found out and has made it difficult to work with and he has give me a warning along with an ultimation is he in his right to do so he shows me up in front of the work collegues all the time do i sign the form or not any replies welcome thanks
Ok, answer me this. If someone were to sign an NDA before they were told the details of a freelance job for “privacy” reasons, and then discovered that the job itself entitled illegal acts (eg: breaching of copyright, use of stolen artwork etc) does the NDA become void? Would you legally have any right to inform the parties involved in the copyright breach?
It seems a pretty sticky situation, but surely illegal work outweighs non-disclosure?
Leigh.
We never sign NDA’s. Why? Because chances are the perspective client is trying to protect an idea that is not truly unique, one that we have seen before, one that may already exist, and one with functions/ideas that they have copied from someone else.
So let me get this right…. you want me to sign a one-sided contract that limits my business opportunities just to gather information to provide you with one of many quotes that your are soliciting for an idea that was inspired by someone/something else?
I think not.