I know this blog has a big audience of fellow freelance designers. Here is my attitude towards NDAs, non-disclosure agreements, that many clients want me to sign.
NDAs especially come up in conversations with long-distance clients. In the absence of face to face meetings, people are looking for reassurance that the other person is OK. As the project gets underway, trust starts to build and NDAs are usually not brought up anymore.
VCs typically do not sign NDAs, and they see a lot of competing companies, share documents freely internally among partners, and probably forget in coffee chats where they heard what exactly, and whether it is confidential or not. But, they have a position of power: meeting with NDA, or no meeting, you pick.
Sometimes there are actually valid reasons for having an NDA in place. If you file for a provisional patent and your “art” was out there without NDA protection, you cannot claim your status as inventor anymore. Startups might want to prove to their investors that their IP is really theirs, and some obscure subcontractor cannot claim it later. Big corporations might have very strict policies for sensitive financial information.
I am not sure how many NDAs actually ended up in court. It is a big hassle, expensive, and usually there is not much to collect from an independent freelancer. The biggest cost to a freelancer is actually reputation. So maybe the threat in an NDA should not be confiscation of all your assets, but a 20 second television ad with your name being shamed on prime TV: that is pretty much the end of your freelance career.
So what to watch out for:
- Sign NDAs only when there is an actual project. Ask your prospective client to enable you to write a project proposal without seeing confidential information. Most of the times you don’t need it. Or use a video conference with screen sharing instead of having emailed documents that sit on your hard drive.
- The most important advice: sign NDAs that are capped in time, usually for a couple of years. As a designer you sign a lot of these, and you don’t want open ended legal exposure by the time you retire and you have all forgotten about past agreements. Yes, that means that you are legally free to publish all your confidential client work on the Internet after 3 years, but 1) the information will be outdated by then and of little value, and 2) your reputation as a designer is pretty much done when you do that. Watch out for sneaky clauses that say that things like that the obligations in this contract survive the termination date, or this contract last until you give formal notice. You will forget, so if you cannot get this paragraph out, give formal notice that you end the contract in 2 months the moment you sign it.
- I don’t sign non-competes. Confidentiality is protected by the NDA, so there is no need for another layer of protection. Definitions of what makes a competitor are vague, and it becomes impossible to trace and remember who you can work for or not.
- Most NDAs are written for a software developer full of clauses that are not relevant for a presentation designer, insist on taking the useless stuff out. “Hey, it is not relevant for you anyway, so what is the problem signing it?” Make that: “It is not relevant, so let’s take it out”.
- Part of the above is IP, intellectual property. Yes, if you are a software developer for hire, you need to sign over the inventions you make to your client. But as a designer, you could interpret that a clause that prevents you from re-using the IP means that you cannot use the concept for a chart (not the content) for another client. Nobody will sue you, but still.
- Make sure that there are no things you have to remember in the contract. For example a requirement to complete wipe your hard drive and burn any document you received might easily be forgotten, which puts you in breach of contract. Instead, add to the clause that you will do all of this, if the company asks you to do it. Nobody ever has in my case.
- Check the jurisdiction. If both you and your client are in Tel Aviv, it is expensive and complicated to use NY state law.
So, here you. The most important advice, insist on the time cap. Even in case you signed something bad, it will all be gone after a few years.