It's reasonable to allow them for certain positions, such as executives. Since NDAs aren't perfect and certain knowledge can and will be transferred. But only very high level positions should ever be subject to them.
They are completely standard in corporations. Once you have hundreds or thousands of employees, NDAs are the way you work, because you just have too many trade secrets to risk.
For individuals with ideas? I agree, they're non-standard.
Yet another case where NDAs are abused to cover-up corporate misdeeds. I think their enforcability should be severely restricted. With penalties if a lawyer includes them in a contract, despite knowing they are invalid, so invalid terms can't be used to scare workers not familiar with the law.
NDAs need to be heavily restricted, but it's a difficult distinction to draw between "trade secrets of the job" (which arguably should be protected) and "abusive working conditions" (which should not)
The thing is, they're used by companies as a way of trying to stop their competitors from getting access to insider information even when it wouldn't qualify as a trade secret and would be difficult to protect with an NDA. Which is insane, because they only hire you for your experience and skills, which came from doing similar jobs for other employers, and yet they somehow expect to own any new experience you gain while working for them.
thanks, it did not occur to me that they might be able to make use of NDAs in this way (forcing me to document everything discussed in case of legal action), I guess this brings up a fundamental question on where the line is between company proprietary/protected knowledge, and then knowledge/expertise one builds up over many years working on and becoming an expert in a niche area?
Honestly, if they're willing to put this clause in there in the first place, it's unlikely that they'd be willing to negotiate it for anyone but high-level hires. And that's iffy. They apparently have a very strong desire to keep their financial data private, so the most likely outcome would be rescinding your offer if you state that it's a deal breaker.
That said, I think it's a foolish clause for companies to try and force through even though I can see their arguments for it. It puts the employee at a distinct disadvantage, and invites future problems when the employee wants to do something with their shares and has no choice but to sue for records access. Requiring an NDA would be sufficient. Beyond damages, the stigma of being the guy who broke their NDA and leaked financial data would pretty much guarantee no startup would ever touch you with a ten-foot pole. As incentives go, it's a strong one.
I've been led to believe (through my own corporate lawyer) that NDAs are pretty much useless unless they come with a penalty clause. AFAIK here in Germany the maximum penalty is something like 20k EUR. So at the end of the day, they do seem to be pretty much useless, at least in Germany. I think they are something one can forgo altogether, for all intents and purposes. Sure, it is annoying if someone takes a concept from a presentation and creates their own startup, claiming it to be their own invention or such, but that's bound to happen one way or another given the vast diversity of personality types out there. Bottom line is I think it would be beneficial to everyone to abolish this nonsense altogether.
In Silicon Valley, the "pitch" level of nda is basically worthless and not much better than not having one at all. For this reason, anyone pitching for investment money will not be (or at least should not be) relying on any form of nda to protect anything that is truly proprietary (i.e., distinctive to that company and giving it a significant competitive advantage) and confidential, at least until negotiations reach an advanced stage and a strong comfort level is established.
That said, in almost every other context, confidentiality agreements are invaluable ways to protect competitive advantage and, indeed, if a company fails to use them, it may legally compromise the right to protect its trade secret information. That is why companies use these as a matter of course, both with employees and with contractors.
Such agreements do not protect abstract ideas (which are basically in the public domain for the most part) and do not subject the recipient to risk if the recipient had pre-existing knowledge of any information from a separate source.
Thus, the argument not to sign an nda really amounts to saying that the consultant doesn't want to be hassled with a small extra burden even while asking for the privilege of working with the company's most closely protected information. For 99% of the cases, this argument will go nowhere.
The fact that some companies that have essentially worthless information use nda's, or that nda's are sometimes abused, does nothing to change the above fundamentals.
Of course, if an nda is onerously worded, it should be negotiated (and rejected, if insisted upon) - but that does not dispense with the need of an nda that is bona fide for the needs of the situation.
NDAs are rampantly abused to hide misconduct and mistreatment and should be reigned in. It's especially an issue when there is a large power difference dynamic at play between two parties. In particular, any business that is a platform for people or businesses should be banned from using NDAs that limit speech about the platform.
You can speak, just not about privileged information. With non-competes the most honorable thing they can claim is that they don't want you taking expertise they probably helped pay for you to get (either on-the-job or otherwise) and have someone else benefit from it. But really I think most of us would agree that restricting someone's right to use their own qualifications is overly broad. A better solution to that concern would be that they pay for training, if necessary, and you pay some of it back based on how much longer you remain in their employ, similar to some relocation agreements.
Not discussing confidential material shared with you on condition of your employer with an NDA is quite similar IMO to not sharing material information about a company's health days before their public earnings call. 1st amendment rights are not absolute. I'm not allowed to engage in libel, yell "Fire!" in a crowded theater, etc. I think abiding by NDA's about internal, confidential information is analagous and helps promote real, fair competition.
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