NDA: to sign or not to sign, that is the question!

Non Disclosure Agreement : to sign or not to sign

Last week, I had a bad experience: I lost an order because I refused to sign an imposed Non-Disclosure Agreement from a new translation agency. (In fact, I lost two orders, because in the meantime I turned down a new job since I had already committed to the first job. But that’s an other story…). You know the feeling? SO frustrating. Anyway, I thought I should turn it into a positive experience by sharing some of my views with you.

Over the last three years several agencies have asked me to sign Non-Disclosure Agreements. Nothing strange so far. I would even say that it’s good business practice in the translation world. EXCEPT when these contracts are drafted to their advantage and are NOT negotiable.

 Let’s have a closer look at it.

Based on my experience in a previous life (as Key Account Manager for a big American multinational), an NDA should always contain:

 1. the correct name of all parties. While this is obvious and generally done correctly, don’t forget to check.

 2. the purpose of the agreement. The scope should be as narrow and as detailed as possible.

 3. the elements (trade secrets, production methods, customers information…) and their form (email exchange, brochures, video recording etc.) that will be covered by the agreement.

 All of the above is generally done right. Now for the tricky parts.

 4. the duration of the contract. The contract is valid as from 20xx…. for one year and will automatically and tacitly be renewed each year unless otherwise agreed by the parties. (for example)

Yes, I have seen contracts that had no validity period!

To be on the safe side, it would be even better to put a date (2 or 3  years later for example) after which the contract will IN ANY CASE be reviewed to avoid committing to this secrecy agreement throughout your whole life.

 5. the duration of Non Disclosure. Generally the Non Disclosure period is the validity period of the contract + XX years (ranging from 2 up to 10 years). I never saw anything longer than 10 years even with pharmaceutical companies. The most common duration is 2 to 5 years after termination of the agreement.

 6. the termination of the contract. In the last contract I had, this item was simply not mentioned.

I would suggest something like “Termination of this agreement must be done in writing by either party with one month notice.”

7. the applicable law. While the party drafting the agreement will systematically use the law which is most advantageous (most of the time the law where its headquarters are located), I still think that it is not realistic for a freelancer to accept ANY applicable law. French law and English law are quite different in business practices. Already in my country of origin (France) and my country of residence (Belgium) there are differences and both are based on Napoleon’s code!

 LAST but not LEAST

8. Liability and fees

Take a look at the last clause formulated in the agreement I was supposed to sign last week:

“In addition to any other remedies provided by law of this Agreement, Translation Agency xxx shall have the right to obtain injunctive relief against the breach of this Agreement by Freelancer. Translation Agency xxx shall be entitled to recover from Freelancer any costs or expenses incurred in obtaining injunctive relief against breach of this Agreement by Freelancer, including without limitation legal fees and costs, at any time after the Effective Date (regardless of whether Freelancer is then still providing services to Translation Agency xxx).”

 What if the freelancer gives his computer to an IT specialist for repair and has all his content spread on the web? This occurred a few years ago to a famous Chinese actor who had compromising pictures in his hard drive and saw his files on Internet!

Is it realistic to sign such a clause to win a 400 EUR contract?

Answer from the Translation Agency:

This is a standard clause featured in many contracts, which all of our freelancers have accepted without question. As long as the agreement is not breached this should never be a problem. OF COURSE!

 I also heard: Don’t worry, trust us. Even if it is written, we never had to enforce this measure.

 Why do I have to sign then?

And you, what are your thoughts? Do not hesitate to share them. Lawyers are also welcome to comment!

PS: Big thank you to Catherine for proofreading this post.

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About Columbus Project

Bonjour, I am French. I have lived in Flemish Belgium for 16 years and I am currently relocating to Hobart (Australia). With a solid technical background as a chemical engineer, along with 15 years of commercial experience in various sales functions in a multinational company and with a constant, compelling urge for lifelong learning, I created my own company -- Columbus Project. My focus is on translations and intercultural coaching. My preferred translation fields are marketing and sales brochures, websites, chemistry and water-treatment related topics. Being extremely concerned with climate change and its associated consequences, I am looking to specialize in renewable energy techniques. I am an Internet addict, I love meeting people and I modestly aim at helping to build a better world.
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4 Responses to NDA: to sign or not to sign, that is the question!

  1. patrick plaisier says:

    Bjr Anne,
    Je viens de lire to blog. Très intéressant ton Columbus Project. Tu as cherché bien plus que moi et trouvé un chemin bien à toi.
    Good luck with the relocation in Australia !!

    Patrick Plaisier

  2. Merci infiniment Patrick pour ton commentaire qui me touche beaucoup. Ce blog se nourrira, entre autres, de mon expérience “Down Under” alors “stay tuned” et à bientôt 🙂
    Anne

  3. Re: the “without limitation” legal fees – I was having a similar discussion earlier today. It seems to me:
    a) from their point of view, it might harm their interests to place a cap on the amount, to say nothing of how to seelct the amount – €10k? If €10k, why not 15k? If 15k, why not 18k. And ainsi de suite…
    b) from your point of view, I would say it does need to be restricted in terms of scope, if placing an absolute financial cap is impossible. We English are very fond of the word “reasonable” in such cases. I’d perhaps also like to see a reference along the lines of directly incurred as a result of defending an actual or potential legal action. I’m not a lawyer, but it does seem the current wording is open to abuse.

    • Charlie, thanks a lot for leaving a comment. I am not a lawyer either but I know that in Belgium a self-employed person is responsible on his own assets. This could go as far as losing all his belongings (house, savings, etc.) in the worst case. This is why I always include the following clause when accepting an order “In all cases, the liability of COLUMBUS PROJECT shall be limited to the amount of the invoice.” Whether this is enough or would need to be backed up by an insurance is an other point, maybe a topic for a future post. Would you find this interesting?

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