I am regularly asked by industry companies to give them feedback about a new product or service. I am occasionally asked to sign a non-disclosure agreement (NDA) prior to helping or participating in their testing. While I am generally happy to help and offer my insight, I am not going to sign a NDA to help, and I thought I would share my reasoning.
If I received a NDA, I would need to pay an attorney to review the agreement to ensure there is nothing potentially harmful to me or my business. I would need to make sure I am adequately protected and won’t get into litigation. This is an expense that I shouldn’t have to incur in order to help someone else, but it is necessary to ensure that I don’t sign something that will prevent me from writing about things I already know.
Non-disclosure agreements are always one sided. A company would like me to sign some sort of agreement to not disclose anything about what they showed me or what we discussed. This is fine, but the NDA solely benefits the company and there is absolutely no benefit to me for signing the agreement. In addition, all the risk is on me.
If someone else violates the NDA and the information becomes public, the company could think I had something to do with the revealing of private information. I have no interest to get myself involved in a situation where a company needs to investigate whether I shared something that violates a contract I signed. I don’t want to ever be put in a position where a company thinks I may have shared something I shouldn’t and end up dealing with repercussions.
Perhaps I already know some of the private information through other means, and if I mention something that is somewhat related to what I learn, perhaps the company would take issue and point to its NDA that I signed. I would never want to have to moderate myself for fear of disclosing information that could violate a contract. It would not be fun to have to think about the NDA I signed every time I write about a company or service.
Some people might say that it is unlikely a company would come after someone if they think private information is revealed. If that is the case, why do they need to insist on a non-disclosure agreement? Shouldn’t my word that I won’t tell be sufficient? Further, wouldn’t the value I add worth the risk that I divulge information that I said I wouldn’t?
I am always happy to help industry companies develop and perfect products and services I may use. If a company trusts my opinion enough to ask me to help them, they should trust that I will respect their privacy and not try to get me to sign a non-disclosure agreement that has no benefit to me.
Very sound reasoning.
I totally agree.
I use to encounter NDA’s often in the course of doing business with major corporations. And, it bothered me even though it was standard operating procedure.
But, serious money was involved.
When you are doing something for free for someone, it would be unwise to agree to a NDA.
Many of the larger, finger on the pulse companies in the industry require an NDA for any involvement with them. One side-effect of not signing an NDA limit ones ability to contract with the companies they should be rubbing shoulders with to take their own business to the next level.
GoDaddy asked me to sign an NDA for a service that lots of people are already using (probably with NDA) and is going to be public in a few weeks anyway. A what would be a free service that will make GoDaddy money.
I said no without even reading the NDA. That was actually insulting.
“I said no without even reading the NDA. That was actually insulting.”
How it is insulting without even reading the NDA?
They ask me to help them beta test and possibly make THEM some money along the way and said yes. Then I get the NDA by email.
If you don’t understand why this is insulting then I can’t explain it to you.
I wouldn’t be insulted. My guess is that is their standard operating procedure, and most people likely just sign without asking questions.
You just wrote a post that you would not sign it…
I definitely would NOT sign it but I wouldn’t be offended or insulted if they asked me to sign one.
I would simply say “no” and offer to help without signing a NDA or pass on the opportunity to give them my help.
It is the 1st time (and probably the last?) I am asked to sign an NDA to help out.
This is how I feel.
Several months ago I received a message from an industry contact about a list of domains I might be interested in but I would have to sign an NDA to have priority access to the list. I did not bother to respond.
No one signs NDAs anymore unless it involves a big payday for them.
The juice is simply not worth the squeeze. I agree with you 100% Elliot.
Agree 100%. No will do.
Reporting bugs and suggesting ideas for no favors returned is one sided anyway.
Don’t bother anymore. Some other sucker fool can be the used try hard.
Since you didn’t sign the NDA, what was it about? 🙂
A consultant’s similar position on the subject: http://blog.jpl-consulting.com/2012/04/why-i-wont-sign-your-nda/
Thank you for sharing that link.
Did you read, what jim McNelis says:
“You missed a huge reason people require NDAs – to protect customer information. Often times, one party needs to disclose information about, or even just a customer name, and they cannot do so without an agreement such as an NDA in place. In a scenario like this, your refusal to sign an NDA would just seem silly. Just sign the thing and don’t tell people about what you hear..is it that hard?”
10 Things You Didn’t Know About Non-Disclosure Agreements
Yes, I agree completely. We are often approached by entrepreneurs who have a new product idea, but who need to partner with a manufacturer to bring the idea to life. They ask for an NDA to protect their idea from being stolen and produced without them.
I understand why they want to protect their idea, but we won’t agree, for many of the same reasons you have listed. Plus, most of the “new” ideas brought to us are ideas we’ve already had or been approached about before and have rejected anyway, for various reasons. So the ideas aren’t usually as good or as revolutionary as the entrepreneur believes. We would rather pass on the opportunity completely than have to sign an NDA.
Tx Elliot for this posting.
Very helpful practical explaination of the downsides to those signing the nda; especially relevant given the relative lack of reciprocal consideration for the time and expertise provided by the signers.
Not sure if this can help in this situation, but you can always suggest to this company/individual to create a document explaining in details his idea and sign it and timestamp it so further he may prove anteriority and ownership. The service PROOF.com can do that.
Guess what happens when a new gTLD applicant signs a NDA with a backend registry who does not get the client in the end?
Let me say this a different way: why were there so many new gTLD applications for a same string in round one?