8 reasons why I rarely sign an NDA

Now and then, somewhere along the recruitment process for a job, the recruiter will hit me with an NDA. In case you don’t know what it is, NDA stands for Non-Disclosure Agreement. It’s an agreement between two parties meant to protect confidential information they wish to share.

The first problem I have with this is that some recruiters don’t mention an NDA from the start. They just assume I’ll sign it. If I don’t want to sign it, the recruiter and I will have wasted all our time up to that point. For this reason, it only gets worse the later in the process this detail is brought to light.

A job interview should be a friendly conversation about if and how the employer and I can enter a mutually beneficial professional relationship. An NDA makes things less than friendly and mostly only gets in the way. The following are the reasons why I rarely sign one.

The language used in most NDAs is meant for lawyers. I’m sure you’ve seen the sort of text: inscrutably dense and full of legal mumbo jumbo that sometimes not even lawyers understand.

I’m not a lawyer, so this means that even if I think I understand what’s written, I may well be making a costly mistake. I never sign anything that I’m not 100% sure I fully understand.

2. Too much liability

Some NDAs almost feel like a threat instead of an agreement. They have clauses that say I will have to pay tens or hundreds of thousands of Euros in damages in case of a breach. Sometimes it’s a tiny startup that doesn’t even have a product yet and thus have no market value. Some say they will be the sole arbiters of how much damage I have caused. Some say things I’m not even sure how to describe or interpret. For example (emphasis mine):

The Parties expressly agree that that any breach or threatened breach of this Agreement will cause not only financial harm to the Disclosing Party but also irreparable harm for which monetary damages would not be sufficient remedy for any breach of this Agreement, and that in addition to all other remedies, the Disclosing Party shall be entitled to specific performance and injunctive and other equitable relief as a remedy for any such breach, and the Receiving Party further agrees to waive any requirement for the securing or posting of any bond in connection with such remedy.

How can a mere threat of breach cause as much harm as an actual breach of confidentiality? And keep in mind how easy it can be for someone to twist what someone else says and make it sound like a threat.

This is ripe for abuse and I don’t want to feel that I almost have to fear for my life if I were to accidentally reveal something.

3. Too broad

Some NDAs are too broad in what they try to cover, both in scope and reach. To start (emphasis mine):

“The term “Proprietary Information” means, to the extent previously, presently or subsequently disclosed by or for Discloser to Recipient […]”

They want to punish me if I reveal things they already told me, and they want my consent for this. If they fear I divulge their secrets, how about not telling me anything until I sign the document?

But the real problem is usually the endless list of generic things they don’t want me to disclose. I wouldn’t find it odd if it included my own name as something they didn’t want me to disclose.

For example (again, emphasis mine):

[…] all financial, business, legal and technical information of Discloser or any of its affiliates, suppliers, customers and employees (including information about research, development, operations, marketing, transactions, regulatory affairs, discoveries, inventions, methods, processes, articles, materials, algorithms, software, specifications, designs, drawings, data, strategies, plans, prospects, know-how and ideas, whether tangible or intangible, and including all copies, abstracts, summaries, analyses and other derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or that by its nature would be understood by a reasonable person to be proprietary or confidential.

Wow, I wonder if they could have included anything else in there. This particular one is even bold enough to include marketing and articles. In theory, those are things meant to be public but they are concerned that I may disclose them.

And who decides what a “reasonable person is” when the time comes to decide whether something is proprietary or confidential?

I usually take this as two possible signs:

  • the company doesn’t know what they’re doing and are trying to look more professional, or perhaps they are genuinely trying to protect their value but shooting themselves in the foot in the process, or;
  • they want a weapon they can use against me in the future.

In any case, I don’t want to sign something like this. I don’t want to fear to sneeze and get sued because the droplets I expelled may contain some sort of secret.

4. Non-compete clauses

These clauses usually state that I will not work for a competitor during a period of X years (I’ve seen it go up to 10!)

First of all, what is a competitor? Let’s imagine I sign such an agreement with Google or Microsoft. Those companies do business in almost any area you can imagine. This means I would be preventing myself from working in software engineering for that amount of time. Why would I want to do that to myself?

But this doesn’t make sense even with smaller companies. Let’s say a small startup approaches me. They want to hire me, so we sign an NDA for a job interview. In the end, we conclude we’re not a good fit and we part ways amicably, wishing each other good luck. Later, another company shows interest in hiring me. We’re a match made in heaven but they happen to have a project that may be considered a competitor to the first company. I wouldn’t be able to accept a job there.

They want to protect their ideas, I guess, but the value is in execution, not in the idea. Barring something exceptionally novel, ideas are a dime a dozen. Anyone could come up with a ton of great ideas but only a few companies are actually able to bring them to fruition. That’s not because they ferociously protected their ideas with draconian agreements. It’s because they executed them better than everyone else.

5. Non-solicitation clauses

These usually say that I will not be hired by, or try to hire any of the company’s current employees for a period of Y years (typically from 1 to 5 years).

If their employees are so dissatisfied working there that they want to leave, they should consider changing something. Companies should retain their employees by making them feel valued, not by using legal shackles. Some say it’s a way for a company to protect the investment they made in that person. I can understand that but again, they shouldn’t do it by shackling their employees. Instead, offer them retention bonuses, give them better working conditions, listen to them and make them feel valued. It’s not my fault they’re not doing these things.

As for not being hired, how am I supposed to know that someone I never met and is trying to hire me, used to work at that company I signed an NDA with? I don’t meet everyone from the company at a job interview. Sure, I can stalk them and try to find out but I don’t want to keep track of all the NDAs I sign (see more on that below). Besides, concealing that information is trivial.

But above all, I don’t want to skip a great job opportunity because of a 30-minute conversation from years before, which didn’t even lead to anything, but for which I was forced to sign an NDA.

6. I don’t want the burden

If I start signing all NDAs people ask me to, I will soon lose track of what I signed. If I wanted to make sure I wasn’t in violation any of them, I would have to keep track of every detail of every NDA I signed and keep it in mind during every conversation I had.

I don’t have time for that and even if I did, I would never want to spend it that way. Besides, it’s obviously not going to work because no one can remember that much detail.

7. There’s usually no big secret

In most job interviews, the information shared by the interviewer is not a big secret - nor should it be. The interviewer should tell me what the company does, not how they do it. I don’t need to know their secret sauce to decide whether I want to work there. Granted, sometimes it is useful or even necessary but most of the time, it’s not.

Something even more common is that there’s no secret at all. The interviewer does not reveal any secret or does not have anything secret to tell me because whatever the company does is not a secret.

This means that for most cases, there should be nothing to protect and an NDA is unnecessary. Still, they require it of me. It becomes a barrier to dialogue rather than something useful. A thorn in our newly formed relationship.

8. Unenforceable

It is my belief that a lot of NDAs are simply unenforceable, especially when they are overly broad.

Proving that I divulged confidential information can also be tricky, to say the least. I can think of dozens of ways in which I could spread that information or use it to my advantage without it ever being traced back to me.

Finally, unless a company has a legal presence in my country, it’s going to be extra hard for them to sue me if I breach the agreement, so why do they even bother?

That said, I never breached an NDA and thus, never faced legal action for doing so. This means I may be completely wrong about all this. Lots of people seem to agree with me, though. If you search the web for this topic, you will find many blog posts and articles saying the same thing.

The 6 reasons why I will consider signing an NDA:

I believe most people have good intentions when asking me to sign an NDA but are inexperienced or haven’t thought it thoroughly. Because of this and all the points above, I won’t sign most NDAs. Usually, the potential for negative consequences for me far outweighs the positive things that can come out of it.

That said, sometimes I will sign an NDA, depending on a few things:

  1. The job is of special interest to me. If it’s not something special, I won’t even bother.
  2. I am told upfront that there will be an NDA for me to sign.
  3. The information considered confidential is defined and scoped in a very clear and unambiguous way.
  4. The clause that specifies remedies and damages does not feel like a threat to bankrupt me or ruin my life.
  5. There are no restrictive clauses on my future work.
  6. There are no restrictive clauses on me hiring, or being hired by people who work at the company.

If all these check out, I will consider signing the NDA. Otherwise, it’s going to be a “thanks, but no thanks.”

Others who also oppose NDAs

As I mentioned before, many other people share this opinion that most NDAs are unnecessary, unfair, and even dangerous. Here are a few of them, in no particular order:

How about you? Do you sign NDAs? What do you think about them? Leave your thoughts and comments below.