The anatomy of NDAs: what they are and why they matter

When you have a candidate come into the office for a job interview, you probably give that person a non-disclosure agreement (NDA) to sign. You’ll most likely give an NDA to anyone who visits the company for any reason, too. But why? Why do companies need to have these documents on file? What happens to them after they’re signed? And why do we need to take them seriously?

The answer is protecting intellectual property –– yours and that of your visitors. When visitors check in to a company, you can’t control what they might see or overhear. Whether you intentionally disclose proprietary company information or not, the onus is on companies to make sure that this intellectual property stays private and in their control. 

Enter the NDA: a binding agreement that the visitor will not disclose ideas, concepts, code, and other private information to anyone else (or to use it themselves). Here’s what NDAs are, why they matter, and how they play a valuable role in ensuring your private company information stays that way. 

When sensitive company data gets out: a parable

Remember that time back in 2010, when an employee of a major device manufacturer left a smartphone in a bar? And that phone just happened to be a top-secret prototype of a model that wouldn’t be released for months? A few things happened within a couple of days: photos of that phone and all the new features became available to anyone who wanted to see, and the employee was in serious breach of non-disclosure. 

Now, because of the portability of intellectual property, companies have to be sure to protect what belongs to them. What does that entail? Iren Korkishko of Syndicode offers this advice. 

Here’s the anatomy of an NDA.

  • What is it? An NDA should spell out what constitutes confidential information, and explain what the signer is obligated to do — and for how long.
  • Who is it? The NDA contains the complete legal name of the company. The designated counter-signer has the legal rights to enter into agreements for the company.
  • What are the terms? There should be a clause to cover the company when there are organizational changes — that is, if the counter-signer leaves the company, the NDA is still valid.
  • Who’s affected? Decide whether this should be a unilateral or mutual NDA. If it’s mutual, both parties are bound by its terms.
  • What about the future? Watch out for residuals clauses. This gray area of the law deals with unaided lingering memories and any new inventions or ideas that may arise because of knowledge of confidential information. “A reasonable residual clause will allow the Recipient Party to use general concepts, while an overly broad residual clause will give the recipient use of more specific ideas,” said litigation paralegal Erica Gardner of EveryNDA.
  • What’s the law? This one may seem obvious, but make sure that the terms of your NDA comply with the country and state laws. In other words, even if you use an NDA template for your company, have a legal eye review it.
  • What if there’s a data breach? Spell out how the damages will be calculated if the signer breaks their word. Companies should know the ramifications before pursuing a case, and signers should be fully aware of the consequences.

Companies may be well-prepared for NDAs, but all of that is a lot to take in the moment a visitor walks through the door. NDAs are necessary, but they’re also time-stealers. From a hospitality and efficiency standpoint, there has to be a better way.

Zip through reception by signing NDAs and other paperwork in advance 

Most business relationships begin with a contractual agreement, and there’s always a question about the best time to present it. Emailing the documents in advance is a widespread practice. Until recently, the visitor would have to print it at home, sign it, and take photos of them, and email the photo PDFs back. 

Now that we have e-signatures, the process is a lot faster. Companies like DocuSign, for example, allow organizations to automatically send visitors any documents in need of their signature via DocuSign and send it back for countersignature securely in advance.

Better still, you can enhance the visitor experience by automatically emailing upcoming visitors the documents to sign well before the visit. Guests can access and sign the documents online, and you can process their paperwork in seconds. When hosts are notified of their guests’ arrival, front-desk personnel can be confident that everything is ready for the visit. There’s no chance of losing or misfiling the signed documents because they’re safely stored in DocuSign. All reception professionals need to do is check DocuSign to ensure all the signatures and documents are in place. Then, guests can sign in with via your visitor management system as usual. 

Faster countersign for NDAs and other legal documents 

Sometimes, a visitor’s signature is only half of the equation. To make a document mutually binding, it requires signatures from both parties, and that can take a while. However, with an NDA integration, the entire process can happen in moments: all signatures take place entirely within your secure document storage solution.

Find and retrieve documents quickly and efficiently

Getting NDAs and other materials in place is vital for all companies that need to protect trade secrets, intellectual property, confidential or proprietary information, and more. If you suspect a violation, that signed contract can be used as evidence in court, so it’s crucial to be able to pull up those signed documents on demand. 

“You have to be able to prove that you made reasonable efforts to protect the secrecy of your idea,” said Jeff Ward, director of the Start-Up Ventures Clinic at Duke Law School in an article for Entrepreneur. “Showing that you had employees and third-party vendors sign NDAs can go a long way toward demonstrating that you’ve made a reasonable effort.”

Discover more ways to protect your intellectual property and keep your company in compliance.

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