The True Power of NDAs
Once, Non-Disclosure Agreements Seemed Like a Smart Way for Businesses to Protect Their Company’s Innovation Secrets. Today, the Simple Signage of One Could Have Ripple Effects on the Remainder of your Professional Career.
A few years ago, the term “NDA” would have brought about odd looks, as most had never heard of one. Non-disclosure agreements have gotten a lot of attention recently, in most cases regarding sexual harassment. However, NDAs are likely to become even more popular and their topics more diverse. Traditionally, this agreement was meant more to protect company secrets on innovation and prevent formulas or other items getting to the competition. Today, they have much more meaning.
Cultural Times With NDAs
The 2019 film “Bombshell” is centered around an NDA. One of the movie’s protagonists, Gretchen Carlson (played by Nicole Kidman), a Fox News anchor, signs an NDA for an exchange of $20 million. In real life, Carlson was recently interviewed and states that she is forbidden to discuss her time at the network. She explains that when you sign an NDA, you are essentially locking yourself out of your desired profession for life. Yet, I suppose if most of us got $20 million, we would walk away happy.
Non-disclosure agreements may not be exactly what they purport to be but they can still have the desired effect. I know because I know people who have sat in a boardroom with a lawyer who pushed a manila folder across the table containing a prepared NDA with a large check.
I have some knowledge with what it means to sign an NDA. The words of Gretchen Carlson ring true, “Sign it and you essentially kiss being employed by any other corporation goodbye.” Understanding this, the person I know that was issued the NDA rejected the offer. This person countered with a request. The reason being that they knew time was needed to build a new career.
The future scenarios were clear to these individuals. Interviewing for a similar position would result in job applications and references. They would certainly call past employers. The reply of “We are prohibited by law to talk about that person” is a terrible response and would put doubt in anyone’s mind. Your response to questions regarding the company must be the same. They are bound to think, “What did this person do that no one can talk about it?” Why would an employer take that chance? The simple answer is they won’t.
The person issued the NDA applied to a new and similar group; an application was submitted and listed the required previous employers. The interviewer informed the applicant she did not get a flattering review from the expected group. However, the applicant had the opportunity to explain. That conversation lasted less than 30 seconds and she heard out this person’s side. In turn, this person was hired. The ironic thing is that not signing that NDA worked to their advantage. The newly hired individual had been able to stay in the profession they worked to reach. It was important to this person to stay on a career path.
I write this as a warning to others as NDAs have started to become a routine exit package by large companies for all terminated employees. Today, they are not just about trade secrets or sexual harassment issues but so much more. The choice to sign the NDA is up to you. I would recommend that you think about it before just running off with their offer. Why do they want it signed? How hard will they push back on you for off-the-cuff or incidental comments? Try asking for a positive referral letter dated after the NDA date.
Deciding Your Future
It is likely if you are in this scenario, the common advice will be to talk to a lawyer. That is great for legal advice but they will not know your career aspirations, your resources and if you have a passion for your work. Only you know that. I would use history as the best indicator on the decision of whether or not to sign that NDA sitting in front of you. I witnessed a few employees who signed NDAs and we never saw or heard from them again. These are tough decisions and should be made with those that you trust. Family and friends who know you can sometimes be a more useful tool than a lawyer regarding a life-altering decision, like signing an NDA.