Non-Disclosure Agreements & Your Business

“Loose Lips Sink Ships” started as an expression to sensitize the public to the risks of information accidentally being shared with the enemy and putting soldiers’ lives at risk. While your negotiation may not revolve around state secrets, keeping a lid on the contents of your discussions and preserving your competitive advantages is important to your business.

Non-Disclosure Agreements (NDAs) are a great way to ensure this protection. Prepared ahead of the start of your negotiation, an NDA or RNDA (reciprocal Non-Disclosure Agreement) will clarify what information can and can’t be shared with third parties as well as any specific steps each of you needs to take to protect information.

Establishing an NDA with your counterpart, and then extending it to the relationships with any third parties involved in the negotiation (that could be a lawyer, consultant or coach) can be useful as well.

An NDA document doesn’t have to be complicated, but will generally cover these main elements:

-       that neither of you will knowingly share confidential or proprietary information
-       both of you will take reasonable efforts to protect information you receive (reasonable efforts could include things like having locked filing cabinets, password protected computers and not leaving documents out in the open)
-       a commitment that if a third party approaches either of you with information that may be sensitive, you’ll let the other team know

Once you have an NDA in place, flagging documents as proprietary and/or confidential send a clear message to anyone who comes across the document that it isn’t meant to be shared far and wide. Updating your documents is as easy as inserting some text in the footer “Proprietary + Your Company Name”.

Out of the whole negotiation process, implementing an NDA may not be one of the ‘sexier’ tasks to complete, but investing the effort in doing so sets the tone for the discussions and ensures that you and your counterpart are building this relationship on solid ground.

.

Have you ever been asked to sign an NDA? Do you use them in your business currently? If you’ve received an NDA to sign, and aren’t sure if you should, reach out to someone familiar with the documents for advice – better safe than sorry!