Nondisclosure Agreements - Bullshit?

[Hue]

Yo,

So I recently was offered what appeared to be an AWESOME internship that I got from simply going up to the owner of a company, annoying him the right way, and following up via email and then phone interview.

Everything was going super peachy, and he sent me a doc of the projects we were to work on. It all looked like a fantastic experience, I was going to be paid, I had my housing covered, and I would have him professionally coaching me.

Then I got hit with an email asking me to sign a Nondisclosure Agreement (NDA) which is basically saying I can't share any ideas, products, intellectual properties, etc. to outside sources. Okay, if it's the company's idea, "sure", I thought.

Then I gave the document a more detailed look at saw the words "without limitation", being paired with the concepts mentioned above, and a statement saying that even if the idea wasn't the owner's, if I were to come across the idea/product/skill/whateverthefuck, I would be bound from using it so long as the agreement is in place and it was related to the profession. It even said that I couldn't use the skills I grew in the internship at other companies (which unless you're cementing yourself in the company, that's what the point of an internship fucking is) - not explicitly, but with the potential and open interpretation of this.

Again, I thought this was a great opportunity, so "okay, it can wait". Until I saw that the agreement was totaled to 6 YEARS.

This is just a summer internship. With I guy I've met in person twice, emailed for a week, and spoke on the phone twice with. He's an entrepreneur and highly motivated and hard working - I get that. But to want me to commit for that long, so soon? Sketchy, to say the least.

Furthermore, since sending me the NDA, he has persistently emailing and texting me to sign it so we can move forward with our projects (4 of which have been assigned to me over the next 2 weeks). That is, until I sent him an email detailing my issues with the NDA, now he's completely silent.


To my businessmen, entrepreneurs, consultants, etc.. am I just naive and inexperienced, or does this look like bullshit?


Hue

 

[Chase]

No, don't sign that. Terms are extremely, wildly unfavorable to you.

This was written for entrepreneurs, but much of it applies to anyone:

Why I Won’t Sign Your NDA

Since you're going back to school and won't have an internship or work for anyone for a year or so, I'd suggest you counter with a "Hey man, I'm really excited for this internship but can't sign a 6-year NDA that essentially makes it illegal for me to have a job after this internship. Can we make this a 1-year NDA? If we can do that, I'm good to go."

If he's not willing to make it a 1-year NDA, then the terms need to be way, way, way less vague and a lot more specific. It can't amount to "You may not have a job for the next 6 years after working here."

In all likelihood, you'd stand a fairly good chance of having an overbroad NDA thrown out in court. But it isn't guaranteed. And even if it got thrown out, simply having to worry about "Am I violating that NDA?" and "Is this guy going to sue me over nothing?" is not worth the hassle.

I don't know how important this specific internship is. I'm assuming this is a less experienced entrepreneur who does not have a lot of experience hiring.

Or he may have been wary of your approach - one thing you will see in entrepreneurship is the guys who chase you down the most aggressively for a role are also the ones most likely to try to learn your business then quit, start their own company, and replicate the business and beat you at your own game. I suspect that's the most likely thing he's trying to prevent - bringing you in, getting you heavily immersed in the business, teaching you everything, then you leave and go clone his business and keep the profits for yourself.

You might want to tell him if he's worried about that you can sign a smaller NDA and he can just give you more limited responsibilities in the business. Or you can sign a more specific NDA pledging not to start a business doing XYZ things any time in the next 4 years, and not to work for a business doing XYZ things for 2 years. Something like that.

Chase

 

[radeng]

Hey hue,

Not to argue with chase here, but I would advise to not take the advice of anyone on the internet and call a lawyer and have them review it. If it’s just a single page, they will likely do it for free or at least very cheaply and will tell you what your risks are entirely with full knowledge of the law (go to an employment and ip lawyer). I have a lawyer just for this. I cant tell you how wrongly I interpreted the legal documents on own. basically I realized that having a lawyer just for this purpose is totally worth it and no matter how smart you think you are, having a lawyer review your shit is 100% worth it and you are likely wrong about many of your assumptions.

Good luck!
Radeng

 

[Chase]

+1 to that. Lawyer is always your safest bet. Even if you think you know contract law pretty well, they do it for a living and know the things to look out for you might not realize/imagine.

-C

 

[Sandman]

Hey bro, lawyer here!

I did pretty much contracts all the year, last year. I don't know US Law. But I can take a quick look at it for you if you want.

Cheers,

 

[Hue]

Chase,

I asked around to nearly everywhere I work (all of now 5 places) and you essentially summed up what was said. Other than the comment on how my approach may have contributed to his skepticism / caution, I hadn't thought of that. Also you were correct in the assumption that the fella is a newer entrepreneur, I believe this is his second business mid-twenties.

radeng,

I absolutely agree and generally take advice or opinions on the internet with a grain of salt. One thing I like about GC is that in light of the high quality and diverse group of guys here, it's well understood among the more mature and helpful members that this is the case for internet surfers.

Sandman,

Beyond what I PM'd you there were only a few other touch-ups after speaking with counsel. I appreciate you taking the time to check it out.



I ended up negotiating with the guy on the unreasonable terms, clarifying on specifics, shortening the timelines and outright removing some sentences. He told me he respected me being transparent about my expectations, but that FYI most big places would throw away considering me if I don't agree to their terms.

Thanks all for the feedback!

Cheers,

Hue

 

[Regal Tiger]

Glad to hear that you're feeling better about the situation, but there's one thing that I wanted to point out:

He told me he respected me being transparent about my expectations, but that FYI most big places would throw away considering me if I don't agree to their terms.

Just like women say that nobody would ever respect you if you tried something so heinous as to sleep with them before date number 5...

 

[Hue]

Just like women say that nobody would ever respect you if you tried something so heinous as to sleep with them before date number 5...

True, if you can show that you're that valuable. Same dynamic.

I think for companies hiring recent graduates, most applicants are pretty replaceable, though.