Eternal NDAs and Why We Don't Like Them Eternal NDAs and Why We Don't Like Them

August 28, 2012   |   Business
Agile League

Sometimes our clients will ask us to sign unbounded NDAs. On cursory glance, it seems like a reasonable request: We’re going to tell you secrets, and we never want you to disclose them. However, we usually push back on these requests, and I’m afraid that it makes us look untrustworthy. The truth is that we dislike perpetual NDAs because they can severely restrict our future business.
First and foremost, we treat all customer financial and business information as confidential in perpetuity. Unless required by law, we would never reveal clients’ financials, customer lists, proprietary algorithms, or other sensitive business information. It would be a huge breach of client trust, and that’s just not who we are.
Where things get tricky is the world of vague ideas. We work with a lot of startups who are constantly pivoting and adapting their business to match new opportunities. We thrive in that kind of chaotic environment and love being part of the shaping of a new business. We want to help these fledgling startups define their business model and pursue the best sources of growth. This may involve brainstorming a lot of potential ideas, all of which we consider confidential and protected. That’s why our standard contract includes an NDA, with a three year expiration.
By the time the three year NDA expires, the client will most likely be focusing on just one or two main core competencies, possibly completely unrelated to the original ideas presented. All the other ideas and plans have long been discarded, never to be looked at again. For us at The Agile League, we’re now free to engage with other clients who may wish to pursue something similar to those discarded ideas. We can safely work with these clients, knowing that we’ve fulfilled our legal and ethical duties under the NDA. The original client loses nothing, and we get to work with the new client to create something great. Everybody wins.
This is also why we generally refuse to sign NDAs unless they’re part of an overall contract. We simply cannot afford to exclude ourselves from potential future endeavors just for the opportunity to talk to someone about their idea. If that potential client decides to go with someone else, or more likely, drops the idea altogether, we’re still bound to the NDA. That’s much too great a risk for us to assume just to have a simple chat over coffee.
We take client confidentiality very seriously, which is why it’s part of our standard contract. At the same time, The Agile League deals in the business of ideas. If we continually wall ourselves off from great ideas, eventually we’ll exclude ourselves from ever being able to work with anyone. If you’re considering working with us, think of it this way: The only way we can work with you is if we’re free to discuss your business. If we signed a perpetual NDA several years back with a company who has long since changed their business model, we would have to decline to work with you. Nobody wins in that scenario. Only by avoiding such permanent entanglements can we continue to be a resource to our clients for years to come.