An explanation of an NDA and a CA

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Q:  I am applying to several different roles.  I just graduated from college and I am unsure what it means when an employer says that I need to sign an “NDA” or a confidentiality agreement.  What is confidential about the interview process?

A:  This is a great question.  NDAs (non-disclosure agreements), also referred to as confidentiality agreements, are often used by technology, biotechnology, life sciences or medical device firms.  The goal is to protect confidential or proprietary information that the employer may share, either as part of the selection process, or upon hire.

When candidates are asked to sign an NDA during the interview process, the company representatives are often sharing confidential company information, by a hiring manager, or other company representative.  This business information extends beyond what may be shared by a placement agency or other talent acquisition professional.  In our firm, we most often see this requirement when a candidate is presented to the hiring manager.  Often the hiring manager wants to talk freely about more detailed business information.  Some examples of when an NDA may be appropriate include when a new product or technology is being developed by a company, or when an invention is being presented to an investor.  Typical exclusions from an NDA include a candidate’s current knowledge of an industry, a product or an invention.  Publicly available information (from an employer’s website, or information from a press release or media outlet.

I consulted Bob Shea, a partner, at Beck Reed Ridden LLP in Boston.  Shea works with a wide range of employers across Massachusetts.  He provides expertise to employers and employees on labor and employment matters.  Shea said he sees NDAs more commonly presented as a condition of employment, as opposed to as a condition of interviewing.  In short, when a candidate is offered a role with a company, the employer makes signing an NDA a requirement of the job.  Further, Shea explained the requirement of signing an NDA is not uncommon, even with respect to some entry-level positions.  He suggested that the prospective employee review the NDA carefully prior to accepting any offer of employment.  The agreement may “contain restrictions that go beyond simply keeping employer business information confidential.”  Shea offered, “For example, some such agreements also contain customer non-solicitation restrictions (which restrict a person’s ability to solicit their employer’s customers, post-employment) and/or non-competition restrictions (which restrict a person’s ability to work for a competing business, post-employment).”  Some NDAs also include a “no poaching” clause.  This clause prevents the recipient from soliciting (or hiring) a company’s employees for a specific period of time.  We often see this time period as 12 months.

Shea shared an update, which applies to Massachusetts, but also several other states.  “Although Massachusetts and many other states in recent years have imposed requirements and limitations on employers’ use of non-competition restrictions, legally compliant non-competition restrictions are generally enforceable when reasonably tailored to protect certain employer business interests, including its trade secrets, confidential business information, and customer goodwill.”

Shea and I both agree that it is important to review any NDA or CA carefully, before it is signed.

Pattie Hunt Sinacole is a human resources expert and works for First Beacon Group in Hopkinton, an HR consulting firm. She contributes weekly to Jobs and the Boston Sunday Globe Money & Careers section.