Workable NDA with company employees

    In life, as a rule, the one who has more information succeeds more than others (c) Benjamin Disraeli

    Greetings, dear readers!

    Today I will tell you about the NDA with employees of IT companies, the problems associated with its performance, and their solutions.
    This article is written mostly for the leaders and owners of IT companies, as well as for lawyers who work there.

    I believe that it will not be harmful for company employees to familiarize themselves with the content of the article. Since they may have to sign such a contract in the future.

    Let's start with the definition:

    NDA ( Non-disclosure agreement ) - non-disclosure agreement for confidential information.
    Such a contract can be signed with any entity you trust access to confidential information.

    The main objectives of the NDA:
    The first task is to prevent the fact of disclosure of information by the employee.
    The agreement is preventive in nature, and the better the agreement is worked out, the less likely it is to disclose information.

    The second objective of the NDA is to impose sanctions on an offending employee in order to stop further disclosure of confidential information.

    The third objective of the NDA is to recover material damage that was caused by an employee of the company in connection with the disclosure of confidential information.

    Summarizing, the main tasks are :
    a) to prevent disclosure,
    b) stop the disclosure, if it has begun,
    c) punish the disclosure and compensate for the damage.

    Do our IT entrepreneurs use the NDA?

    Based on personal observations, there are four models:

    1. No NDA,
    2. "Some" NDA downloaded from the Internet,
    3. Designed by NDA lay lawyers,
    4. Designed by professional NDA lawyers.

    Why “no NDA” is bad.

    The confidential information of your company is simply not protected, and any unscrupulous or offended employee can use it and disclose it both for personal gain and for the purpose of revenge, etc.
    I have already met companies that suffered just from employees offended by managers who spread confidential information for revenge.

    Why “some kind” of NDA downloaded from the Internet is bad.

    Employees of IT companies are usually not stupid people, and even more so they know how to use Google.
    It is enough to spend about an hour and come to the conclusion that the NDA is a dummy and it is practically unrealistic to apply it to the realities of the legislation of the CIS countries. (I wrote more about NDA inoperability below)
    Once they understand this, we can assume that you do not have an NDA in the company, with all the ensuing consequences described a little higher in the article.

    Why the NDA, developed by lay lawyers, is bad.

    Non-core lawyers, or charlatans, can sell you an agreement, which in its essence is no different from “some kind” downloaded from the Internet. Which will lead to the fact that employees will understand that the NDA is not working, with all the ensuing consequences described above.

    Why developed by professional NDA lawyers is good.

    If the tool performs its functions, it is always good. This is exactly what the NDA should be.

    And now, let's get back to the realities, and try to understand what a good NDA should be.

    Standard NDA Design:

    • The parties to the agreement are designated,
    • Listed information that is confidential,
    • It is registered what is the disclosure of information,
    • Responsibility for disclosure is prescribed, usually financial - in the form of a fine,
    • The terms of the agreement are registered,
    • Applicable law to the agreement.

    Why is he inoperative?

    Fact # 1:
    The judicial system of the CIS countries does not protect the NDA in court.
    Even if you somehow get a court decision in which sanctions will be applied to the employee in the form of a fine under a non-disclosure agreement, it will be very difficult to apply the decision and actually recover the funds, since by that time, most likely, the individual will sell everything own property.

    Conclusion No. 1:
    It makes no sense to count on defense in court. Financial sanctions do not work. The employee is not in danger. NDA does not work.

    Fact # 2:
    You can determine in the agreement that it is interpreted according to the legislation, for example, Belize and all disputes are resolved in the local courts of Belize.
    But, even if you win a court there (which is at least expensive), you need to apply its decision in the homeland of an employee. And by then, he will already sell all his property to relatives.

    Conclusion No. 2:
    It makes no sense to count on defense in court. Financial sanctions are not a motivator. The employee is not in danger. NDA does not work.

    Solution: I

    propose replacing the “pressure lever” from financial sanctions with “discomfort” and introducing the following design into the classic NDA:

    If an employee violates the NDA conditions, you and the companies affiliated with you should contact the diplomatic institutions of different (your choice) states to protect their You are right and you will apply for a ban on issuing a visa to a contract violator, or a refusal of a residence permit, permanent residence.

    What will such a design give?

    It so happened that most employees of IT companies love to travel, some constantly attend various IT conferences around the world, someone plans to leave to work abroad.

    Therefore, fact No. 3 - IT people love to travel and travel abroad.

    In order to work or travel, you need a visa. And the presence of the visa itself does not guarantee that you will be allowed into the country.

    If a person received complaints to a consulate or diplomatic institution from an IT company that he was a “scoundrel” and disclosed confidential information, they would think about whether to issue a person a visa, residence permit, permanent residence or let him into the country.

    There is no 100% probability, but if, in addition to the company that is a party to the non-disclosure agreement with the employee, a couple of companies affiliated with it will submit the same notification to the consulate or diplomatic institution together with yours - the efficiency will increase significantly.

    Affiliates may be:
    a) Your second, third .... tenth company,
    b) The company of your customer,
    c) The company of your friends,

    For example, we guarantee the clients of my company to send such notifications on behalf of our group of legal companies (and they are registered with us all over the world).

    What are the advantages of such a concept: the
    head of the company receives a real lever of pressure on the employee.

    What are the disadvantages of such a concept:
    The agreement will not affect in any way those employees who do not travel and do not plan to travel abroad. (but how many are there in the IT field?)

    Case study with information disclosure:

    • X Company
    • The employee of the company “X” - Vasya

    Between “X” and Vasya was signed by the NDA in the form that I described above.
    Vasya disclosed confidential information in order to earn a considerable amount and the director of the company “X” found out about it.

    Vasya was going to permanent residence in Poland, which was confirmed by the system administrators, studying the contents of Vasya's e-mails.

    The X company was incorporated in Cyprus, and had a local office and a second company in Kiev.
    X lawyers had companies in Belize, Scotland, USA, Ukraine and Lithuania, and all companies had different names and directors.

    As a result, they sent 7 notifications to the Polish consulate stating that Vasya was a “scoundrel”.
    Vasya still walks along the streets of Kiev and did not leave for Poland.
    At the same time, he agreed to voluntarily compensate the damage in return for refuting information about him at the consular posts and terminating the NDA with him.

    From practice, among the 20+ clients who implemented such an NDA in two years, only one employee decided to violate the NDA drawn up according to the concept of “ban on traveling abroad”.
    He did not believe in his performance, or “easy” money attracted him too much.

    Summary of the article:
    Classic NDAs do not work, as the “lever of pressure” in the form of financial responsibility of the signatory is not protected through the courts.

    I suggest introducing mechanisms into your NDA with the help of which you can restrict the employee’s movement abroad - which will create discomfort for him and will be one of the levers of pressure and motivation not to disclose confidential information.

    NDA is a negative contract, and the implementation of the contract in the form in which I propose always causes discontent among company employees. But, on the other hand, in the realities of our legislation, this is a convenient and efficient legal method for protecting information.

    ps I personally came up with this concept of agreement, and when my clients asked me to sign my own NDA, I thought ... and I realized that it still works. =)


    Analyzing the comments, I decided to describe in more detail the legal model of the contract.

    1. The contract is not subject to the law of the Russian Federation, Ukraine or the Republic of Belarus. For example, in a case with Vasya, the contract was subject to the laws of Cyprus.
    2. The company will not be sued for false statements for a number of reasons:
    a) The employee himself agreed that the Company has the right to send such notifications without a court decision.
    b) The Employee will not have evidence that such letters were sent.
    c) The consulate or diplomatic institution is not obligated and will not disclose information about the sender of letters. They do not exchange data with the state. authorities and courts without sufficient justification. A sufficient basis is at least a court decision. How will the employee get it? There is no reason.
    d) The company does not establish the employee’s guilt when it lodges a complaint; legally, it only notifies a third party about the employee’s behavior.

    When classical jurisprudence does not work, you have to resort to strategic jurisprudence.
    If there are more questions in the comments, I will try to answer them in the next update to the article.

    I am very glad that the article aroused the interest of readers, and I urge you to constructive communication.

    PS I will no longer respond to comments that offend me and violate my rights.

    The author, so that employees do not disclose confidential information, you need to build normal human relations with them, and not come up with leverage. God forbid that you run the hassle of working with such doomed people like you .

    Only registered users can participate in the survey. Please come in.

    For owners of IT companies: Does your company have an NDA with employees?

    • 50.2% yes 84
    • 49.7% no 83

    For employees of IT companies: Have you signed an NDA with a company?

    • 46.2% yes 125
    • 31.1% no 84
    • 22.5% this is confidential information 61

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