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Imagine that as you walk into a job interview, before meeting the hiring manager your potential employer asks you to sign a Non-Disclosure Agreement (NDA), and at first glance, it’s a pretty onerous legal document. If you don’t sign, the interview is over, and your candidacy ends. What’s going on? What do you do?
Before going any further, please note that we’re not attorneys, and this in no way constitutes legal advice. For legal guidance, please consult an attorney.
Companies have secrets, and under certain circumstances, NDAs can be pretty common; let’s first discuss some of the reasons a company may require a confidential NDA from their job candidates. Businesses (generally) don’t go through the trouble of putting potential hires in a compromising position that may jeopardize their recruitment efforts for sport, they usually have their reasons, which may include:
Trade Secrets. A company may be working on a new product it does not want the competition or the public to know about. Perhaps it is a prototype for a new gizmo that is still a work in progress or a new proprietary technology they need to keep under wraps or risk the information falling into a competitor’s hands.
Mergers, Acquisitions, IPOs. Sometimes a company is preparing for a major transformation like a merger, acquisition, or an unannounced initial public offering. Often these types of upheavals are only known by a few C-suite-level executives and members of a Board of Directors. You might be an essential hire to help navigate these situations, enter the NDA.
Start-Ups and Venture Capital. If you’re interviewing for a position at a start-up that’s either seeking venture capital funding or is the new recipient of seed money you are, by definition, involved in an endeavor that may or may not succeed and a crucial part of that process is being the first to market. A business in its infancy must protect its interests. That may mean having potential new hires sign an NDA during the interview process so their product or business model isn’t compromised.
Insider Trading. Financial information may be revealed to you during an interview that can put you in legal jeopardy if you illegally profit from anything you learn in the interview.
Special Circumstances. If you’re interviewing for a government job that’s involved in intelligence and national security, you may be asked to sign an NDA. If you’re interviewing for a position working for a politician, high-net-worth individual, celebrity, entrepreneur, or major investor, you may be asked to sign an NDA. There are a lot of people and companies out there that want to keep things private, including whatever may come up in a job interview.
Whatever the reason for the NDA, it will typically be sprung on you when you arrive for the interview. Suddenly, you’re in a tricky legal situation and under pressure to make a quick decision. If you sign it, there are consequences for breaking the agreement. If you don’t, it’s most likely the end of the road. Don’t panic and keep the following in mind:
The NDA is the cost of admission. If you want the job, you must sign the NDA. That isn’t to say you shouldn’t read it thoroughly and ask as many questions as you need to feel comfortable giving your signature. The onus is on the company to explain, in detail, every provision of the NDA and why they are asking you to sign it. The onus is on you to honor the agreement if you decide to sign it – and there is no obligation to sign it. If you aren’t comfortable signing an NDA then it’s time to say, “thank you,” and find somewhere else to work.
Keep in mind that an NDA is a legal document. Companies are interested in protecting themselves, and they likely have more resources than you do to enforce these protections – and if you run afoul of the NDA, their lawyers will. Read the fine print.
Ask for a copy. If you sign an NDA, request a copy. You never know when you’ll need it, and you’ll want to make sure you remember what you agreed to.
If you want to familiarize yourself with a standard “Employee NDA” (even though you are not yet an employee the basic provisions will be the same for potential new hires), you can find a sample NDA here.
Philip Roufail contributed to this article.
Scott Singer is the President and Founder of Insider Career Strategies Resume Writing & Career Coaching, a firm dedicated to guiding job seekers and companies through the job search and hiring process. Insider Career Strategies provides resume writing, LinkedIn profile development, career coaching services, and outplacement services. You can email Scott Singer at scott.singer@insidercs.com, or via the website, www.insidercs.com.
