Personal Non-Disclosure Agreements (NDAs): What Contractors Need to Know Before Signing

Personal Non-Disclosure Agreements (NDAs): What Contractors Need to Know Before Signing

Personal Non-disclosure agreements are becoming a standard part of a contract procedure amongst the Rich & Famous, to forbid anyone working for them or on their behalf from disclosing any information regarding their relationship during the works programme (and, usually, thereafter)

There are three types – Unilateral, Bilateral and Multilateral. All three NDAs are formal written documents issued by one Party (invariably the employer or customer). A Unilateral NDA concerns an individual e.g. a Garden Designer of Landscape Contractor. Bilateral NDAs seek to bind both Parties into a situation whereby neither side discloses any information, and Multilateral if all employees working on a project are to be included. All three are usually demanded by the customer as applicable for the project.

There are several key elements to a non-disclosure agreement, the first of which is the identification of all involved Parties, with each clearly named and included in any list of individuals that are party to the NDA. The limits of the NDA , including a detailed and inclusive scope of restrictions and limited time scale, must be included and covered by the terms of Confidential Information, with the ownership of the document clearly named. All involved Parties must sign the Agreement, including date and time of signature of acceptance.

It should include exclusions or those not considered to be confidential, placing obligations and requirements of the involved Parties, any time limit on the agreement, and crucially, any consequences of any breach. Penalties may be fiscal or removal from a list of approved tenderers, (for example) depending on the nature of the property and/or personalities involved.

NDAs are legally enforceable contracts in their own right, superseding any other Terms and Conditions or Contractual documents that create a confidential relationship between a person who may have sensitive information and their employer i.e the customer. They are enforceable in the UK as long as they are not being used as a ‘Gagging Clause’ that would prevent an employee – i.e. the Designer or Contractor- from reporting serious issues such as harassment, bullying or illegal activity, to the proper authorities.

Although I am not a solicitor, nor do I have any formal legal training, after thirty years of working as an expert witness, I have been involved in several different scenarios where NDAs have been presented as a barrier or screen to protect the customer from litigation. Some even try to use the NDA as a protection against being sued for non-payment or Breach of Contract, claiming the NDA negates any previous contract documentation.

The simplest and most common form of NDA is to disallow any photographs, designs, plans or other such information from being divulged in a public arena. Similarly, mention of the name of the client, address or identifiable image of the property whereby anyone could discover the name and whereabouts of the customer may be subject to an NDA.

Some clients change as soon you start work, from sweetness and light to raging tyrants! Usually straight after you have signed the NDA. They become obsessed and deranged, either

showing their real nature, or drink and/or drugs depending on the time of day. This may sound like a gross exaggeration, but I have seen it more than once……………. Personal battles and matters outside the knowledge or control of the contractor may change the nature of a relationship once on site, with the client blaming everyone else in sight for their problems.

Where NDAs can present difficulties, is when they clash with your Standard Terms and Conditions, which will have been drawn up for ‘normal’ contracts. Once an NDA has been signed and introduced, it may be considered primary to your terms in the eyes of the client, overriding clauses and presenting caveats that may not be your advantage. Indeed, some things may be to your disadvantage, especially if working within a Multilateral NDA project.

One simple reason for this potential dislocation is that you will not know what your fellow NDA-ers have agreed to in the way of terms and working practices, allowing one to be played off against the other. Payment terms, for example, may be different between companies working on the same site, if you are working as Principal Designer or Principal Contractor. (I have seen cases where the client has paid a Principal Contractor’s sub-contractor direct as they are not VAT registered, removing the payment from the Principal Contractor’s invoicing process in order to save the tax. This can cause massive problems for the Main Contractor, who is responsible to HM Customs & Excise)

I have not yet worked out – if it is even possible – how this dislocation would work under the Construction (Design Management) Regulations 2015 system of operating on a site, if the main individual is prevented from having knowledge of any arrangements made between the customer and AN Other contractor working under the supervision of the Principal Contractor.

I will end by suggesting that you proceed with caution before signing any Non-Disclosure Agreement unless you have taken legal advice from a solicitor. Some appear straightforward, yet with a sting in the tale for the unwary.