NDA's, a good business tool

[BizDev]

I was looking for a post on NDA's to learn about the latest practices and was surprised not to see any... so decided to start a thread.
Working in the semiconductor field where innovation is king, I am used to NDA and tend to ask for an NDA very early on in a business interaction.
The main interest of course, is to protect the information exchanged and free the interaction of worries. The disadvantage is obviously the administration.
Do you use NDA ? With good or bad experiences ? Have you ever faced a breach of NDA hurting your business ?
Thank you for sharing !

[kelthereth]

Yes, I have used a Non-disclosure agreement before working for a small business. I was working as a manager for a friend of mine in his culinary art business (artistic cooking). Together we hired about 7 people to assist us for an upcoming competitive event in which we had to design unique and artsy food items that would be judged by a panel. The prize was very high (a $10,000 small business grant and a high approval rating). The people we hired were made to sign a NDA which would deter them from revealing our secret ingredients and cooking styles (which they would have full knowledge of) to anyone other than their fellow coworkers. I believe that this was necessary for the sake of our business, and it was a precautionary tool.


Two weeks before the event, my friend had come across some knowledge of a special curry dish from one of his competitors. The dish was unique indeed, as it used a certain chili pepper and coco spice that had never been combined before… This type of vital knowledge had been leaked by one of the cooking staff who decided that it was safe to include the recipe for the curry dish in his blog (which had public access)! He could not even be penalized because his boss did not think to make the employees fill out an NDA. This leak of information caused our competitor to suffer greatly. From this lesson, we made a very responsible choice.

[Chatter91]

Personally, I view NDA's as an important document when engaging new people. Now a days, there are a countless amount of people just looking for information to help themselves and to make a profit while completing as minimal work as possible. NDA's provide a company with a safegaurd in ensuring that confidential information remains confidental and is not circulated to the rest of the business community. The way I look at it, is what is the risk? You have nothing to lose from ensuring this document is completed, but everything to lose if it isn't.

I strongly recommend completing the document when dealing with a new group, whether these people are known to the company or not.

[livvi]

I also view NDAs as being very important. My sister used to run a cupcake business and one of her lovely employees gave her entire contact list - clients, suppliers etc, to an opposition company. Subsequently, they undercut her prices ridculously and she very nearly lost everything. She did wind the business up for good about 12 months later because it never really recovered and she had a hard time finding staff she felt she could trust - even with an NDA.

[tetutato]

I also view NDAs as being very important. My sister used to run a cupcake business and one of her lovely employees gave her entire contact list - clients, suppliers etc, to an opposition company. Subsequently, they undercut her prices ridculously and she very nearly lost everything. She did wind the business up for good about 12 months later because it never really recovered and she had a hard time finding staff she felt she could trust - even with an NDA.

So wait, her employee did that with an NDA in place? :O

[dexterlablab1]

Any sort of NDA and contract is very important to have. Even when it comes to business agreements amongst friends. You have to cover yourself as best you can legally or run the risk of being "taken to the cleaners" should anything go off course.

[Waynefire]

I work in Internet marketing and everything is pretty much in the open. So I do not use an NDA right now. However, I know some of my clients have used them in the past because they did not want to have any of their suppliers or other information revealed.

[dexterlablab1]

I work in Internet marketing and everything is pretty much in the open. So I do not use an NDA right now. However, I know some of my clients have used them in the past because they did not want to have any of their suppliers or other information revealed.

I can definitely get behind that. Worse case scenario without an NDA, your info can be all over the place. And with all the scams and predators out here now. Well...you get the idea.

[artifactsofmars]

Being who I am, Artifactsofmars, I have a natural bias against secrecy in general. I can certainly understand the need for keeping some information private but it does not seem to me that it stays private for long in the business world very long anyway. Someone comes out with a new gadget and a month later their competitors come out with a knock off. My own opinion is that, if you are a success of course, someone is going to copy you no matter what you do.

[dexterlablab1]

Being who I am, Artifactsofmars, I have a natural bias against secrecy in general. I can certainly understand the need for keeping some information private but it does not seem to me that it stays private for long in the business world very long anyway. Someone comes out with a new gadget and a month later their competitors come out with a knock off. My own opinion is that, if you are a success of course, someone is going to copy you no matter what you do.

I agree. But in the world we live in, people can and WILL be sued for even the smallest of things. Even something TOTALLY unimportant. NDA's are pretty much a survival necessity.