Are you recruiting for a role that is a sensitive or tactical replacement, or confidential for commercial reasons?. As we all know, in the process of an appointment, you may need to discuss certain details with a candidate and therefore an NDA maybe required.
An NDA will seek to restrict disclosure of confidential information that may possibly cause damage to your plans if inadvertently released.
How NDA works when you’re headhunting
There are two types of NDA—one way and mutual. A one-way NDA is used if only one party is disclosing information. In some cases, a one-way NDA may need to be executed as a deed.
On the other hand, a mutual NDA is when both parties will be disclosing information. An organisation and its employees can settle for a mutual NDA to protect each other’s information.
As a business leader of an organisation, it often the business/employer who issues an NDA which is then channelled through the executive search business for candidate agreement or signature. That said, it’s crucial to decide on what your NDA must cover. A bespoke executive search service should be able to guide you on this.
Keep in mind that your NDA could only protect the information that’s discussed during the interview, not information that is publically available. When drafting a good NDA, one tip is to restrict the use of information and ideas to a specific purpose. That said, you need to specify that purpose in your draft. You don’t need to have all the details in there right away because if anything comes up, you can always widen the permitted purpose.
Moreover, your NDA must include a period of how long confidentiality is effective. Usually, the most common confidentiality limit is between three to five years. However, some information can be set to confidentiality forever, such as lists of clients, non-patentable know-how, and personal information of the individuals involved in the project.
Here are the key elements of an NDA:
- Identification of parties involved – This includes the descriptions of people or organisation included in the agreement.
- Meaning of confidential information – The NDA must include the definition of what is considered to be confidential.
- Scope of confidentiality obligation by the recipient – This describes the entire scope of the confidentiality obligation of the employee or candidate.
- Confidential treatment exclusions – The exclusions from confidentiality treatment are information that is already known to the employee or information that has been disclosed to the employee by another party who isn’t bound by an NDA.
NDAs have always been a useful tool for employers to protect their organisation’s reputation, trade secrets or indeed commercial plans. However, one must keep in mind that despite the existence of an NDA, it doesn’t necessarily avoid confidential information from being released, it more so serves as a deterrent from doing so. Therefore, employers must be aware of that risk before they get into NDAs.
For the employees’ side, it’s crucial to read the fine print of an NDA before you sign. We’ve seen many employees who mindlessly sign an NDA only to be sued for breach of contract later on.
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