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Yet another dubious NDA clause
Thread poster: Ines Burrell

Ines Burrell  Identity Verified
United Kingdom
Local time: 19:06
Member (2004)
English to Latvian
+ ...
Aug 6, 2009

I was just asked to fill in a questionnaire for a client I work for quite lot. They are planning on starting a new project. One of the questions in this questionnaire is:
"Should you be successful in being approved for this client you will be required to sign an NDA, agreeing to not engage in work offered by the client's competitors (this is due to the fact that as you would be translating new product launches, the client requires a high level of security from all suppliers). Do you agree to this?"
They do promise there will be a lot of work for this client however I cannot stop thinking that I might just end up doing an odd 5000 word job a month with not very good Trados discount scheme and forced to pass on better projects should they be in the same field. At the same time "client's competitors" are hardly going to get in touch with me, they would usually do that through an agency. Would that make it possible for me to take these projects? Also, I might not get any offers from the competitors at all so this might be a mute point. As you can see, I am slightly confused here so I would greatly appreciate any thoughts on this matter.

Ines


 

kimjasper  Identity Verified
Denmark
Local time: 20:06
Member (2006)
English to Danish
+ ...
I would not do it Aug 6, 2009

I cannot see the reason. The NDA should ensure that you do not disclose sensitive information. I had a marketing management role in the software industry for some years. I engaged a lot with consultants who worked for my competitors as well. Some of our business partners also had partnership with our competitors. That did not hold us back from sharing confidential information with them under NDA. We would not have had great partners and consultants if we demanded that they do not partner with competition, we would have ended up with the B team instead. It is a matter of profesisonalism and trust.

Kim


 

John Rawlins  Identity Verified
Spain
Local time: 20:06
Spanish to English
+ ...
Problem - what problem? Aug 6, 2009

If you mostly work for agencies then what is the problem? Even if you are offered work that originates from a competitor - the fact remains that your new client is an agency.

 

Kevin Fulton  Identity Verified
United States
Local time: 14:06
German to English
Ethical dilemma Aug 6, 2009

The client is asking you to sign a variant on a "non-compete" provision in the agreement.

Let's proceed on the assumption that you are an ethical translator. Once you sign this provision you cannot solicit work directly from the client's competitor. That's fair enough. You have to balance the benefits of doing business with this client against the disadvantage of having to reject work from competitors. If, for example, you do a lot of work related to electronics, an industry with a large number of competing companies, and the company asking for the NDA is [name a large multinational company], etc. you would be at a disadvantage, as such companies offer a wide variety of products, and potentially you'd miss a lot of work. If, on the other hand, the company is one of a handful of manufacturers of specialty products such as mosquito netting or microswitches for model trains, then you have little to lose. In any case, you cannot directly accept work from a competitor once you sign this NDA.

Accepting work from agencies changes the game a little. In many cases you don't know who the buyer of the translation is. It's not for you to determine the end use of the translation offered by an agency. The entity commissioning the translation could be a competitor of your direct customer, but on the other hand it might be someone who needs product information in order to make a comparison among several products.

Your customer in such cases is the agency, not the end user. Ethically this is an arm's-length transaction, as long as you don't represent to the agency that you have experience based upon specialized knowledge of the direct client's products. You cannot use this knowledge to attract business as long as the NDA is in effect.


 

Ines Burrell  Identity Verified
United Kingdom
Local time: 19:06
Member (2004)
English to Latvian
+ ...
TOPIC STARTER
Yes, I kind of thought about that Aug 6, 2009

John Rawlins wrote:

If you mostly work for agencies then what is the problem? Even if you are offered work that originates from a competitor - the fact remains that your new client is an agency.


I guess it really depends on the wording of the actual NDA which I have not seen yet.


 

Katalin Horváth McClure  Identity Verified
United States
Local time: 14:06
Member (2002)
English to Hungarian
+ ...
That's not an NDA, that's more like a non-compete clause Aug 6, 2009

1. If the end client is that paranoid, they should not engage anybody outside of their company to do those translations. (Leading high-tech companies that I know perform such translations in-house and outsource only less sensitive translations.)

2. End clients normally have an agreement with the agency, not with you. You have an agreement with the agency. I am wondering if the end client is requiring the AGENCY not to accept work from any of their competitors, and whether the agency is willing to sign such a requirement? I seriously doubt it. Agencies specializing in certain industries or fields will often engage in work for companies that are competitors. If they didn't, they would run out of business.

Therefore, I think a regular NDA should be enough. If they ask for more, they essentially requiring your services in an exclusive way, and that is only acceptable if they pay for it appropriately. They should put you on a retainer, that would compensate you for any potential business that you would have without the restriction. They would practically make you an employee and pay you a salary. That is, back to point 1.

Katalin


 

shfranke
United States
Local time: 11:06
English to Arabic
+ ...
Agree with Kevin's good comment Aug 6, 2009

Greetings to all in this thread.

I agree with, and second, Kevin's good comment [below this entry].

That proposed NDA sure reads like a (here borrowing a term) "stealth" non-compete clause.

Regards,

Stephen H. Franke
English - Arabic, Persian, and Kurdish
San Pedro, California

---------------------------------

Kevin Fulton wrote:

The client is asking you to sign a variant on a "non-compete" provision in the agreement.

Let's proceed on the assumption that you are an ethical translator. Once you sign this provision you cannot solicit work directly from the client's competitor. That's fair enough. You have to balance the benefits of doing business with this client against the disadvantage of having to reject work from competitors. If, for example, you do a lot of work related to electronics, an industry with a large number of competing companies, and the company asking for the NDA is [name a large multinational company], etc. you would be at a disadvantage, as such companies offer a wide variety of products, and potentially you'd miss a lot of work. If, on the other hand, the company is one of a handful of manufacturers of specialty products such as mosquito netting or microswitches for model trains, then you have little to lose. In any case, you cannot directly accept work from a competitor once you sign this NDA.

Accepting work from agencies changes the game a little. In many cases you don't know who the buyer of the translation is. It's not for you to determine the end use of the translation offered by an agency. The entity commissioning the translation could be a competitor of your direct customer, but on the other hand it might be someone who needs product information in order to make a comparison among several products.

Your customer in such cases is the agency, not the end user. Ethically this is an arm's-length transaction, as long as you don't represent to the agency that you have experience based upon specialized knowledge of the direct client's products. You cannot use this knowledge to attract business as long as the NDA is in effect.


 

Ines Burrell  Identity Verified
United Kingdom
Local time: 19:06
Member (2004)
English to Latvian
+ ...
TOPIC STARTER
The field is broad technical Aug 6, 2009

And the clients name will be known and I expect it to be well known. Also, similar documents normally name the big brand names so I will know who the end client will be (very rarely somebody else wants to translate instruction manuals for another company's products. So basically it looks like, for example, if the field is printing (it is not), I cannot take any jobs that have anything to do with printers, faxes, copying machines, probably photography etc. Scary...

 

John Fossey  Identity Verified
Canada
Local time: 14:06
Member (2008)
French to English
Third party Aug 6, 2009

No. Your contract should be with the agency, not their client, who is a third party. The end client can require the agency not to divulge information which comes into their possession, and they can require them to require the same of you, but as far as you are concerned, the end client is a third party. I sure would not want an end client, who is not my own client, to be telling me who I can do business with.

My usual practice in these cases is to rewrite it the way I want it and send it back. If they don't agree I will walk away, figuring that I would have run into undesirable trouble anyway and regretted it if I had gone ahead. A reasonable company will agree to reasonable changes.


 

John Rawlins  Identity Verified
Spain
Local time: 20:06
Spanish to English
+ ...
I think you worry too much Aug 6, 2009

My advice would be to sign the document and take the project. Respect the confidentiality of your work. But if a potential conflict arises through an agency then - don't ask and don't tell.

 

John Fossey  Identity Verified
Canada
Local time: 14:06
Member (2008)
French to English
Don't sign something you're not comfortable with Aug 6, 2009

John Rawlins wrote:

My advice would be to sign the document and take the project. Respect the confidentiality of your work. But if a potential conflict arises through an agency then - don't ask and don't tell.


I've been in situations where these things can come back and hit you. Don't sign something you're not comfortable with.

If a company insists on something that appears unreasonable, its usually a symptom of something else. That's why a reasonable company will agree to reasonable changes to a proposed contract.


 

xxxAdrian MM.
Local time: 20:06
French to English
+ ...
A restrictive covenant unenforceable in UK/Irish Law Aug 6, 2009

As others have pointed out and I have written before, this is a non-compete = restrictive covenant in disguise.

Good contract consideration which is normally valuable, such as a nominal - or even substantial - payment or peppercorn is required in return, in the UK, US, Oz, N.Z. and other Brit. Comm. countries, just in case you end up signing this agreement and no work comes out of it. I am afraid this does happen, in which event you will be left in a legal twilight zone with the stipulator's competitors, whether real or perceived.

Good consideration can also be 'natural love and affection' between family members, but it doesn't sound like your case.

If the law of England & Wales applies, then a restrictive covenant to be lawful - a restraint of trade is deemed unlawful - has to be reasonable in 1. subject-matter; 2. territorial scope - a worldwide restraint will be struck down by the Eng. courts and 3. length of time e.g. more than 7 years will generally be unenforceable. Arguably, at least 1 and 2 apply.

Moral of the story: if the contract is worth a lot, 'go and see a Solicitor' or CAB = Citizens' Advice Bureau.


 

Andrea Brumma
Spain
Local time: 20:06
English to German
+ ...
I did not sign it Aug 7, 2009

Hi Ines,

I was asked to sign such a clause as part of an NDA several months ago by an UK based agency. I had not worked for this agency before. I stated that I always treat all information confidentially and that of course I was willing to sign an NDA, but that I would not sign this specific clause, as it would limit my business opportunities. “Their competitors” seemed too broad a definition to me. Who do they consider “their competitors”? Everybody working in the same field? The agency did not have an answer on this question… I regularly contact possible future clients and have several clients in the field of specialization the agency required for their client, and I even wondered whether I was already working for “one of their competitors”. I asked for the client’s name (stating again that I would treat all information confidentially), but the agency wasn’t willing to give it to me without the signed NDA (with this clause), and I wasn’t willing to sign the NDA with this clause without knowing the client's name or having more information on whom they considered their competitors. The agency did not go on with the selection process for this client, but sent other project offers.

Andrea


 

Samuel Murray  Identity Verified
Netherlands
Local time: 20:06
Member (2006)
English to Afrikaans
+ ...
It's your decision Aug 7, 2009

Burrell wrote:
Should you be successful in being approved for this client you will be required to sign an NDA, agreeing to not engage in work offered by the client's competitors (this is due to the fact that as you would be translating new product launches, the client requires a high level of security from all suppliers). Do you agree to this?

They do promise there will be a lot of work...


What they promise is irrelevant and should be irrelevant to your question. I find no fault with the idea of not doing translations for a competitor of a client -- if the translator is willing to limit himself in this way, then that is his decision and it is not a bad decision either. However, there are advantages to doing work for competing clients, such as gaining a better understanding of the field, which "translates" into improved translations for both parties in future jobs. Personally I would not sign such a clause, but I don't see anything wrong with the request.


 

Ines Burrell  Identity Verified
United Kingdom
Local time: 19:06
Member (2004)
English to Latvian
+ ...
TOPIC STARTER
More info Aug 7, 2009

I have now got a bit more information and it seems that the client actually has a point (albeit in a somewhat paranoid way). The field is not automotive but if I compare it to automotive then this would be Mercedes (i.e. serious brand) and they would not want me to work, for example, for BMW, Ford, Toyota etc. directly or indirectly while I am translating for them since they are bringing in some new revolutionary ideas. I can give my notice and then work for another of these companies. I can actually see the point now.

[Edited at 2009-08-07 11:21 GMT]


 
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Yet another dubious NDA clause

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