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Confidentiality agreement stipulating 100,000€ penalty for direct or indirect disclosure
Thread poster: Barbara Thomas

Barbara Thomas
United States
Local time: 19:11
Spanish to English
+ ...
Aug 7, 2009

Hi. Today I received a confidentiality agreement that I couldn't sign. The company demanded a 100,000 € minimum payment for breach of confidentiality, whether direct or indirect. I pointed out that if I were unfortunate enough to have my computer stolen, a phisher ge through my firewall, or simply to have someone break into my office, I might unintentionally violate the clause. No matter what the consequences of the violation, I would be liable under the terms of this contract.

Any thoughts on the matter?

By the way, I believe that I agreed to abide by the professional guidelines of ProZ.com (http://www.proz.com/professional-guidelines/). Is there anything similar binding contractors?

[Edited at 2009-08-07 16:35 GMT]

I see that contractors have the same professional guidelines, but no guidance regarding non-disclosure agreements, although this is evidently covered by the professional guidelines.

[Edited at 2009-08-07 16:39 GMT]


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Burrell  Identity Verified
United Kingdom
Local time: 00:11
Member (2004)
English to Latvian
+ ...
Nice Aug 7, 2009

I would love to see those sad individuals who actually sign agreements like this. It even looks like the agency is actively scaring people off. Maybe they singled you out as a freelancer who they definitely do not want to work with? Totally ridiculous clause. You should offer them your house for opportunity to work with them as well. If this is how they start, imagine what you would have to do to get paid.

Ines

[Edited at 2009-08-07 17:53 GMT]


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Ligia Dias Costa  Identity Verified
Portugal
Local time: 00:11
Member (2008)
English to Portuguese
+ ...
Well, Aug 7, 2009

And be beaten up with a belt every Friday at 3 p.m.???

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Barbara Thomas
United States
Local time: 19:11
Spanish to English
+ ...
TOPIC STARTER
Under what circumstances might someone sign? Aug 7, 2009

I was thinking about the circumstances under which one might be tempted to sign such an agreement:

1) You have 100,000 € in cash or assets to back up your signature (actually, you have more because this is the minimum)

2) Or you have liability insurance with the necessary coverage and your broker has signed off, in writing, on the contract

What does this mean? Basically, that anyone who has signed this contract without meeting one or both of these conditions isn't signing in good faith. So what would happen if, say, the translator deliberately or inadvertently disclosed the formula for the next new miracle cure or whatever other secret has to be kept? (I mean, before the FDA/EMEA receives the documents, which is not likely).

1) Legal proceedings would start. With a little luck, arbitrage or the court case might be scheduled within the next 5 years.

2) Assuming that the translator showed up and lost the case, the company might get their money a few years later, assuming that the translator did everything necessary to allow the sentence to be executed.

Is this worth it for the privilege of signing an 800€ contract? I don't think so.

I'm not trying to be nasty, not to anyone. I just think that businesspeople should think about the contracts they send out and should stipulate realistic conditions.

In order to sign this contract, I would have to take out insurance and I certainly could never give the client the quote I gave, it would probably be 2-3 times higher. Besides, who wants an ironclad guarantee that in 10 years you'll get money back? ... clients want good translations by translators who work hard to give them what they want at a price that they can market to the client.



[Edited at 2009-08-07 19:01 GMT]

[Edited at 2009-08-07 20:06 GMT]


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Astrid Elke Witte  Identity Verified
Germany
Local time: 01:11
Member (2002)
German to English
+ ...
I believe it results from a misunderstanding on the part of the agency Aug 7, 2009

This clause about a contractual penalty of a very large sum of money is a standard clause in building contracts, in a context where it is appropriate and in line with the sums of money involved in the building project.

There are one or two agencies, every now and then, who find it somewhere - or perhaps pluck it out of a document that passes through their hands for translation (hands up who has never acquired a bright idea for running their business from a document they had to translate!), and erroneously add it to an agreement for translators to sign, perhaps to emphasise the importance of the confidentiality aspect.

What these agencies do not appear to realise is that it is out of context in a translator agreement, and not at all legally enforceable, since it is not in line with the figures involved in business transactions between agencies and translators. For this reason, it is not anything to worry about, but it would make sense to point out to the agency that it is out of context, and give them part of the above explanation, rather than sign it.

Hope this brings the problem down to size.

Astrid


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Barbara Thomas
United States
Local time: 19:11
Spanish to English
+ ...
TOPIC STARTER
Definitely true Aug 7, 2009

I agree with the point and I'm pretty sure that the clause was included without giving too much thought to it.

Nonetheless, you can't sign something like this if you're serious about contracts and the topic definitely deserves discussion, along with other topics like clients who try to tell you that you have to respect "their" multinational client. I've often been contacted by an agency when, in fact, I work for the same multinational directly and through several other agencies.


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John Fossey  Identity Verified
Canada
Local time: 19:11
Member (2008)
French to English
Did the buyer read it herself? Aug 7, 2009

I once had a contract with similarly outlandish clauses in it from a government agency. When I called the buyer to question it, she didn't know what I was talking about (it was about 50 pages of bureaucratic content). I had to point her to chapter and verse, and it turned out she had "cut and pasted" the contract from something completely different without reading it herself.

But her final comment, before agreeing to rewrite the contract was "I didn't think anyone ever read all that stuff"!! She seemed surprised when I said I had to read every word! Of course, I couldn't sign it, but neither did she have any difficulty in rewording the contract.


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DocteurPC  Identity Verified
Canada
Local time: 19:11
English to French
+ ...
Read it and if it's not satisfactory, refuse to sign it Aug 7, 2009

I have often refused to sign abusive non-disclosure agreements or similar contracts. Of course, it means reading it first and understanding it. It also means loosing the contract in most cases, but it's probably not worth it - anyone who would ask you to sign such an agreement cannot be trusted (unless, like John said, they had not read it, and just copied and pasted it from another document).

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Mohamed Mehenoun  Identity Verified
Algeria
Local time: 01:11
Member (2008)
English to French
+ ...
nice one ! Aug 8, 2009

Ligia Dias Costa wrote:

And be beaten up with a belt every Friday at 3 p.m.???


nice one !


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ViktoriaG  Identity Verified
Canada
Local time: 19:11
English to French
+ ...
Wow! New business model! Aug 8, 2009

This is really neat! I am hereby dropping translation altogether--it is boring and it is very badly paid. Instead, I am opening a new business. It is simple, really.

I buy tiny translation services from as many translators as possible, have them sign an NDA that says they owe me 100K bucks if they disclose anything at all, then go steal their computers and post their contents on the Web.

I will be a millionnaire in no time! Yaaay!


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Amy Duncan  Identity Verified
Brazil
Local time: 22:11
Portuguese to English
+ ...
No more bureaucracy for me! Aug 8, 2009

As of yesterday I have stopped working for companies that have excessive amounts of forms to fill out, agreements to sign, unreasonable NDA forms, overly zealous proofreaders, hand-slapping documents if they don't like your work, documents you are forced to sign to take a reduction in payment if the overly zealous proofreaders disagree with your style, etc., etc. ad nauseum. At this stage of the game, when I find a nice comfortable client who isn't awash in bureaucracy, I gratefully stick with them.

[Edited at 2009-08-08 14:46 GMT]


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Anna Haxen  Identity Verified
Denmark
Local time: 01:11
Member (2005)
English to Danish
+ ...
Bureaucracy is hot air anyway Oct 8, 2009

I couldn't agree with you more, Amy. Actually, in my experience, companies who send you tons of forms to print, sign, scan, email etc. usually end up sending no work or sending work they expect you to do for less than the rate they agreed to in the first place.

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Maria Tsang  Identity Verified
Local time: 01:11
German to French
+ ...
suggest a reasonable regulation of the confidentiality Oct 8, 2009

No matter what the consequences of the violation, I would be liable under the terms of this contract.

Any thoughts on the matter?


I would cross out this section of the agreement document and suggest an alternative text to replace it.


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Derek Gill Franßen  Identity Verified
Germany
Local time: 01:11
German to English
+ ...
Crazy contractual penalties... Oct 8, 2009

Astrid wrote:
There are one or two agencies, every now and then, who find it somewhere - or perhaps pluck it out of a document that passes through their hands for translation (hands up who has never acquired a bright idea for running their business from a document they had to translate!), and erroneously add it to an agreement for translators to sign, perhaps to emphasise the importance of the confidentiality aspect.


I think Astrid is right.

Maria wrote:
I would cross out this section of the agreement document and suggest an alternative text to replace it.


I also think it is sometimes worth negotiating different terms. Similar topics have come up so many times that I decided to write a short article on the subject back in 2005 (see http://www.proz.com/doc/554 ).

As I mention in my article (and it makes sense considering what Astrid mentioned), most serious clients and agencies are willing to negotiate unless they lack business savvy, which is unfortunately sometimes the case.

Good luck and good on you for reading the fine print!


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Esteban Flamini  Identity Verified
Argentina
Local time: 21:11
English to Spanish
+ ...
Is this a reasonable clause? Oct 8, 2009

By the way, what do you think of the following clause on a contract:

Unless otherwise agreed by us, you (...) shall not knowingly, for a period of two years after termination of the Contract, either directly or indirectly, on your own account or for any other person, firm or company, approach our Clients for the purpose of soliciting work, nor work for the Client in any capacity. If you are approached by our Client directly you shall alert us without delay.


(Emphasis is added.) Is this a reasonable clause? As most translators, I work for several agencies, and look forward to adding new agencies to my list at any time. How in the Earth can I know that none of my other (current and prospective) agencies will ever approach this agency's clients? Or be approached by one of this agency's client who changed their mind about to whom they want to give their jobs? What do you think?


[Edited at 2009-10-08 15:33 GMT]

[Edited at 2009-10-08 15:50 GMT]


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