(Estimated reading time: 3 minutes)
As anyone who has spent any time in the modern business world knows, the non-disclosure agreement (NDA) has become a routine, almost invisible part of any discussion. Sometimes, people or firms even want you to sign an NDA before they begin talking to you!
What is an NDA?
Basically, an NDA is a contract where:
A person or company agrees to give you information.
In exchange, you agree not to tell anyone what you have learned, or to use it to compete with them.
If you do either of those things, a court will tell you to stop, and pay a fine.
That’s it. Three sentences. So why are modern NDAs so long, and with so many complications? Why are they written in “legalese” which even many lawyers don’t themselves understand?
We use NDAs because lawyers tell us that they give us security against people stealing our ideas and work. Even worse, they might use our ideas and work to compete with us. Lawyers say the NDA will prevent that.
Does that kind of thinking make sense? The obvious answer is that a promise not to tell or use information can’t really be enforced. Even if I stop using it and pay a fine, I’ve already used the material. It’s out there with my name on it. Even more so, the NDA likely doesn’t cover all possible information that I might give. It also cannot predict every possible way I could remix your work.
The truth is that there is no security in a traditional NDA and that very few NDAs are ever enforced in court. (Almost) all suits involving NDAs are settled out of court. “Settling out of court” is another term for… talking it out. A traditional NDA only gives the illusion of security.
If that is the case, why not create real security? Security is based on creating the framework for talking it out while holding onto our values and keeping sight of the vision that brought us together in the first place.
A knowledge sharing agreement (which replaces the traditional NDA) like that has 4 parts:
A declaration of the vision and values driving the relationship.
What information is going to be revealed? This part could also contain ideas about when information could be passed on without discussion. This is called a license and is a common tool in working with the flow of ideas.
A way of talking about passing that information onwards - or not.
Finally - a binding promise not to go to court before talking it out.
It is also written in plain language. Anyone who reads it can understand exactly what it says. Everyone understands their role.
What could such a document look like? I’m attaching a silly example between C. Monster, (who knows the best chocolate chip cookie recipe in the world) and Keebler Elf (who has the capacity to bake 1000 cookies per day in their treehouse kitchen). This is a binding, legally enforceable document, which can take the place of a “legacy” NDA.
Note that this agreement has neither a list of “what-ifs” or sanctions if confidentiality is broken. Rather, it contains a binding obligation to talk about the situation (hopefully before it is irreversible) and guidelines for having that talk (I have intentionally left that part out, as it is individually tailored). It is also written in plain language (as mentioned above) that even a Muppet or elf can understand, because it is a living document for them (and not their lawyers) to use if conflict arises:
Knowledge Sharing (legacy heading: License and NDA)
between C. Monster and Keebler Elf
Part One - the Touchstone
Purpose: C is for cookie. That’s good enough for me.
Vision: C. and Elf envision a world without hunger or sadness.
Mission: to bring happiness and fullness to customers by producing the tastiest, softest, highest quality chocolate chip cookie in the world. C. and Elf have come together because C. has the best recipe, and Elf has the capacity to produce enough cookies to save the world!
Guiding principles: In their work together, C. and Elf will be guided by the following principles at all times:
Collaboration over Market Share - we make our decisions together
Quality over Quantity - we are committed to always putting quality before profit;
Sustainability over Cost - we will use only carbon-neutral technologies wherever these exist
Taste over Cost Savings - our other commitments will never come at the expense of our tasty cookie.
(...and so on. They could put in any other guiding principle they wanted...)
Part Two - entrusting knowledge
🍪C. has received a recipe for chocolate cookies handed down through the Monster family for generations. They want to be able to profit from this recipe but even more so, they want to preserve their family’s traditions, and to make sure the family name is always identified with the best cookies in the world. On the other hand, they know they could never bake enough cookies to spread the joy.
🍪Elf knows how to bake as many cookies as you could ever want. The Keebler name is known for having its own ways of producing lots of high quality cookies, and that reputation goes far beyond any one type of cookie. However, baking a second-rate cookie would hurt every part of this business which supports a community of lots of elves (the actual number is secret).
🍪C and Elf agree that C will reveal the recipe to Elf, and Elf will produce cookies, which they both will market together using Elf’s distribution channels and with both C and Elf as brand ambassadors. Elf will not reveal the full recipe to anyone else, including his coworkers, and C will not reveal Elf’s process or capacity.
🍪Mutual License: C. and Elf will also be able to market an amount of up to 10% of the total production each under their own brand, on the condition that they give credit on the packaging to each other in a prominent place.
(...and so forth…)
Part Three - Addressing Change and Embracing Disagreement (ACED)
If either C. or Elf ever become aware that the limits on sharing their knowledge as mentioned above do not suit them for any reason, or that they feel the other is not keeping their secrets, they will send a text to the other with the message “My cookie is crumbling” and three suggested dates for a meeting. Both C. and Elf hope that this will take place before irreversible steps are taken unilaterally, but even if they have already been taken, an ACED conversation may be called.
At the meeting, C. and Elf will both read parts one and two above aloud, and then each enjoy a cookie with milk in silence (except for possible noises of appreciation), before starting to talk about the situation.
(Here will be instructions for ways to talk about the change. It might be Restorative Circles questions, NVC principles, or other forms of collaborative communication.)
If they cannot agree on the way forward, they can agree to take a break and talk again at an agreed time; if after two attempts they still can’t agree, they will jointly ask Papa Smurf (who is neither a Muppet nor a Keebler elf but is very wise) to mediate the subject.
If mediation fails, they can try to end the dispute through the courts, but both realize that they will likely never speak again after the court case, and the cookies may be lost to the world, forever.
Part Four - (Non-) Resort to litigation
C. and Elf commit to go through the entire process in Part Three above before submitting any action or lawsuit in the courts, and failure to do so will be sufficient grounds for the Court to dismiss the action at least until this condition has been met.