Non disclosure agreements: For better or for worse?


Recently Google faced an important lawsuit in regard to pay and conditions of their employees. Employees anonymously compared salaries and benefits in a spreadsheet which enabled female employees to discover they were being paid significantly less than their male peers. This lack of transparency cost Google millions in back-payments and bringing contracts up to match a standard of equality. As a result, we can draw the conclusion that the usual culture of keeping salaries and working conditions private doesn’t benefit employees, only the companies that employ them., for example, has developed an extremely successful business model around just this fact: to provide anonymous reviews made by employees for job seekers.


Pay contracts vs Non-Disclosure Agreements

A similar business concept to transparency in pay contracts is the privacy with which Non-Disclosure Agreements (NDAs) are conducted. These binding agreements are made to protect company interests from being disclosed to competitor parties by their employees.  But what about the employees who make these NDAs? How can the conditions of an NDA advantage or disadvantage the employees who uphold them?


Employer benefits

The benefits to employers of NDAs are obvious: they protect the company’s share of the market. The profit margin can be effectively retained by keeping competitors out of the loop of development processes utilised in production.  Disclosure agreement also guarantees a return on investment for research and development costs. Without NDA’s, research and development become a costly process which does not offer any competitive advantage, as the process will be readily available to all involved in that same field of the market.


The problem with Non-Disclosure Agreements

However, due to the nature of non-disclosure agreements,  they also cause problems for employees. If there is a problem with a particular software of process involved in production,  the employee, be they an engineer, scientist, or project manager, may not be able to easily find a solution. This could be costly in terms of hours of productivity lost  as a result of information not being publicly available, leading to that employee having to “reinvent the wheel”.


The verdict on NDAs for employees

On balance, however, this unique situation forces that employee to use creativity and experience to come up with a novel work-around to the problem at hand. This is why retention of these talented and experienced staff is so important in the workplace, and employers should take many measures to ensure their continued loyalty. In addition,  this forced creativity causes further innovation, exploration and company development, which should always be encouraged.


A company: an organism made up of its individual employees

There is no doubt that there is a massive incentive for a business to protect their share of the market with a Non-Disclosure agreement . Ultimately, however, a business is made up of its employees and therefore the overarching incentives of the business should matter to each and every employee to ensure their ongoing happiness and job security. It appears the non-disclosure agreements are different to pay contracts in this way.  You should feel secure in the use of Non-Disclosure Agreements to protect your share of the market and not impact the overall happiness and productivity of your employees.

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