People and companies hire independent contractors all the time. This could be anything from cleaning services, landscaping, web design, and anything jobs requiring a short-term contract.
That said, if the independent contractor is given access to company or personal secrets, you can use an Independent Contractor Confidentiality Agreement if you don't want that information to get out.
Confidentiality Agreements are not a novelty. They are routinely used to prevent valuable information from being shared unintentionally or intentionally. In employment contracts, for example, they can be found in the form of a clause.
An Independent Contractor Confidentiality Agreement can be introduced even if you already have an existing agreement. If new circumstances arose, you could ask the independent contractor to sign.
Depending on your state, an Independent Contractor Confidentiality Agreement may also be known as:
Any person or hiring entity concerned with potential leaks can use an Independent Contractor Confidentiality Agreement. Nowadays, most people and companies expect it and have no problem signing one.
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The Independent Contractor Confidentiality Agreement becomes valid when signed by both parties. This is enough to make it legally binding and enforceable. Notarization is not required.
After signing, the Independent Contractor Confidentiality Agreement becomes valid, and both parties should keep a physical copy of the agreement and file it somewhere safe.
There are no substantial differences between the two. It boils down to preference in most cases. However, there are subtle and rarely significant differences that are worth pointing out. The first has to do with the circumstances used. For example, Confidentiality Agreements are more common in an employer-employee relationship. And Non-Disclosure Agreements are more prevalent with vendors, suppliers, and investors. Also, Confidentiality Agreements often imply a greater degree of secrecy, to the point that a person must actively work on not disclosing the sensitive information.
An employee enters into an employment contract and receives benefits but the independent contractor does not. Also, an employer exercises more supervision over its employees, while independent contractors tend to operate with less supervision. Once again, taxation and other legal obligations are much different in that everything is a lot more relaxed for contracting. The pay can be anything acceptable, for example, without regard to minimum wage laws and such.
Confidentiality Agreements, in general, can often be challenging to enforce. Some courts will adjudge an overly restrictive Independent Contractor Confidentiality Agreement invalid. So, the key is to protect the information in question within reason.
You can't force anyone to sign anything, of course. You can explain the requirement before you hire an independent contractor, perhaps before you set the terms of the project. You may want to explain why and what that would entail. You can also highlight that you will be withdrawing your offer without a properly executed agreement. Or you can both negotiate with the help of an attorney.
NDAs exclude the following:
Non-proprietary information: Information that is not classified as a trade secret or owned by one of the parties.
Subpoenaed information: If subpoenaed by a court, a receiving party can disclose information to the authority without violating the NDA.
Public information: All information considered public knowledge.
Common knowledge: Commonly known information in the industry.
Previously known information: A receiving party is not required to protect information learned prior to the NDA.
Including a non-compete covenant with your NDA is a promise not to compete against the other party. This may be restricted to a particular market and location. This covenant is most commonly used between employers and employees, especially the star employees who might want to strike out on their own in the same industry. While this can be a separate document, you may also include it in the non-disclosure agreement
An injunction is a court order for one party to refrain from a certain act at the threat of contempt of court. As relates to a NDA, a court injunction would most commonly order one party to not disclose any relevant confidential information they are not supposed to share. The defendant who breaches a NDA may be ordered to pay monetary damage, but even before or after that, the claimant can petition the court for an injunction to order the defendant to not disclose the information or to refrain from disclosing any further.
The non-solicitation cluase is a covenant to refrain from using confidential information to poach clients or employees from the party that disclosed the information. While it can be a standalone document, the non-solicitation clause is often inserted into other contracts.
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