Internships and Non-Disclosure Agreements
What if you have to share confidential or proprietary information with the intern in order for them to finish the job? Or what if you’re in the startup phase and everything you’re doing right now is a secret so you can burst onto the scene with a magnificent bang?
Have no fear.
A Non-Disclosure/Confidentiality Agreement, usually shorten as a NDA, is just as valid when hiring an intern as it is when hiring an employer or contractor.
There are just a few things to keep in mind when asking an intern to sign a NDA agreement.
The purpose of a NDA
First of all, let’s keep in mind that the purpose of a NDA is to create a covenant between parties to maintain the confidentiality and secrecy of proprietary information.
With an internship, the intern is most likely the only Recipient of confidential information and therefore you’re compelling them to legally-bound secrecy while they’re promising to keep your proprietary information secure.
With that in mind, don’t jump the gun and make your newly hired intern sign a full-blown Non-Disclosure/Confidentiality Agreement if they won’t even be privy to any confidential information.
Remember that if you have patents, trademarks or copyrights, you’re already covered and an agreement for these things would be invalid, if not redundant.
Confidential or proprietary information are things like trade secrets, marketing plans, client lists, etc. that aren’t covered by a registration process of some kind. Anything that has economic value and gives you a competitive edge but isn’t covered otherwise.
Ask yourself if your intern will really have access to this information in the first place. If not, then the Non-Disclosure agreement may not even be necessary.
If your intern will serve as a receptionist or errand-runner, for example, then an agreement like this may be going overboard.
If your intern will be working on more sensitive projects, however, then by all means have them sign the agreement. It will protect your business when they move on and it will give them a good first taste of what it’s like to work in the real world.
What to include in your interns NDA
A properly drafted NDA agreement will explain to your intern exactly what is considered confidential information for the purposes of the agreement.
Remember, this a student, or recent graduate, who probably has no professional experience whatsoever in the corporate or business world.
Depending on your industry and their specific education, they may not have a clue what confidential information really is.
This can actually be to your advantage, though, because this gives you the opportunity to breach the subject without any preconceived notions on their end.
Just make sure that your NDA’s definition of ‘confidential‘ is specific but not so much so that it inadvertently leaves factors or details out.
Permitted use of the information will be another important factor of your interns’ agreement.
As this is likely their first experience with confidential information, make sure they understand how they’re allowed to use it. Don’t be afraid to spell it out for them because if they misunderstand, then it’s you who gets the short end of the stick.
The NDA agreement will give you recourse if they inadvertently disclose or misuse confidential information, but once the cat’s out of the bag, there’s no going back.
So, be sure the agreement’s language includes a clear provision on how they are to use the confidential information they’re being trusted with.
Methods for returning the confidential information will be critical, as well. Not all internships turn into full-time employment so there may very well come a day when your intern leaves you for good.
When that happens, you need to have provisions and a process for how the intern is to return your proprietary information.
It may be that the information never left the confines of your workspace, but with today’s global technology, that’s highly unlikely.
The intern may have a personal laptop, email, tablet or smart phones that contains documents, sketches, lists, etc.
Make sure your NDA agreement clearly defines the procedure and timeframe for returning as much of this information as possible when the time comes.
Finally, let your intern know the terms of the confidentiality.
Depending on the nature of the work, the confidential information may no longer be confidential once the intern’s project is complete – such as a product development that’s released to the public or software that get’s copyrighted once they’re done.
Other forms of proprietary information, such as recipes or algorithms, may never lose their significance. And the intern may not have a clue either way.
So make it clear to the intern from the beginning with a clause dedicated solely to this criteria.
Internship Agreement v. Confidentiality Agreement
Many major corporations make their interns sign an Internship Agreement. Within these agreements, you can almost always find a Confidentiality Clause.
There are pros and cons to approaching confidentiality this way so let’s go over them both.
First of all, I’m not here to tell you whether or not you need an Internship Agreement and that’s not our main focus here.
What I am here to tell you is that if you use one, the Confidentiality Clause won’t be nearly as in-depth as a full-blown NDA agreement.
At least not generally.
Many Internship Agreements have a simple “confidentiality” clause that reads something like this:
While this may suffice for some situations, you have to consider whether or not this brief of a clause will truly cover your proprietary interests.
Remember, a well-written Non-Disclosure/Confidentiality Agreement is, at the very least, a full page long, especially if you’re going to include all of the details mentioned earlier.
A “confidentiality” clause of this length may leave you vulnerable in many regards, unless you cover your bases elsewhere in the Internship Agreement.
Other Internship Agreements take a more thorough approach and include more lengthy and detailed clauses on confidentiality. This one, for example, goes on like this for five more paragraphs, covering nearly every important detail discussed earlier, and then some.
A five paragraph clause like above may not be necessary, either, but the point is that if you’re going to include your confidentiality/non-disclosure or non-use policies within the Internship Agreement, don’t cut corners or make confidentiality an afterthought in your umbrella Internship Agreement.
Your policy on protecting confidential information should be carefully crafted whether it’s part of a larger agreement or not.
Your other option is to draft an Intern Agreement as well as a separate NDA agreement. They need not be redundant or overlapping, but it may be the best way to get your intern all of the ‘at-will internship’ and other such details while still fully protecting your proprietary information and emphasizing to the intern that their confidentiality is of the utmost importance.
Another way to look at this may be to ask yourself how likely it is that your intern will have access to confidential information and how much will they be using it.
If you use the example of our intern receptionist again, a confidentiality clause within the scope of an Internship Agreement may be all you need.
But if you’re hiring an intern to help you complete your software development, then two separate agreements, one dedicated solely to the non-disclosure, may be the best option.
Be realistic about your particular situation, what you’re hiring an intern for, how you’ll be using them, and what they’ll have access to, and then you can make an intelligent decision on how best to handle your confidentiality matters with the intern.
No matter what you decide, it’s important that you discuss the subject of confidentiality directly and put your non-disclosure policies in writing.
While your intern may show up with novel ideas and mad computer skills, they’ll also need some coaching on how to navigate the more precarious aspects of business – especially proprietary information and trade secrets.
Clearly explain your expectations, put them in writing and have them sign that NDA agreement or that Internship Agreement with a confidentiality clause.
Credits: Icon contract by Robert Salazar from the Noun Project.
Jan 30, 2017 | Non-disclosure Agreements | Other Agreements
This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.