Navigating NDAs and NCAs: Common Pitfalls and Limitations

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Imagine this: you’ve landed your dream job offer, ready to celebrate, but then two ominous acronyms land in your inbox – NDA and NCA. Should you sign? Will they stop you from even coding for your own personal projects? IT lawyers from Stalirov&Co explain what these letters really mean and how to protect yourself from unpleasant surprises.

What Is an NDA?

An NDA (Non-Disclosure Agreement) is a document you sign to confirm that you agree not to share confidential information about a company. It’s a promise to keep quiet about your employer’s internal processes.

Typically, an NDA covers the following key points:

• Definition of Confidential Information: A clear description of what is considered confidential — for example, business strategies, technical specifications, financial data, or product development plans.
• Obligations of the Parties: The responsibilities of each party — one side shares information, and the other agrees not to disclose it.
• Term of the Agreement: The duration of the NDA, which may extend from a few months to several years after the end of employment or collaboration.
• Exceptions: Specific cases when confidential information can be disclosed, such as compliance with legal requirements or a court order.
• Consequences of Breach: Possible outcomes if the agreement is violated — including penalties, legal action, or other consequences.

When reviewing an NDA, pay close attention to how clearly the terms are defined. If you come across vague wording like “any information that could be useful to competitors”, don’t hesitate to ask for clarification. It’s important to understand exactly what type of information is being protected.

Also, analyze the duration of the NDA. Sometimes companies set excessively long terms (for example, 10 years) — it’s worth trying to negotiate a shorter period.

What you can usually talk about:

• The name of the company you work for.
• A general description of your role, for example: “I work on backend development with Python.”
• Publicly available information about the product or service — anything found on the official website, social media, or public presentations.

What you can’t talk about:

• Details from technical documentation or the internal system architecture.
• Information about algorithms, APIs, or frameworks you’re working on — even if they seem trivial.
• Anything that could give competitors a strategic or technical advantage.

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It’s worth remembering that companies aren’t necessarily being overly demanding when they ask you to sign an NDA. Their primary goal is to protect the information that gives them a competitive edge in the market. Have you heard about the high-profile case between Rippling and Deel, two unicorn companies in the HR tech space?

Rippling accused Deel of industrial espionage. According to them, one of Rippling’s specialists was passing confidential information about potential clients and pricing strategies to Deel. To catch the “mole,” Rippling created a fake channel on Slack — a kind of trap. The employee joined the channel, which became proof of the information leak.

What is an NCA?

A separate section of an NDA is often dedicated to the NCA (Non-Compete Agreement). This clause in the contract restricts your right to work for competitors or start your own business in the same field for a certain period after you leave the company. For example, if you sign an NCA with Bolt, it could hypothetically prevent you from working for Uber for 6–12 months. Of course, the rules must clearly define what constitutes competition — otherwise, it could lead to abuse.

Red Flags: When to Think Twice About Signing an NDA and NCA

Here’s a list of questionable points to watch out for before signing non-disclosure or non-compete agreements:

🚩 An excessively broad scope of confidential information. Formulations like “any information related to the company” instead of a specific list of data can be problematic. Clarify exactly what data cannot be disclosed: code, design, customer data, etc.

For example, Richard Brown worked for TGS Management, an investment firm. His agreement stated that he couldn’t disclose any information obtained during his employment. The issue was that this “information” included almost everything related to investments and statistical methods. After leaving, he went to court to have the non-compete clause overturned. The court sided with the former employee, ruling that the agreement violated California law, which explicitly prohibits contracts that restrict the right to work in one’s profession.

🚩 An unreasonably long NDA term. If the document requires you to keep secrets for 5–10 years after leaving the company, that’s a red flag.

🚩 Excessive geographical reach of the NCA. If you’re prohibited from working “worldwide,” this is unacceptable and often legally questionable. Restrictions should reflect the actual scope of the business. For example, if a company only operates in Houston, there’s no justification for preventing a specialist from working elsewhere in Texas. Overly broad geographical restrictions can render a non-compete agreement invalid.

🚩 An overly broad list of prohibited companies. If your NCA includes dozens of companies or vague phrases like “any company operating in IT,” it can make finding a new job nearly impossible. If the agreement doesn’t specify which companies or industries are considered competitors, it opens the door to abuse. Negotiate specific restrictions — by industry, region, or key companies.

🚩 An overly broad list of prohibited technologies. NDA/NCA restrictions should only apply to unique developments or patented technologies, not to commonly used programming languages, frameworks, or standard industry practices.

🚩 Lack of a transparent process for terminating the agreement. You should clearly understand how and under what conditions the agreement can be ended.

If you freelance in addition to your main job, pay attention to clauses that prohibit working with other clients. The NDA may include provisions for “exclusivity” or a complete ban on side projects and activities in related fields. This isn’t necessarily a dealbreaker, but it can significantly affect your ability to work independently.

How to Say “I Won’t Sign This” — and Still Keep the Job Offer

If the terms of an NDA or NCA worry you, don’t sign the document out of fear of losing the offer. Instead, try to discuss the conditions:

• Prepare your arguments. Show that your concerns are reasonable: “I noticed that the document contains vague wording — could we clarify this?”
• Suggest an alternative. If the NDA seems overly strict, propose adding specific details or shortening the restriction period.
• Ask for a lawyer’s help. You can say, “I’d like my lawyer to review the document to avoid any misunderstandings in the future.” This signals that you’re not refusing to sign, just protecting your rights.
• Be open to dialogue. Don’t be confrontational — show a willingness to cooperate: “To be honest, these conditions seem a bit strict to me. Can we discuss some alternatives?”

How to Avoid Trouble After Signing an NDA

Signing an NDA or NCA is only half the battle. To avoid future problems, follow these rules:

• Keep a copy of the agreement. After signing, be sure to save a copy of the NDA/NCA so you can review the document if you have any doubts.
• Be careful when creating your portfolio. Don’t include projects covered by an NDA unless you have written permission from your employer.
• When you leave, ask about the restrictions. Clarify which provisions of the NDA or NCA remain in effect after your departure, and make note of the deadlines.

Signing an NDA doesn’t necessarily mean making a “deal with the devil,” but ignoring its terms can lead to serious problems. To avoid risky obligations, it’s important to carefully review the document, watch for vague language, excessive restrictions, and overly long terms. If you have any doubts, discuss the conditions with your employer. A thoughtful approach to reviewing and negotiating an NDA will help you protect your interests without risking the job offer or harming your career.