It is unusual to join any company engaged in technology or finance and not have to sign a secrecy agreement. The competitive nature of business is such that information relating to business activity needs to be kept from the prying eyes of the competition. That’s easy to understand. If you refrain from blabbing your activities to the competition, you may have an advantage in the market. It’s a zero sum game- their ignorance is your gain.

But it is possible to stumble across the line from prudent practice to paranoia.  Often is the case that the first draft of a contract or a secrecy agreement is full of grabby, over-reaching terms and conditions that represent a minefield for the inattentive. Negotiation is the act of shaving down unreasonable requirements to an agreeable topography of ups and downs that you can live with.

I have learned that it is best to decline to agree to broad, ill-defined terms, in favor of short, highly focused terms regarding specific actions, information, or outcomes. For instance, agreeing to “hold in confidence all information to relating to the business activity” of a company is a recipe for potential trouble.

It is better to set the expectation that the agreement is for a tightly defined purpose and only a narrowly defined range of information will be disclosed in the first place.  It is important to require that whatever is disclosed is reduced to print, or if disclosed verbally is reduced to a tangible form within a short time period.

If you are going to be subject to a lawsuit due to an alleged breach of secrecy, then it is important to have discoverable evidence that a limited range of information was disclosed. It is also important to set the expectation that Confidential Information is properly marked as such so that the recipient can reasonably prepare to contain it.  You do not want to have hand waving arguments by the other side claiming that “we said (this or that) in a meeting and then the defendant willfully disclosed the information without permission”.  Verbal disclosures are nothing but potential trouble.

Being in possession of another companies secrets is a genuine burden and a risk. You want to minimize it to the greatest extent possible and impose disciplines on the part of both parties to keep the disclosures lean and tight.