Global Non-Disclosure Agreements (NDAs): Best Practices

Non-disclosure agreements are critical in protecting sensitive information and ensuring confidentiality in business relationships. The legally binding contract is especially important when building a global team, helping to safeguard intellectual property and maintain trust when collaborating across international boundaries.

However, these contracts and agreements can be complicated. For example, 61% of private market professionals admit that NDA negotiations detract from other strategic work, and the process is more complicated when dealing with international clients and employees. 

HR and legal professionals face unique challenges when drafting an NDA for an international team, including jurisdictional differences across locations, conflicting data protection and privacy laws, obtaining consent and legally binding signatures, and ensuring NDAs are up-to-date. 

This article outlines some of the key best practices for global NDA management and highlights the benefits of using technology to support this important business process.

1. Be aware of jurisdictional differences

Failing to adhere to jurisdictional differences is a common global compliance mistake. Non-compliance with local legal requirements in NDAs introduces significant legal risks for businesses, such as the possibility of unenforceable agreements that expose sensitive information and introduce legal repercussions. 

For example, before a business in New York initiates the procurement process for a new product with an international supplier in China, it should ensure that a comprehensive NDA is in place to protect confidential information and intellectual property.

If the disclosing party to an NDA believes that the other party has violated the agreement by sharing confidential information, they may seek injunctive relief from a court. In addition, penalties may be imposed for violating regulations, introducing the further risk of financial strain and reputational damage. 

When working with a global team and drafting NDAs, consider the following: 

• Legal compliance: NDAs must comply with local laws to prevent legal complications and a potential breach of contract. Compliance also extends to data privacy regulations, such as the GDPR, when handling personal data in NDAs
• Cultural sensitivity: Cultural differences are a key consideration when drafting NDAs, ensuring that local customs and norms are respected. Cultural sensitivity goes a long way in maintaining a positive working environment with international partners and employees
• Enforcement challenges: Differences in legal systems and enforcement methods present a challenge, and companies must consider local legal systems to maximize protection
• Translation and interpretation: Accurate translation and interpretation are necessary when drafting NDAs for teams and collaborators that speak a different language, paying special attention to nuanced terms and how they impact the agreement

2. Get up to speed on data protection and privacy laws

Various jurisdictions have protection and privacy laws that govern personal data collection, processing, and transfer. A prominent example is Europe’s General Data Protection Regulation (GDPR).

When drafting an NDA, these data protection and privacy laws should be considered, especially when collecting and disclosing personal information from employees and independent contractors. These laws stipulate various requirements, such as obtaining consent for data collection, ensuring data security, and limiting the use of personal data as outlined in the NDA. 

Companies that align their NDAs with data protection and privacy regulations provide individuals with the right to access and control their personal information while protecting company interests. Failing to comply with these laws can lead to legal consequences, introducing the risk of fines, penalties, and reputational damage.

3. Always obtain consent and signatures

Getting informed consent from employees and independent contractors is an essential precursor to signing an NDA, ensuring compliance with jurisdictional data protection and privacy laws. 

Moving beyond compliance, obtaining valid consent promotes transparency and helps to establish a respectful, legally sound foundation for handling data and confidentiality agreements. However, obtaining consent across different jurisdictions may involve a few challenges. 

• Language barriers: Employees and contractors from different countries may speak different languages, hindering effective understanding of consent terms. 
• Cultural nuances: Understanding of privacy and legal agreements may differ from country to country, affecting the willingness of individuals to provide consent. Cultural sensitivity is essential when navigating cultural nuances.
• Consent documentation: Obtaining consent should be followed by maintaining proper records that satisfy legal standards. 

Taking a shortcut to obtain verification through inappropriate means, such as coercion or undue pressure, can lead to significant legal risks. Under these circumstances, consent may be considered voidable and unenforceable in a court of law. It may also lead to litigation, reputational damage, legal penalties, and a breach of ethical standards. 

Top tip: An NDA is typically added to an employment contract or business agreement, so it is important to inform the individual of the NDA clause before asking them to sign.

4. Keep NDAs up-to-date

Legal requirements and regulations are constantly changing, and it’s important to review and update non-disclosure agreements to ensure that they align with these changes.

Keeping NDAs updated is challenging for local companies, and these hurdles are magnified when managing a global company and workforce. Manually staying on top of these challenges is a complex and time-consuming process.

Using outdated and irrelevant NDAs defeats the agreement’s purpose, exposing the company to risks such as ineffective enforceability, data breaches that expose sensitive information, and reputational damage.

Manage NDAs with Deel

Expanding a business globally is an exciting period of growth, but it comes with its own set of challenges. Creating and managing globally compliant NDAs can be difficult for companies due to the complexities of international laws and regulations, as well as language and cultural differences. 

However, with Deel’s platform, the process becomes effortless. You can easily tailor a DPA based on your needs and sign it with any worker in just a few clicks. Once signed, you are covered globally through Deel. 

Learn more about how Deel’s platform can help your global business create and manage internationally-compliant NDAs for global teams by booking 30 minutes with a product expert to get your questions answered.