Reduce Hiring Risk: Confidentiality Agreements and Employee Vetting

You’ve recently received a wave of calls from prospective clients, and your company is suddenly faced with more work than it can complete in a timely manner. Outsourcing isn’t a viable option because the project is sensitive in nature and requires collaboration with a couple of in-house experts. Instead, you’re considering calling in a team of developers to work on-site with your team (aka insourcing). You’re confident this will be an effective solution, but there’s a problem. You need strict confidentiality, and you’re nervous because on-site talent would have access to lots of sensitive information. If that information got into your competitors’ hands, it could ruin your business!

This is a very real problem for many companies, especially large corporations. One study found that while 80 percent of SME staff feel loyal to their company, just 50 percent of large enterprise employees felt a sense of loyalty. Those are frightening figures for any business leader, especially if you’re considering hiring temporary staff, who may not have an opportunity to develop a strong sense of loyalty. So you’re tasked with hiring good, ethical people who can pass vetting measures. So how do you protect your company when hiring temporary tech staff and developers? Well, protection can be achieved by using a confidentiality agreement for employees. But they’re not bulletproof, so you’ll need to ensure you develop a multi-pronged approach to protecting your company.

Why Do I Need a Confidentiality Agreement?

A confidentiality agreement also called a non-disclosure agreement (NDA) is an important legally-binding document that protects your intellectual property and other sensitive data. An employee agrees to avoid disclosing the company’s information, practices and processes, data and clients/customers. This document which should be notarized will restrict an individual from sharing or disclosing information that could be damaging to your business. The agreement also outlines what type of information is protected and the remedies in the event of a breach, such as agreeing to compensate the company for any and all damages that arise as a direct result of the former employee’s alleged disclosure.

Some NDAs are in effect indefinitely, while others are valid for a particular time frame. Tech companies frequently specify a timeframe, as some information is only relevant or valuable for a matter of weeks, months or years. For instance, a developer who worked for Google in 2009 would likely possess little information that would be relevant to competitors in 2017, since the tech and search landscape has evolved in a very dramatic fashion. So Google might implement a three- or five-year prohibition on working for a direct competitor.

These agreements must be reasonable, or they may not be enforceable in court. If you were to prohibit employees from working with any and all other IT service providers forevermore, then it’s virtually certain a judge would deem this to be unreasonable and unenforceable.

Companies can include confidentiality-related clauses in their employment contracts too. For example, it’s common practice for tech companies to impose a prohibition on working for specific competitors for anywhere from one to five years after they leave the company. This prevents the talent from intentionally or unintentionally providing proprietary information or insight to the competition.

What are the Challenges Surrounding Confidentiality Agreements?

For employees who are working in another region whether it’s in another state or in another country you may encounter some challenges, because it can be difficult to craft an agreement that is valid in both jurisdictions. This is a significant problem in outsourcing, since you could find the confidentiality agreement is not worth the paper it’s written on. Even determining which jurisdiction’s laws prevail can be a major obstacle.

Another issue surrounds enforcement and litigation. Even if you hire an attorney to draft a legally-sound confidentiality agreement that covers you in all relevant jurisdictions, you may still face challenges if you actually need to enforce it. This gets tricky because your company may need to hire an attorney in another state or even another country. This long distance legal work can get very expensive, so it’s a key consideration. If you’re not willing or financially able to enforce the NDA or confidentiality agreement for an employee who is living/working in another region, then that document holds little water.

Legal soundness is yet another key point to weigh. Many companies take the fast and easy route by using one of the many non-disclosure/confidentiality agreement templates online. But these generic documents frequently omit key clauses and essential information. This is one area where you want to ensure that you’ve covered your bases by investing in an attorney’s services. An experienced business lawyer can examine your unique needs, drafting an agreement that will offer maximum protections to your company and its interests.

Projects that are outsourced overseas carry the highest risk in terms of confidentiality agreement breaches. The distance makes enforcement quite costly and complex, and that says nothing of the struggles associated with long distance project oversight. Deception is also far harder to detect at a distance. These factors make vetting and reference checks all the more vital during the recruiting and hiring process.

Vetting Software Developers and Tech Staff

Vetting is an important part of the hiring process for software developers, app developers, IT experts and other tech staff, as you’re entrusting these individuals with access to potentially valuable intellectual property and data. There’s virtually nothing stopping a developer from swiping source code for a proprietary software program, removing your company branding and other identifiers before selling the software on the open market (or worse, selling to a competitor!).

Vetting allows you to identify individuals who are more likely to be ethical and honest. You can also ask if the person shared information gleaned from prior employers. If an individual has a history of sharing one company’s data with another, then this is a huge red flag.

IT professionals may also have access to extensive databases. A large, niche-specific customer list can carry tremendous value on the open market, and this type of breach can have a devastating impact on your company’s image. A single incident involving a customer list disclosure holds the power to obliterate the public’s trust in your business.

The frightening part is that you may never discover that these breaches have occurred. For example, you may fail to realize that your lead developer has sold your proprietary enterprise software to the competition. This is a major concern across all industries, and it leaves many companies hesitant and considering different strategies to hire temporary tech and IT staff. It can get particularly challenging if they would require access to sensitive data.

Even the most legally-sound confidentiality or non-disclosure agreement may not phase an unethical person who has ulterior motives. They believe that with the right precautions, their betrayal will never be discovered. There is one point working in your favor, however: this type of person virtually always has a spotty history. For this reason, it’s important to thoroughly vet your developers and IT staff, performing background checks when necessary and contacting references. You can also implement tech measures to provide added peace of mind, such as sophisticated security and logging software, that monitors activity and regulates permissions to restrict access to sensitive data.

This is one advantage of working with a tech staffing firm like iTech, as we have the experience required to find trustworthy and skilled talent. In fact, many of our developers and IT professionals have worked for many of our clients, proving themselves as ethically sound individuals. Additionally, we work with IT professionals and developers from across the globe, sending talent to work for clients across the U.S. and beyond. This gives our clients an advantage in terms of accidental disclosures, as there is little chance that a former tech staffer will subsequently make an accidental disclosure to a direct, local competitor. In contrast, if you’re limited to local talent, there is a good chance temporary staff may go on to work for a local competitor.

Our company serves clients throughout the Texas Triangle (Houston, Austin and Dallas) and across the United States. We work to gain a firm understanding of your unique needs and your development project specs, which we then use to craft the perfect job description. iTech’s team oversees the entire recruiting process, providing you with a talented tech team that will maximize your company’s productivity. We invite you to contact us to learn more about our service offerings.

[activecampaign form=5 css=1]

[activecampaign form=5 css=1]