Understanding the Tri-Party Relationship
Agency placements create a unique three-way confidentiality dynamic. Each party has different information to protect and different concerns.
End Client
Business secrets, projects
Agency
Rates, placement terms
You (Contractor)
Skills, other clients
The agency acts as an intermediary, and confidentiality flows in both directions. You must protect the end client's information from unauthorized disclosure, while also keeping the agency's business terms confidential from the client.
Common Agency Arrangements
Staff Augmentation
You work on-site or embedded with the client team. The agency handles payroll and benefits, but you report to client management. Most common for IT and professional services.
Project-Based Placement
Agency contracts for a specific deliverable and assigns you to complete it. The agency may manage the project or simply provide resources. Common in consulting.
Recruitment/Temp-to-Perm
Agency places you with a client who may hire you directly after a trial period. NDA terms often change upon conversion to direct employment.
Critical Agency NDA Clauses
Pass-Through Obligations
The agency's NDA with the end client typically "flows through" to you. You're bound by terms you may not have seen. Ask for copies of the client-facing NDA before signing.
Rate Confidentiality
Your compensation, the agency's markup, and billing rates are almost always confidential. Disclosing these can result in termination and potential liability.
Non-Circumvention
Prohibits you from accepting direct work from the end client, bypassing the agency. Usually lasts 12-24 months after the placement ends. May require payment of a "conversion fee."
Client Identity Protection
Some agencies require you to keep the client's identity confidential. You may not be able to list them on your resume without explicit permission.
Indemnification
You may be required to indemnify both the agency and end client for breaches. Understand the scope of liability you're accepting before signing.
Survival Periods
Confidentiality obligations typically survive termination. Agency NDAs often have longer survival periods (3-5 years) than standard contractor NDAs.
Navigating Agency Confidentiality
1. Request All Applicable NDAs
Before starting, ask the agency for copies of any NDAs between the agency and end client that apply to you. You need to understand all obligations, not just the ones in your direct agreement.
2. Clarify Information Boundaries
Understand what you can and cannot share between the agency and client. For example, the client may ask about your rate or agency relationship - know in advance what you can disclose.
3. Document Portfolio Permissions
Get written permission if you want to use work from agency placements in your portfolio. Both the agency and client may need to approve, and the process can take time.
4. Understand the Conversion Path
If the client wants to hire you directly, review the non-circumvention clause carefully. Many agencies require a waiting period or conversion fee that someone must pay.
5. Keep Detailed Records
Maintain records of what information came from which source. If a dispute arises, you'll need to demonstrate that you didn't improperly use or disclose confidential information.
What Agencies Want to Protect
- Client relationships and identities: The agency's client list is often their most valuable asset
- Billing rates and markup: Their profit margin depends on rate confidentiality
- Business processes: How they source, vet, and place contractors
- Other contractor information: Rates and placements of your peers
- Contract terms with clients: Master service agreements and statements of work
Related Resources
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