Key Differences at a Glance
| Aspect | NDA | Work-for-Hire |
|---|---|---|
| Primary Purpose | Prevent disclosure of confidential information | Assign ownership of created work to the client |
| What It Covers | Information shared with you (trade secrets, business plans, data) | Work product you create (code, designs, content, inventions) |
| Your Obligation | Keep information secret; don't share or misuse it | Transfer all rights to the work you create |
| Duration | Typically 2-5 years (longer for trade secrets) | Permanent (ownership transfer is forever) |
| Breach Consequence | Damages for disclosure; possible injunction | Loss of rights to use your own work; copyright infringement claims |
| Can You Reuse It? | You can use skills/knowledge; not specific information | No - the client owns the work exclusively |
| Portfolio Rights | Usually can display with permission | Must be explicitly negotiated or you have no rights |
When You Need Each Agreement
Initial Consultation Only
You're meeting with a potential client to discuss their project. They'll share business plans and requirements, but you won't be doing any work yet.
NDA OnlyBuilding Custom Software
You're developing a custom application for a client. You'll have access to their systems and will be writing code they'll own.
Both NDA + Work-for-HireLogo Design Project
Creating a logo and brand identity. Client needs to own the final designs exclusively, but you won't have access to sensitive business information.
Work-for-Hire OnlyBusiness Strategy Consulting
Advising on business strategy. You'll see financial data and growth plans. Your advice belongs to you, but the information you learn is confidential.
NDA OnlyMobile App Development
Building a mobile app using client's proprietary algorithms and business logic. You'll access their API and user data while creating code they'll own.
Both NDA + Work-for-HireTechnical Maintenance
Providing ongoing support for existing systems. You'll access their codebase and databases but aren't creating significant new work.
NDA OnlyUnderstanding NDAs for Contractors
A Non-Disclosure Agreement (NDA) is a contract that creates a confidential relationship. The party receiving confidential information agrees not to disclose it to others.
What NDAs Typically Protect:
- Trade secrets and proprietary processes
- Customer lists and business relationships
- Financial information and pricing strategies
- Product roadmaps and unreleased features
- Technical specifications and architecture
- Marketing plans and business strategies
What NDAs Don't Do:
An NDA doesn't give the client ownership of your work. If you write code while under an NDA, you still own that code unless there's a separate work-for-hire or assignment agreement. The NDA only prevents you from disclosing the confidential information you learned.
Understanding Work-for-Hire
A work-for-hire agreement transfers intellectual property rights from the creator (you) to the client. The client becomes the legal author and owner of the work as if they created it themselves.
What Work-for-Hire Covers:
- Source code and software
- Designs, logos, and artwork
- Written content and documentation
- Inventions and innovations
- Data models and algorithms
- Any creative or technical work product
Key Implications:
Once you sign a work-for-hire agreement, you typically cannot reuse the work on other projects, include it in your portfolio without permission, or license it to others. The work belongs entirely to the client. This is why negotiating portfolio rights upfront is essential for contractors.
Combined Agreements: PIIA
Many companies use a combined agreement called a Proprietary Information and Inventions Assignment Agreement (PIIA). This document includes both NDA provisions and work-for-hire/assignment clauses in a single contract.
Typical PIIA Structure:
- Part 1 - Confidentiality: NDA-style obligations regarding company information
- Part 2 - Inventions Assignment: Work-for-hire language for created IP
- Part 3 - Prior Inventions: Schedule of your pre-existing IP that's excluded
- Part 4 - Return of Materials: Obligations when the engagement ends
When reviewing a PIIA, treat each section separately. You may be comfortable with the confidentiality terms but want to negotiate the inventions assignment or add items to the prior inventions schedule.
Negotiation Tips for Contractors
For NDAs:
- Ensure confidentiality periods are reasonable (2-3 years for general info, indefinite only for true trade secrets)
- Confirm you can use general skills and knowledge learned during the project
- Verify the definition of "confidential" isn't overbroad
- Check for mutual obligations if you're sharing your own confidential information
For Work-for-Hire:
- Attach a schedule of pre-existing IP that's excluded from the assignment
- Negotiate portfolio rights (even limited ones like "with client approval")
- Consider licensing arrangements instead of full assignment for some elements
- Clarify ownership of generic tools and templates you develop
Related Resources
Need the Right Agreement?
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