When I signed up to work with my amazing business coach, Caryl, she sent me a welcome package that included a beautiful spiral bound workbook that she had created. It included lovely artwork, photos, messages of encouragement, and guidance on how to use the book to maximize what I got out of the coaching relationship. It also included her unique Intellectual Property (IP) – outlining her method of daily, weekly, and monthly planning and accountability.
Every client she works with gets this book, which clearly was thoughtfully designed by Caryl. I am sure the workbook I received was the final iteration of many drafts and revisions until it looked exactly as she imagined. I know she put hours into making sure it included just the perfect mix of tips, tricks, and space for me to use as I did what I needed to do within her coaching program. And Caryl coaches all kinds of professionals, including other coaches or clients who are becoming coaches and launching their own coaching business.
So, what stops those existing Coaches and future Coaches from innocently, or not-so-innocently, co-opting the workbook or its contents in whole or part for their own use with their clients? Well, one good way is to have a nondisclosure agreement in place.
Now, as an attorney, I am constantly privy to my clients’ private and sensitive information. I am legally and ethically bound to always keep that information confidential. But there’s no such law or requirement on Coaches. So, when I, or any other client, share private business or personal information with a Coach – what ensures that such information remains confidential?
You guessed it – a nondisclosure agreement (sometimes also referred to as a confidentiality agreement).
Now, when one person or business agrees to keep information private and confidential – this is a unilateral nondisclosure agreement. When two people (or businesses) agree to share information, and each keep the other’s confidential – that is a mutual nondisclosure agreement.
Ready to implement or sign a mutual confidentiality agreement? Here’s what to look for:
The Parties
Have the Parties been correctly identified? Who actually shares and receives the information, and who is responsible for keeping it confidential? When businesses are exchanging information, a mutual nondisclosure agreement may need to be signed by both a representative of the business and the individual who will actually receive the information (such as an employee or contractor).
Is It Actually Mutual?
Carefully read the language to ensure that the agreement actually works both ways. In a mutual agreement, each party must agree to keep the specified information confidential. This language can either appear in one clause indicating both parties agree to maintain confidentiality, or it can be drafted as one clause requiring confidentiality of one party and another clause requiring confidentiality of the other party.
What Is Confidential?
The agreement should be as clear as possible about what is (and what is not) considered confidential information. A specific list itemizing every confidential pice of information is unnecessary, but it should be clear what each party will receive and is expected to keep as confidential (e.g., financial information, client lists, access to IP, etc.).
Limits on Use
If there are limitations on use of the confidential information – and there should be – the limitation needs to be clearly defined. For example, financial information may only be used to determine whether the recipient wants to buy the business. Or the receiving party may only use the confidential information to the extent needed to perform the service they have been hired to do. Limitations on who has access – such as stating that employees will only receive as much information as needed to perform their roles and only on a need-to-know basis – is important as well. If and when the information needs to be returned (or destroyed) should also be clearly stated.
What Law Applies
If the parties are in different states, specify which state’s laws apply. Each party is likely going to want their own state – unless the other state’s laws are more favorable for some reason. But, typically tied to the choice of applicable state law is also the choice of venue – where can a complaint or lawsuit be filed? “Home court” advantage is real – lawsuits, or even mediation or arbitration (if not conducted virtually), in your own state will cost less than conducting it in another state. The party drafting the agreement usually sets what state laws and venue apply.
Applying this to the Coaching Relationship
So, for Coaches and Clients – what does all this mean? Coaches and their Clients share a good deal of confidential information that should be protected. Because coaching can cover a wide range of topics, a general description of what may be shared is appropriate, as is the “catch-all” phrase of “or anything marked or designated ‘Confidential’ by the Parties.”
Limits on use on the Coach’s side should include at a minimum: that they will only use the information to inform their decisions and methods when coaching the Client; and, they will take care to redact identifying information when using Client information in case studies or seeking outside guidance. Limits on the Client’s side should, at a minimum, state that any IP or confidential information shared by the Coach is for the Client’s own singular use within their business and may not be used in whole or part to compete with the Coach.
