Category Archives: Punitive clauses

Nondisclosure and noncompete agreements: some practical advice

Remember back when the only contract you had with a customer was your word of honor? Recall that time in the nebulous past when word-of-mouth meant someone recommended you (as a reliable translator, accountant, electrician, publisher, typographer, designer, etc.) and you got a new customer’s ear to start working on a new project?

Translators: Remember those days when all you had to sign was a one- or two-page agreement with a translation agency?

The more complex the organization, more paperwork has to be read, signed and dated. Having been in the marketplace as an independent professional and an employee translator for several software companies since the late 1990s, I’ve learned a thing or two about agreements, what to sign, what to return unsigned for clarification, and when to dispute a restrictive clause. When I wrote a weekly column for a Lakeland newspaper in 2004-2005, I was required to sign an agreement with the actual owner of the newspaper (a large New York-based company with the word TIME on it). The agreement basically took all my intellectual rights away in exchange for the paltry sum I was going to get paid. I challenged the highly restrictive language —after all, it meant, in part, that I couldn’t use my columns on other publications, websites, books or media. However, I had to relent because I was told that it was a standard agreement. My priority was to get published, not to challenge a point.

In large companies, signing nondisclosure agreements (NDAs) is par for the course because any employee working on a product (even writing translations for a product or service) may come in contact with privileged, confidential or proprietary information. Trade secrets have to be safeguarded, the logic goes. If you are an independent contractor, you might fear not signing everything that the company is forwarding you because you think you’d lose the client. Some companies have a right to impose highly restrictive NDAs. I once worked for a translation company specializing in clinical trial documentation; having been recommended by an esteemed colleague, I was in and started working for them in less than a month. One of the conditions, however, was that I was never to disclose the name of the company in any way. Since this particular limitation did not restrict my earning power or jeopardize my intellectual rights, I signed it.

I have worked with dozens of translation agencies over the years, and I have developed a kind of yardstick to gauge for which I would consider signing any agreement at all. Basically, the more paperwork a translation agency gives you to sign, the warier you should be. I mean, why the paranoia on the part of the agency? Why lawyering up to a professional translator or interpreter? If you have been burned by a motormouth translator who gave away confidential information or by an interpreter who tweeted key case data, the solution is not to add more restrictive operational clauses to your agreement, but to choose your translators and intepreters more wisely.

Another sticky issue is that of noncompete clauses. I remember signing a couple of agreements with translation agencies where a noncompete clause was included. In short, I was not to pursue business with the agency’s clients for 12 or more months after the agreement’s termination. I didn’t see the harm in signing on such clause, but reading comments from fellow translators about this kind of language gave me pause. Several colleagues had pointed out the unenforceability of noncompete clauses.

A recent article published in The Wall Street Journal (June 15, 2016, B8 section) shed some much-needed light on the matter. Publishing company Law360 and the New York Attorney General’s office reached a settlement under which noncompete provisions should be removed from employment contracts.

noncompete agreements quote 1

Similar situations are taking place elsewhere (see quote about sandwich chain Jimmy John’s below). Even the White House has expressed an opinion. These precedents are highly relevant to practicing translators, proofreaders, technical writers, graphic designers, interpreters and other so-called knowledge workers. Remember that noncompete clauses and nondisclosure agreements are just some of the many aspects in a contractual relationship with a customer or employer. You are encouraged to do due diligence, learn the main legal concepts and terms involved, read an agreement before signing it, ask sensible questions, challenge any clauses you disagree with and, if necessary, walk away.

noncompete agreements quote 2

Translation educators should also take part in the discussion. Along with the requisite business skills that any professional should cultivate, the legal knowledge necessary to navigate through these and other agreements and contracts is essential to nurture a professional image and foster genuine cooperation with your customers.

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Filed under Confidentiality of information, Customer relationship, Fairness in agreements, NDA, Noncompete clauses, Punitive clauses

If you fall down, don’t cry and go to your mommy

Most translators are avid readers of printed books. I recently received an email alert from one of my public libraries, the Bay Village Public Library, to tell me a copy of Jonathan Strange and Mr. Norrell had finally arrived. I was walking to the entrance when I noticed a tall young mother and her 4- or 5-year-old boy gently chatting while walking in front of me to the entrance door. The boy suddenly tripped and hit his knee. He started to cry just like little tykes cry when they fall without serious consequences.

The mother helped him up and picked him up in her arms, consoling him while walking towards a small reading garden instead of the entrance door. For some reason, that moment immediately made me think of what the boy’s father would have likely done instead: dad would have stopped to turn towards the boy and say something like:

– Are you okay, David? It’s just a scratch on your knee.

– You ok, buddy? (helping the kid up and observing the scratch) It’s okay, just a scratch. Let’s go to the library!

Or phrases to that effect. Or maybe the father will turn the little painful event into playtime or downplay it with fun. A recent article in The Wall Street Journal pointed to the role fathers play in child development when they (the fathers) are allowed to engage in hyperactive play. Another article I read a while ago spoke of how children learn emotional strength by playing with their dad. The article, which also appeared in The Wall Street Journal, points to the element of risk in fatherplay and its value in child development:

Many fathers walk a fine line during play between safety and risk, allowing children to get minor injuries without endangering them, says a 2011 study of 32 subjects in the Journal of Developmental & Behavioral Pediatrics. Researchers say this can instill emotional intelligence under fire, and an ability to take prudent risks and set limits with peers.

The hyperactive play of fathers is beneficial for child development.

The hyperactive play of fathers is beneficial for child development.

Going out in the world as translators, businesspeople, doctors or athletes, we encounter situations that will cause minor and major hurts, from breaking up with a girlfriend to losing a cherished client. When a painful situation is a first for us, we take a bit longer to process our newfound feelings and thoughts on how to move forward. As we gain experience, we learn to control those feelings of pain, frustration, disappointment, etc. and also learn to heal up faster.

Learning to stand for oneself with father-play.

Learning to stand for oneself with father-play.

I recently lost a dear client after two years of successful engagements. It was my fault. I made the usual amends: apologies in writing and on the phone, offering to provide a discount on my next project, even go on “probation” for a few months as “punishment.” I didn’t wallow in self-pity nor did I slump in a deep depression, despite the fact that losing this client meant losing 30% of my annual income. Supported by the mental discipline learned since childhood, I thrived and prevailed. Sadly for the customer, he decided to do the politically correct thing and stick to some obscure principle of severely punishing a vendor for a minor mistake.

Like I said, it was my fault and I corrected the error. And this was not an error of the magnitude usually contemplated in Errors & Omissions clauses or policies, even though I keep an E&O insurance policy current at the request of this particular client. Which brings to mind an interesting thought experiment: let’s assume that I had provided a faulty translation that was printed on costly paper and distributed to this client’s customer base. Let’s assume this error cost my client $5,500.00 in extra printing costs, for which I would be responsible through my E&O —or professional liability— policy. Fine. What do businesspeople do in this instance? Client invokes the E&O provision, vendor assumes responsibility, E&O insurance company pays for the damage and possibly raises vendor’s policy premium a bit. In the end, both client and vendor keep doing business. Otherwise, what is the point of an E&O policy anyways? Wouldn’t it be an act of bad faith to ask your vendor for an E&O policy or some other remedy in case of an error or omission, only to let the vendor pay up and then cut him off?

So, I tend to view my lost-client experience as a mother overly comforting a child who just peeled his knee: the hurt was not catastrophic and the kid was able to get up and walk without any lasting injury. The excessive comfort provided by the mother seemed to say, in this parallel, that the injury was greater than it really was. What would happen when the kid becomes a man and his mom is no longer around? Who is going to be the biggest comforter? An insurance policy? The government? A punitive contract clause?

Speaking of contract clauses, agreements entered by clients and translation vendors have the simple purpose of stating the scope of products or services provided by the vendor, performance conditions and rewards, as well as consequences for nonperformance. Some customers, afraid perhaps that an error or omission in a translation would be catastrophic, tend to include a harshly punitive clause in their NDAs (nondisclosure agreements) or translation agreements with contractors, making the latter 100% responsible for all claims and damages resulting from agreement noncompliance. If you were the translator doing a job worth $550 for your client, how does that clause square with a potential error in that translation job? If the translation is faulty, are you, the translator, subject to a lawsuit, legal expenses and such?

To be able to foster and maintain healthy business relationships between clients and translation vendors, a sincere discussion of errors and remedies should take place, as well as what-if scenarios and how each party would act. We could take the overprotective, “hovering motherly” route (no offense to the mothers out there) and ask for full protection in case of error or injury at the expense and to the detriment of a business relationship…or man up and proceed in a way that is fair, disciplined and trust-building to both parties.

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Filed under Customer relationship, Customers, Errors and omissions, Fairness in agreements, NDA, Negotiating contractual clauses, Punitive clauses, Translation contracts