Mark Pestronk
Mark Pestronk
Q: A prospective corporate account has told us that we must sign its nondisclosure agreement before we can submit a proposal. Are there any typical pitfalls for travel management companies in such agreements? Also, won't it hurt our chances of winning the business if we tell them that we object to some of the clauses in the agreement?


A: Nondisclosure agreements (or NDAs), which are also known as confidentiality agreements, can vary quite a bit. However, almost all such agreements should probably contain provisions such as the following:

• Mutuality: The agreement should protect your confidential information as well as the account's. For example, if you have to disclose your list of largest accounts and their travel volumes, you need to make sure that the agreement protects this information from disclosure by the account.

• A definition of "confidential information": The definition usually recites a list of typically confidential facts, such as financial information, trade secrets and patents. Most of this is info (except for personally identifiable travel information) is irrelevant to your duties as a travel management company, and you will probably never have access to it anyway, so there is usually nothing to worry about here, except to make sure that the definition covers your proposal.

• Exceptions for information that is public or becomes public: If the account is often traveling to a competitor's city, their travel is protected by the agreement until it becomes public knowledge that your client has acquired the competitor, in which case you should be able to talk about what you read in the media.

• Exceptions for disclosure required by law, such as subpoenaed information: You should not need the account's consent to comply with a subpoena or court order.

• Nonuse and nondisclosure: The agreement may contain a prohibition on use of the account's information for any purpose other than travel arrangements as well as a prohibition of your disclosure of the confidential information to third parties. The latter is obviously unacceptable, as you have to provide traveler info to travel suppliers, so make sure that such disclosure is allowed.

• Third parties: The agreement may require you to make sure that your employees, independent contractors, subcontractors, and other third parties with access to the confidential information comply with the agreement. Since travel suppliers could conceivably be called your subcontractors in the travel management, you need to make sure that you expressly provide that you are not responsible for suppliers' use or disclosure of confidential information.

• An "irreparable injury" clause: This lawyer language essentially states that you agree to an injunction against further use of confidential information instead of, or in addition to, money damages. It is relatively unimportant because plaintiffs can usually get an injunction even without such language.

In addition to these typical clauses, some NDAs also have a commitment beyond mere confidentiality, in that they may require you to negotiate in good faith with the account or even just "cooperate" to move toward a final travel management agreement. Such language puts you at risk if you decide that you want to withdraw your proposal and walk away during later negotiations.

I have suggested changes to many NDAs that are required by prospective corporate accounts, and I have never known an account to object to reasonable changes. So, unless the account has told you that its NDA is non-negotiable, I don't think you will lose the account by proposing changes.
Comments
JDS Travel News JDS Viewpoints JDS Africa/MI