Should you sign a client's NDA? What to check first

Clients send NDAs before kickoff calls, before sharing briefs, sometimes before they will even describe the project. Most of the time, signing is the right call — protecting genuine trade secrets is a reasonable ask. But "most of the time" is not "always," and some client NDAs contain provisions that are much more consequential than a simple confidentiality obligation.

This article walks through five things to check before you sign a client's NDA, explains what each provision actually does, and tells you when to push back.

1. Does it contain an embedded non-compete?

This is the most common trap in client NDAs, and it is often buried in a section titled "Confidentiality" or "Restrictions." A non-compete or non-solicitation clause limits your ability to work with competitors, in a particular industry, or with similar clients — sometimes for one to two years after the engagement ends.

For a freelancer whose livelihood depends on a niche skill set, a broad non-compete in a single client NDA can be career-altering. Read every paragraph. Look for language like "will not engage in any business that competes," "will not solicit clients of," or "will not perform similar services for."

California voids non-compete clauses for independent contractors under Cal. Bus. & Prof. Code § 16600(a). Minnesota voids them for independent contractors under Minn. Stat. § 181.988. In most other states, they are enforceable if reasonable in scope and duration — which means you need to negotiate or decline before signing, not after.

2. How broad is the definition of "confidential information"?

A reasonable confidentiality definition covers information that is actually secret: unreleased products, pricing strategy, customer data, financial projections. An unreasonable definition covers "any information disclosed, whether or not marked confidential" — which could include a client's name, the fact that you worked together, or publicly available information that the client happened to mention.

Check whether the definition excludes:

• Information you already knew before the engagement
• Information that is publicly available or becomes public through no fault of your own
• Information you independently developed without using the client's data
• Information you received from a third party with no confidentiality obligation

These four carve-outs are standard in well-drafted NDAs. If they are missing, ask for them. A client who refuses to carve out publicly available information is treating the NDA as a gag agreement, not a trade-secret protection.

3. Is it mutual or one-sided?

A one-way NDA requires only you to keep information confidential. A mutual NDA requires both parties. For most pre-engagement NDAs, one-way is fine — the client is sharing their secrets, and you are not sharing anything sensitive in return. But if you will be sharing your own proprietary methods, processes, pricing, or tools with the client, a mutual NDA is appropriate.

If the NDA is one-sided and you are sharing sensitive material, you can either ask the client to make it mutual or add a brief paragraph covering your own confidential information. Most clients will accept that request.

4. Does it contain an IP assignment sweep?

Some NDAs contain a clause — often titled "Ownership" or "Intellectual Property" — that assigns any work you create during the engagement to the client. This is more properly a provision of a services agreement, and it may be broader than what you would negotiate in your main contract.

Under federal copyright law, a copyright transfer must be in a signed writing to be effective (17 U.S.C. § 204(a)). A signed NDA with an IP clause is that signed writing. If the NDA's IP clause assigns everything you create — including code libraries, design systems, or templates you bring to the project — you may unknowingly give away work you intended to keep.

Look for language like "all work product created in connection with this agreement is assigned to Client." If you see it, narrow the assignment to work specifically created for this engagement, and add a carve-out for your pre-existing tools and background IP.

5. Is the DTSA whistleblower notice included?

The Defend Trade Secrets Act requires that any agreement with an employee or contractor that governs the use of trade secrets include a specific notice: that the individual may disclose trade secrets confidentially to the government or to an attorney in connection with reporting a suspected legal violation, or in connection with a lawsuit alleging retaliation for reporting (18 U.S.C. § 1833(b)).

The notice does not need to appear verbatim — the NDA can incorporate it by reference to the statute. But if it is missing entirely, the client loses the ability to recover exemplary damages and attorney fees in federal trade-secret litigation. This is their problem, not yours — you are not penalized for a missing notice. But its absence is a signal that the NDA was not drafted carefully, which may warrant closer reading of the rest.

Our NDA template includes the DTSA whistleblower notice by default.

The checklist before you sign

• Read every paragraph, not just the section titled "Confidentiality"
• Check for non-compete or non-solicitation language
• Verify that the four standard carve-outs are present
• Decide whether one-way or mutual protection is appropriate for this engagement
• Check for any IP assignment language and narrow it if necessary
• Note whether the DTSA whistleblower notice is present

If the NDA is short and straightforward, this checklist takes ten minutes. If it is long, complex, or contains provisions you do not understand, consult an attorney before signing — not after.

When it is fine to just sign

Most pre-engagement NDAs from legitimate businesses are fine to sign as-is. They protect real secrets, contain the standard carve-outs, do not include non-competes, and do not reach into your IP. If a quick read of the document confirms all five points above are handled, sign it and move forward.

The goal of this checklist is not to make every NDA a negotiation — it is to help you recognize the ones that deserve a second look before you sign.

Related resources

• NDA template — mutual and one-way, with the DTSA whistleblower notice included
• Do you need an NDA before sharing your idea? — when to ask a client to sign an NDA before you pitch
• 7 red flags to watch for in a client contract — the broader contract checklist
• Freelance contract template — the main services agreement, separate from the NDA
• Build your own NDA →