You just got a summer internship offer, and now your new employers are throwing documents and contracts with tiny print and endless lines for you to read and sign.
For an internship, the most common issues on the table are a non-disclosure agreement (NDA) and patent assignment.
An NDA is an agreement between employees and the company to keep trade secrets a secret.
A “trade secret” is a unique ingredient, algorithm or component of a product that gives a company an edge and separates it from other companies in its field. Most companies in the technology and financial industries will require interns to sign a non-disclosure agreement before beginning work.
Many employers also require employees to sign an agreement requiring employees to give patents that result from inventions discovered while working at the company to their employer.
What happens if a potential employee refuses to sign the document?
“There’s a total imbalance of bargaining power in this case because the company holds all the cards, and there are other people who want to work there, so unless you have some special skill that is really in demand by that company, it might be very hard to push them,” said Faustino Lichauco, a lawyer at ORT Patent Law in Boston.
According Lichauco, because of common law, there is not much benefit to not signing.
“If you’re going to become an employee anyway, it’s not like you’re giving that much up, because even if you don’t sign it, just the fact of being an employee, there’s a lot of common law out there that says that even in the absence of a signed statement, you’re probably going to have to do it anyway,” Lichauco said. “You’re almost formalizing what you have to do anyway.”
However, there is a possibility of negotiating on certain terms, such as shortening the time a part of the agreement is valid or defining a more favorable scope.
To avoid sticky situations with these agreements, be sure to ask for the details of a company’s non-disclosure or patent assignment agreements before accepting an offer and give all documents a read-through before signing.
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