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MusicBizAdvice.com answers your questions about the music industry.
Q: A management company I want to work for wants me to sign a confidentiality agreement. Is that OK? Should I be worried?
A: As someone who’s signed quite a few confidentiality agreements over the years as both employee and employer, frankly I’m more concerned when a company or artist doesn’t have them! In my experience, employers who use confidentiality agreements tend to be more professional in other matters as well.
People who work behind-the scenes are privy to a variety of sensitive information—and I don’t just mean the gossipy kind. Depending on your job, during a normal business day you may handle documents containing a client’s home address and private phone numbers, and private financial and tax information (which are needed to facilitate artist payments for live performances). You may even know personal things about the artist, such as medical information, that even some of their own family members may not.
Given all that, as well as the invasive nature of the gossip media, most legitimate entertainment companies protect their clients’ sensitive information by requiring employees (including temps and interns) to sign confidentiality agreements. If you were a client, wouldn’t you want that reassurance? (To protect themselves, when considering working with a new company, artists should always inquire about that company’s employee confidentiality agreements.)
In case you’re wondering, a confidentiality agreement can not be used to hide or cover an employer’s illegal activity. Though laws vary from state to state, in most cases a legal document cannot be used to hide something illegal. In some states, illegal activity on the part of the employer may even void the confidentiality agreement altogether.
Incidentally, lack of an “official” confidentiality agreement and the idea of “free speech” doesn’t mean you’re entitled to tell, leak, post, or tweet whatever company information you wish. As in any business, discretion is an unspoken but fully expected part of the job.
Additionally, the indemnification clause in many employment documents and contracts is carefully worded to allow for broad interpretation to include anything that could cause “potential harm” to the company’s reputation. More often than not, spilled company info fits into this broad interpretation, or at the very least will send the two parties into a fierce and expensive legal battle.
Finally, people who “tell all” become persona non grata and don’t last long in the business (or any other, for that matter). Someone always finds out who sprung the leak, then tells everyone they know, making it extremely difficult for that person to obtain future employment. I’ve seen it happen more than once, and it gets very ugly, very fast…not to mention expensive in legal fees for all involved!
For that reason, when you see a juicy tell-all book from someone who works behind the scenes, it’s usually because they’re either about to retire or because they need money so badly they think they have nothing to lose…and their attorney’s have been over the manuscript with a fine-toothed comb.
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Answers in the MBADC Q&A are to be taken as general advice only and are not intended as a substitute for legal advice from a competent entertainment or intellectual property rights attorney.