We’ve talked before about the consequences of breaching your contract, which included examples where freelancers have violated their NDA or accidentally exposed sensitive client data.
In this post we’re focusing on the confidentiality side of contracts. These agreements exist to protect the party sharing private information and ensure the freelancer handles that information responsibly.
It sounds simple. The client has sensitive data and the freelancer agrees to keep it safe. But signing a non-disclosure agreement without fully understanding the terms can create problems. If you’re unaware of the constraints within the project, even an innocent action like showcasing the work in your portfolio could put you in breach.
What does a confidentiality clause look like?
NDAs (and sometimes broader contracts) will outline what information the client considers to be confidential. A generic confidentiality clause will look like this.
Confidential information includes information which is marked “confidential” when it’s given to the Receiver. This may include spoken information which the Discloser said was confidential when it was given; and any note or record made by the Receiver of any spoken information which is confidential. Any Information obtained through discussions between the employees, contractors, agents and advisors of either Party. Any copy of any of these sources of the Confidential Information.
This is quite broad. The NDA you’ve signed should be more explicit and outline that confidential information extends to:
- source code
- database rights
- inventions
- customer details
- formulae and processes
- designs
In a nutshell you’ll be expected to keep this information safe and not disclose it to anybody else—either intentionally or accidentally. Simple, right?!
Examples of breach of confidentiality
We’ve reviewed our claims data to find recurring themes where freelancers have violated the confidentiality agreement. Here are the most common ways you might accidentally breach your NDA.
Hiring other freelancers to work alongside you
A confidentiality clause prohibits you from giving or allowing the client information to anybody else, but sometimes you might bring trusted freelancers into the project to work alongside you. If outsourcing is something you do regularly then it’s easy to overlook the project terms and forget this could violate the NDA.
For example, if you’re a designer who often works alongside a back-end developer for the more technical aspects, you could be breaching the NDA since they’re accessing parts of the project the client considers confidential—source code, designs, database rights etc.
Displaying work on your portfolio
Many freelancers rely on their portfolio for booking work and proudly exhibit their creations to prospective clients. However, most NDAs prohibit you from sharing work—even on your personal portfolio.
This prevents some freelancers from wanting to sign NDAs in the first place. No matter how excited you feel about a piece of work, displaying it on your portfolio could breach confidentiality while the project is still in stealth mode. Read the terms.
Reusing elements for another job
Sometimes you’ll work on a project that shares similarities to previous jobs you’ve done, but re-using proprietary work (code, assets etc) could violate the terms. This is why it’s important to review any documents before signing. You need to understand the ownership and rights because the client may have exclusive rights to those assets.
Using third-party tools
Using third-party tools can leave you in breach of confidentiality. A good example is Google Translate. Google’s terms allow the usage of data you submit for their algorithms. So inputting your client’s confidential data is likely to breach the terms. It’s becoming more common for freelancers to utilise third-party tools in their workflow so be mindful of the terms of usage of these tools alongside your NDA. Some tools—like ChatGPT—allow you to opt out of data usage.
All of the examples above of breaching confidentiality at work can be done by the freelancer innocuously. Excitedly adding a piece of work to their portfolio. Bringing a trusted colleague onboard. Sharing client data with a third-party tool that violates data usage terms.
You need to review the NDA prior to signing it and query any elements you’re unsure of or not comfortable with. Contracts are there to be negotiated so it’s perfectly OK to ask for changes before engaging.
What happens if there’s a breach in confidentiality at work?
This is something your NDA or contract will outline, but because a violation can cause serious damage to the client they are entitled to recover damages from you should you break the agreement. This could include any costs or expenses which the client has had to pay because the freelancer has broken the agreement.
While the sounds scary, it’s pretty standard for most contracts. It’s also why client contracts ask you to be insured. The client needs to know that—should you make a mistake—they won’t be out of pocket.
Since there’s more at stake than just the project fees (damages usually extend to additional expenses incurred from the breach), it’s a good idea to have professional indemnity insurance in place. This can contribute towards these costs.
Let’s talk about confidentiality from a data breach perspective
We’ve talked about innocent mistakes where you breach your NDA—like sharing work to your portfolio. But breaches can extend to unauthorised disclosure of client data, too. Freelancers handle lots of client data like customer names, login details, databases, etc
Disclosing client data can take many forms:
- accidentally sending your client’s data to someone else or sharing it online
- somebody gaining unauthorised access to your computer via a cyber attack
- leaving your laptop on a train, which has client files on it
Just because you’re a one-person business doesn’t mean you can turn a blind eye to cyber security—especially as there are some quick wins you can implement that will immediately bolster your security like:
- enabling multi-factor authentication
- using a password manager
- securing your connection with a VPN
- encrypting back-ups and sensitive data
The professional indemnity policy we arrange includes third-party cyber liability by default. So if your client tries to recover damages from you due to unauthorised disclosure of sensitive information due to a data breach, your professional indemnity insurance could help you respond.
Don’t just respond to the breach—mitigate the risk of it happening in the first instance
It’s clear the consequences to the freelancer can be financial. A breach can result in serious damage to the client and it’s not uncommon for them to expect you to cover those damages. This is why every freelancer exchanging their professional services for money should be insured.
However, you shouldn’t expect insurance to bail you out of these situations. You should be doing everything you can to prevent a breach from happening. It’s important you diligently review any non-disclosure agreements that clients ask you to sign so you truly understand what you’re agreeing to and the constraints you will be working to within the project. This will reduce the risk of you accidentally breaking the terms.
