Suppose someone signed an NDA at a company that does X. Generally speaking, does this typically preclude them from working on open-source projects that also do X?
NDAs are private contracts. Within the laws of the applicable jurisdiction, any terms could be part of an NDA – including terms that forbid work on related projects, including open source projects. From the perspective of a company, contributions to an open source project are not fundamentally different from working for a competitor.
Non-disclosure agreements which protect certain trade secrets or confidential information are distinct from non-compete clauses. In particular, many jurisdictions heavily regulate non-compete clauses, for example by banning them outright or by specifying a maximum duration. Even without an explicit clause, normal employment implies that employees will not compete with their employer.
It is therefore best – with our without NDAs or non-compete clauses – to limit open source contributions either
- to projects that are unrelated to employment,
- or to projects that the employer has agreed to.
NDAs without a non-compete clause do not forbid competition outright. You are generally free to work on competing projects as long as this does not result in trade secrets or covered information being disclosed. A good NDA should spell out what precisely is covered by the agreement. An NDA cannot apply to publicly available information or information that was known beforehand.
Whether the NDA might apply to a specific information is a judgement call on your part. In particular, you have to manage the risk of a legal dispute to determine whether your actions breached the NDA.
As a result it is usually unwise to sign NDAs, especially when they are excessively broad. But as they are private contracts, they can be negotiated in advance to limit their scope. On the other hand NDAs can also be a totally legitimate and proportionate legal tool, especially as part of employment or consulting. Aside from protecting trade secrets, an NDA might be necessary if you have access to personal, financial, or other sensitive information in the course of your work – but again, the NDA should spell this out.