A private company in Arizona wanted to bring me on as an independent contractor to research what they need to do for (ISO/etc) standards compliance. I was asked to sign an NDA before learning details; I reviewed the NDA, rejected it, offered instead my word not to steal their stuff, and was accepted. The CEO is moving away from NDA's, anyway. But there may be a few people who have already signed it, and this worries me, because I wonder if the company can get in trouble later just for trying to contractually take away someone's rights. Legal compliance isn't my department (I'm not a lawyer), but it's close enough to my other duties that I would write up a cost-benefit proposal for paying a lawyer to write up a new (safe) NDA that can replace the old NDA (which ought to be terminated if there's any risk to letting it remain in effect).
The document combines the NDA with a non-compete. The early (NDA) sections restrict the use of company documents for "the pursuit of profit or employment with" followed by a list of potential clients, including "Legal representatives of ANY kind". The late (non-compete) sections have nothing to do with documents anymore, but (switching out the company name for "EMPLOYER") does have this clause:
If CONSULTANT's employment with EMPLOYER terminates for any reason, the CONSULTANT shall not, for a period of one year from the date of termination, have any business dealings whatsoever, either directly or indirectly or through corporate entities or associates with any customer or client of EMPLOYER or its subsidiaries or any person or firm which has contacted or been contacted by EMPLOYER as a potential customer or client of EMPLOYER;
No restrictions (of industry) apply here, but taken in context with the NDA section (which implies intended clients), any legal representatives who were ever approached as potential clients (even if they immediately said "not interested" and refused to hear more), up to every legal representative anywhere if included in a marketing campaign that broad, would be off-limits for business dealings of all kinds. Such as, for instance, hiring a lawyer to review a contract before employment.
No lawyer reviewed this contract with him before he began using it:
"I did not have a lawyer draft it actually, and I just added a ton of shit in there and wrote it in about 5 minutes as an afterthought late at night about a month ago."
I asked a lawyer from out-of-state (about this and other clauses), who noted that he was not giving legal advice, but this particular clause was unconscionable and (unless Arizona had some weirdshit rules) illegal. This is not the worst contract I've seen written by a non-lawyer, and I expect to see more people
trying failing to create an enforceable contract because they think it will save them the money of hiring a lawyer; I believe the theoretical aspect (not my specific situation, which is more of an example) will be generally useful for employers to be aware of what penalties their company may risk facing later on. I don't expect to be lucky enough that this precise clause has come up in prior case law; I'm hoping for other instances of illegal clauses, so I can include links in a risk analysis to show any general trend of "this has or has not been problematic for similar cases".