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Looks like the NDA question may have to be taken up here? - > A Domo spokeswoman says the company had asked Mr. Biederman to sign a nondisclosure agreement bef

by cdubzzz 10y ago

Looks like the NDA question may have to be taken up here? - > A Domo spokeswoman says the company had asked Mr. Biederman to sign a nondisclosure agreement before providing financial records, but that he refused to do so.

philsnow 10y ago
I don't see anywhere in subsection 220 (I haven't read the rest) that allows Domo to require this of Biederman. > The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other or further relief as the Court may deem just and proper. Unless the court has told Biederman that he needs to sign that NDA, it doesn't seem that he has to and that Domo is still acting against subsection 220.
- spinlock 10y ago
  An NDA seems reasonable in this case. The article did state that Biederman objected to some of the stipulations which asked him to give up some of his shareholder rights. I suspect the lawyers will make some more money off this and then a more reasonable NDA will be signed.
  - protomyth 10y ago
    > An NDA seems reasonable in this case. Why is an NDA reasonable? I am really curious of the mechanics of a startup that would make this different from any other company under that law.
    - potatolicious 10y ago
      Without knowledge of the law in this specific case, it still feels like there are reasonable grounds that a private, not-publicly-traded company should be allowed to keep its financials private. Though of course, any such NDA should be revealed ahead of time, including the precise language of the NDA, so that investors (and yes, employees who receive equity in lieu of cash are investors) make a fully informed decision.
      - jessaustin 10y ago
        ...any such NDA should be revealed ahead of time, including the precise language of the NDA... Is this a common thing with NDAs? ISTM it's rare that during the hiring process one would receive a folder containing all the NDAs one might potentially be asked to sign while working at a firm. One might receive an "initial" NDA, to sign before starting, but every time there is an ownership change one can expect a new round of NDAs, because apparently NDA terms are a rapidly-evolving area of contract law.
        toast0 10y ago
        Requiring a new NDA as a condition (but not prom is) of continued employment is one thing; requiring it as a condition of exercising a statutory right is another.
      - toufka 10y ago
        The law seems to indicate otherwise.
      - bpicolo 10y ago
        Pretty hard for him to convince anybody to buy said shares if they can't in any way see those financials.
        adrr 10y ago
        They can buy 1 share or he could give them 1 share.
        bpicolo 10y ago
        That's true, sure seems like it shouldn't be necessary though huh?
        zwily 10y ago
        He may not be able to sell or transfer any shares.
      - 10y ago
    - pbreit 10y ago
      Because a startup is private?
      - protomyth 10y ago
        The quoted law doesn't look to make any special provision for that. I'm not sure if that's an oversight or intentional.
      - kbenson 10y ago
        But as part owner of the company through stock, the former employee is free to disclose whatever they like, unless specifically contracted to do otherwise, aren't they? Don't want all your private company secrets legally broadcast to the public? Be careful who you grant shares of ownership to. Can't trust your employees? Guess you have to find something besides ownership to incentivize them with.
      - rhizome 10y ago
        Does the word "equity" mean anything anymore?
  - frugalmail 10y ago
    An NDA would be reasonable if they had the option. Since he's legally entitled to the financials why would he agree to limit his rights for nothing in exchange?
  - mcherm 10y ago
    Sure, of COURSE asking him to sign an NDA is reasonable. But when he chooses NOT to sign it (for whatever reason, it doesn't matter why) what then? The law in DE states that he has a right to see the data anyway if he has a valid reason, and "valuing my shares for tax reasons" is a valid reason. So NDA or not, the company needs to show him the numbers.
  - mannykannot 10y ago
    Assuming (purely for the sake of argument) that a case might be made for some form of NDA, it seems that the law does not permit the company to avoid its responsibility on the grounds that no NDA has been signed.
dboreham 10y ago
I think we'd need to see the wording for that NDA to understand why he refused. For example, many NDAs use wording along the lines of "must not disclose or USE..". It would be hard to agree not to "use" the information being disclosed in this case. There could have been other unacceptable conditions attached beyond the basic requirement to refrain from public disclosure.
- frugalmail 10y ago
  He should refuse any NDA he doesn't get anything in exchange for. if the startup is already required to give him the financials then he's not getting anything "more" so would he agree to give up his rights?

by cdubzzz 10y ago

philsnow 10y ago

I don't see anywhere in subsection 220 (I haven't read the rest) that allows Domo to require this of Biederman. > The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other or further relief as the Court may deem just and proper. Unless the court has told Biederman that he needs to sign that NDA, it doesn't seem that he has to and that Domo is still acting against subsection 220.

spinlock 10y ago
An NDA seems reasonable in this case. The article did state that Biederman objected to some of the stipulations which asked him to give up some of his shareholder rights. I suspect the lawyers will make some more money off this and then a more reasonable NDA will be signed.
- protomyth 10y ago
  > An NDA seems reasonable in this case. Why is an NDA reasonable? I am really curious of the mechanics of a startup that would make this different from any other company under that law.
  - potatolicious 10y ago
    Without knowledge of the law in this specific case, it still feels like there are reasonable grounds that a private, not-publicly-traded company should be allowed to keep its financials private. Though of course, any such NDA should be revealed ahead of time, including the precise language of the NDA, so that investors (and yes, employees who receive equity in lieu of cash are investors) make a fully informed decision.
    - jessaustin 10y ago
      ...any such NDA should be revealed ahead of time, including the precise language of the NDA... Is this a common thing with NDAs? ISTM it's rare that during the hiring process one would receive a folder containing all the NDAs one might potentially be asked to sign while working at a firm. One might receive an "initial" NDA, to sign before starting, but every time there is an ownership change one can expect a new round of NDAs, because apparently NDA terms are a rapidly-evolving area of contract law.
      - toast0 10y ago
        Requiring a new NDA as a condition (but not prom is) of continued employment is one thing; requiring it as a condition of exercising a statutory right is another.
    - toufka 10y ago
      The law seems to indicate otherwise.
    - bpicolo 10y ago
      Pretty hard for him to convince anybody to buy said shares if they can't in any way see those financials.
      - adrr 10y ago
        They can buy 1 share or he could give them 1 share.
        bpicolo 10y ago
        That's true, sure seems like it shouldn't be necessary though huh?
        zwily 10y ago
        He may not be able to sell or transfer any shares.
    - 10y ago
  - pbreit 10y ago
    Because a startup is private?
    - protomyth 10y ago
      The quoted law doesn't look to make any special provision for that. I'm not sure if that's an oversight or intentional.
    - kbenson 10y ago
      But as part owner of the company through stock, the former employee is free to disclose whatever they like, unless specifically contracted to do otherwise, aren't they? Don't want all your private company secrets legally broadcast to the public? Be careful who you grant shares of ownership to. Can't trust your employees? Guess you have to find something besides ownership to incentivize them with.
    - rhizome 10y ago
      Does the word "equity" mean anything anymore?
- frugalmail 10y ago
  An NDA would be reasonable if they had the option. Since he's legally entitled to the financials why would he agree to limit his rights for nothing in exchange?
- mcherm 10y ago
  Sure, of COURSE asking him to sign an NDA is reasonable. But when he chooses NOT to sign it (for whatever reason, it doesn't matter why) what then? The law in DE states that he has a right to see the data anyway if he has a valid reason, and "valuing my shares for tax reasons" is a valid reason. So NDA or not, the company needs to show him the numbers.
- mannykannot 10y ago
  Assuming (purely for the sake of argument) that a case might be made for some form of NDA, it seems that the law does not permit the company to avoid its responsibility on the grounds that no NDA has been signed.

dboreham 10y ago

I think we'd need to see the wording for that NDA to understand why he refused. For example, many NDAs use wording along the lines of "must not disclose or USE..". It would be hard to agree not to "use" the information being disclosed in this case. There could have been other unacceptable conditions attached beyond the basic requirement to refrain from public disclosure.

frugalmail 10y ago
He should refuse any NDA he doesn't get anything in exchange for. if the startup is already required to give him the financials then he's not getting anything "more" so would he agree to give up his rights?