I'm unclear about what he means by "Don't blindly sign NDAs". What are the risks, and what items to watch out for would be on the checklist my lawyer would ideally provide?
One Silicon Valley company that is well-known for not having a non-use clause is Intel. This means that they can use any confidential information in their own business, in any way they desire.
It's not problematic to sign an agreement like this with another startup because they are unlikely to have the time/money to start competing with you on your home turf. But big companies can squash you like a bug if they so desire.
Other reasons to carefully review an NDA:
Make sure it's bilateral, not unilateral
Check to see how long it's in effect for — usually the parties are permitted to disclose / use the info after 2-5 years
Make sure the above clause has an exception for trade secrets that are still secret (which they should not be allowed to disclose even after the expiration)
A more established eLearning company approached us to discuss potential partnering opportunities, and sent over their NDA. Note - I actually read NDA's and other legal docs before signing, to make sure nothing untoward or unexpected is included.
In the above case, they included non-compete clauses (without any limits) specifically so we couldn't compete with them.
Upon asking their (from memory) CEO "WTF?" he was rude/abrasive and that was the last we heard from them.
At a guess, they were just trying a cheap tactic to get leverage over us in some way.
Contract negotiation makes them fair. If you just sign whatever people put in front of you, you give up your rights to have a fair contract.
Also: The contract given to you probably represents the opposing lawyers wish list of all the things they wish they could have. Most/some of these things will be extremely disadvantageous to you. Just signing anything they give you means you submit to their wish list, not your own.
Blindly signing subjects you to potentially nasty term, and obligated you not to talk about certain things. This in turn can be used as leverage by the other side if things go badly.
Really, it's just don't blindly sign any agreement. Unfortunately agreements are so ponderous (clickwrap) that most people are used to doing that
Saying 'required' makes it sound like you didn't have a choice -- out of curiosity, did they have other leverage over you above getting your help on their project, and did you attempt to negotiate on this clause?
I don't doubt that non-compete clauses happen in NDAs; other people in this thread to mention seeing them. But I think they're not that common either. I've seen my share of NDAs and never seen a non-compete clause. I do get non-compete clauses in employment contracts that also include NDAs as well as invention assignments and more, but I haven't personally seen a non-compete clause in a pure non-disclosure contract, that seems abnormal. But I agree completely that one should always read their contracts carefully before signing.
Effectively, the NDA gives big co the option to force small co to, at the very least, pay lawyers $50k a month until dead or the suit is resolved in two-plus years because the NDA and facts, at the very least, left a lot of issues to dispute.