On the Job

Non-Disclosure Agreements in Yachting: What to Look Out For...

1 July 2021By Louisa Beckett
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Written by

Louisa Beckett

Louisa Beckett is the former editor of Motor Boating, ShowBoats International, and Southern Boating magazines, and a longtime contributor to Dockwalk. Over her career, she has written about a wide variety of vessels ranging from Sea-Doos to superyachts, and has had many adventures on the water, including riding in a U.S. Coast Guard “rollover” boat in heavy surf off Cape Disappointment, Washington.

It’s a growing trend for a non-disclosure agreement to be part of your crew employment contract — but before you sign it, be sure to read the fine print.

Superyacht owners around the world are a widely varied lot, but there’s one thing most of them agree on: the desire to keep their yacht and its connection to them confidential. “The owners are obsessed with confidentiality,” says maritime attorney John Leonida, formerly a partner at Clyde & Co, now a Ph.D. Researcher and Consulting Superyacht Industry Advisor at LP Squared Limited. “There is among most owners the desire that the yacht is their private place. The place where they can escape without the fear that other people will see what they do.”

These high and ultra-high net worth individuals expect the professionals with whom they entrust their yacht — including yard and marina workers, sales and charter brokers, management company staff, and most of all, captains and crew — to keep their mouths shut when it comes to the vessel’s value, location, and itinerary, along with the identities and activities of everyone they invite to come aboard.

“A good seventy-five percent of all the crew employment contracts we’re seeing have some level of a confidentiality agreement,” says Liam Dobbin, managing director, wilsonhalligan Yacht Recruitment. “I think in a year or two it will be the norm.”

“Non-disclosure agreements are just about ubiquitous now,” says Michael Reardon, president/yacht manager, Reardon Yacht Consulting. “Typically, you are not allowed to say anything about the client that’s not already in the public domain.”

What is an NDA and Why is it Important?

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While the Maritime Labour Convention, 2006 (MLC) and the yacht’s flag state may govern other provisions in a crew or Seafarer’s Employment Agreement, a non-disclosure agreement, or NDA, typically is a separate clause requested by the yacht owner, the management team, or attorney. “An NDA is enforced by land-based law over maritime flags and authorities. It should be written with the word of the law and countersigned by both parties involved,” Dobbin says, adding, “A problem can occur with jurisdiction of law, [for example] sending an NDA from an American company to someone in France who is an individual, not a company. This can be where the NDA states the law of which country applies…. Ultimately it is a confidentiality agreement, which is legally binding contract. As long as everything that is confidential is defined, there should be no confusion.”

The NDA may consist of a clause inserted into the crewmember’s employment contract, or it could be a separate agreement. Some NDAs are short and sweet, prohibiting crew from disclosing the names of the yacht owner, vessel, and guests on board, but others can be extremely specific and exhaustive. “Some owners take it very seriously, and some are more relaxed,” reports Yacht Manager Franc Jansen, founder and director JMS Yachting.

“A good seventy-five percent of all the crew employment contracts we’re seeing have some level of confidentiality agreement.”

A detailed NDA will spell out the privileged information that the crewmember agrees not to make public, including items such as the yacht’s general arrangement, financial statements, expenditures, and other records; the owner’s assets (such as artwork) that may be on board; any business dealings by the owner or guests that the crewmember may learn about in the course of their duties, and any communications by phone, email, or Internet by the owner and guests that the crewmember may be privy to while aboard.

More and more crew employment NDAs also are including a prohibition against disclosing the owner’s “intellectual property.” This really comes into play when the crewmember is involved with a new yacht build project that the owner wants to be kept confidential. “Intellectual property is the new property. It’s the new thing that everybody’s worried about,” says maritime attorney Michael Moore, founding partner Moore & Co.

Security Concerns On Board

While some charter yachts encourage their crew to post photos of the vessel in scenic settings (with permission) as a part of their marketing strategy, making public any photography, video, or audio recordings of the yacht and its guests — who may be high-profile — is specifically prohibited by most NDAs. “People want to know that they can be on board the yacht without the fear that the steward who is serving the Champagne is going to tell the National Enquirer,” Leonida says.

Public leaks about a yacht’s guests and itinerary don’t have to be deliberate, like selling the info to a tabloid, however. In this age of social media, they can be the unintended result of a seemingly harmless post. “Crew posting things on Facebook is something that happens with unnerving regularity,” says Jansen. “I know some owners have banned crew using social media…. Some owners have security teams who are monitoring the social media of the crew.” He recalls an incident in which this was a factor. “I once was asked to replace a whole deck crew,” he says. “They went wakeboarding with local girls in the owner’s million-dollar tender and posted pictures of it.”

By making photos such as these public, crew unwittingly could jeopardize their yacht’s security. If the photos posted on social media include the yacht’s name, either on its transom, a nameboard, a “tender-to” — or even on a crew uniform — and the setting is easy to identify, anyone viewing it could put two and two together and know exactly where the yacht is or recently has been. If the viewer also knows who owns the yacht, it could put that owner and his family or guests in danger of being kidnapped or worse. “This industry is the most gossipy industry that I’ve ever been involved with,” Leonida says. “Everyone knows who owns all the boats.”

Take, for example, the notorious case of the 85.6-meter Oceanco M/Y St. Princess Olga (now M/Y Amore Vero). Between 2014 and 2016, when the yacht allegedly was owned by wealthy Russian businessman Igor Sechin, his wife, Olga, posted frequent photos of herself aboard. Paparazzi tracking her posts were able to use the photos to identify her, the yacht, and its precise location at least half a dozen times. From this information, they predicted the yacht’s itineraries — and posted them online. “There’s a very serious aspect to it,” said Leonida. “This is floating real estate that is carrying very specific families, very specific individuals. The crew have to respect that….”

Confidentiality is a core part of a yacht’s security program. “You never disclose where the yacht is, where the yacht is going, the itinerary, or who is on board,” Jansen says. In fact, some yachts’ crew handbooks even caution crewmembers not to wear their yacht uniform when off duty.

Truth or Consequences

In reality, the experts agree that non-disclosure agreements rarely, if ever, stop crewmembers from signing an employment contract. “Not once has a captain or crewmember…questioned the confidentiality agreement,” Leonida says.

“What are you going to do?” Moore says. “If you refuse to sign, they will just get another employee.” Nevertheless, it’s important for you to read the NDA carefully before signing it and be prepared to abide by all its terms.

“Most people look at these things and do not think they are important…. They have a very cavalier attitude toward things like non-disclosure agreements,” Moore says. “You really need to be very careful when you sign the [NDA]…. They are enforceable, and they are contracts.”

What Happens if I Violate an NDA?

Intentional or not, if an NDA is violated, in most cases “the consequences are a very basic dismissal,” says Leonida. However, he cautions, “If someone is harmed as a result of that breach of confidentiality…a particularly angry owner could seek financial recompense, but I’ve never seen that happen,” says Leonida. “...It can be a life-altering experience if they find out you violated the NDA,” Moore says. Most crew wouldn’t have financial resources to defend themselves against a yacht owner’s lawsuit.

There’s one case when crew are compelled to violate the NDA — if they witness an act or know of contraband on board that’s legally prohibited in the country where the vessel is located. “Confidentiality agreements [are not] freebies for the owner to cover up things that should be in the public domain and are forced to be disclosed to the authorities,” Leonida says. He cites a case in which, “…there were weapons on board a particular yacht and the local authorities were notified by the captain, and that was the absolute right thing to do.” Likewise, he says, “If a guest brings drugs aboard and the authorities ask, crew must tell or they are complicit.”

“More and more crew employment NDAs also are including a prohibition against disclosing the owner’s ‘intellectual property.’”

It’s essential to read all the fine print in an NDA, because some dictate that crew alert the yacht’s owner or management company before going to the authorities about anything related to the owner or vessel. “That places the onus on the employee…,” he says. In that case, Leonida recommends, “The right thing to do is to speak to a lawyer and say, ‘What should I do here?’”

Under normal circumstances, however, the experts all recommend that crew simply abide by any confidentiality agreements they sign, keep their mouths shut, and keep their interactions with the yacht and its guests offline. As Moore says, “The best event is that you don’t talk.”

Here’s an example of a comprehensive Non-Disclosure Agreement that might be inserted into a new yacht crewmember’s employment contract:

Confidentiality, Nondisclosure and Use of Social Media:

1. The Seafarer hereby acknowledges and agrees that he may not during or after the termination of his employment use or disclose to anyone (other than in the proper course of employment) any information of a confidential nature relating to the Employment Company, Yacht Owning Company and their agents, charterers and guests or relating to their business or trade secrets including, without limitation, confidential information relating to financial information, commercial information, personal information, sales and marketing information, methods of business dealing, pricing policies, business plans, unpublished financial information of all kinds, customer lists, details of supply contracts, market research and technical information. This provision shall not apply to information that is in the public domain (other than information in the public domain as a result of his default or unauthorized disclosure). Information of a confidential nature may include, but is not limited to, documents, notes, logs, diaries, print-outs, spreadsheets, records, emails, texts, voice mail recordings, transcripts, certificates, photographs, video recordings, and audio recordings, whether in hard copy or electronic format.

2. The Seafarer shall not disclose the Yacht’s itinerary and operational movement, except when required in the course of his duties.

3. The Seafarer shall use his best efforts to prevent the disclosure of any confidential information or trade secrets. Particular care must be taken as to the content of posts made on social networking internet sites and apps. When using social media, the Seafarer is not authorized to speak or post on behalf of the Yacht, the Yacht Owning Company or the Captain or hold himself out as their agent without prior express permission. Photographs or video or audio recordings taken by the Seafarer that identify the vessel, guests, the Yacht Owner(s) or other crew members while they are working aboard the vessel may not be posted to any social media accounts without prior written authorization from the Yacht Owning Company.

4. Any unauthorized disclosure to a third party of confidential information of whatever nature about matters as aforesaid will render the Seafarer liable to disciplinary action which may result in summary dismissal and/or to civil… proceedings to restrain him from disclosing the information to a third party, or from making personal use of it, or for damages if loss or damage to the Yacht Owning Company or others results from such disclosure.

5. All confidential records, documents and other material together with any copies or extracts thereof made or acquired by the Seafarer in the course of his employment shall be and remain the property of the Employment Company or Yacht Owning Company and must be returned upon termination of employment.

6. Any query received from the media by the Seafarer must be passed immediately to the Captain, the Employment Company or the Yacht Owning Company. The Seafarer may not respond on behalf of the Yacht to any press or media inquiry.

7. The provisions of this Section shall survive the termination of the Seafarer’s employment without limit in time.

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