Confidentiality, NDA’s and CRN Registration

Confidentiality, NDA’s and CRN Registration

Several issues routinely arise with improperly proposed non-disclosure agreements (NDA’s) pursuant to CRN registration.  What follows is not legal advice, and describes some CRN issues which CAMMAR has encountered and has remedied as needed.    

In the absence of an NDA, confidentiality rules are still in place for professional engineers.  Subject to public safety, professional engineers are bound to confidentiality in accordance with governing Canadian legislation, regardless of whether an NDA is in place or not.  Some clients require formal NDA’s, and some do not, irrespective of client size or scope of work.  

Below is a summary of some common concerns and remedies that CAMMAR has seen with respect to improperly proposed NDA’s:

 

Disclosure vs Safety

NDA’s cannot properly attempt to place confidentiality above public safety.  NDA’s often improperly propose to prevent disclosure despite legislative, legal, and regulatory requirements.  Confidentiality practiced by regulators and other professionals with respect to public safety is governed by jurisdictional statutes, not by any NDA.  

Design information associated with pressure equipment is confidential and legislation guards against unwarranted disclosure.  In very unlikely circumstances, regulators and other professionals are required to disclose confidential information pursuant to public safety, once all pertinent information is considered and following written notice.

Protected design information includes but is not limited to conditions of CRN registration, design justification, codes of construction, dimensions, design pressures and design temperatures.  Notwithstanding these protections, safety is paramount; regulators and other professionals rightly consider public safety to be more important than confidentiality.

For example, in rare situations regulatory directives can publicly recall CRN registered pressure equipment to the satisfaction of a regulator by publishing enough design detail to effectively withdraw such pressure equipment from use, without the permission of any owner.

In the unlikely event that a regulator or other professional becomes aware that pressure equipment was registered by mistake and puts public safety at risk, regulators would be happy to correct mistakes by working with industry pursuant to compliance and safety.

The public places their trust in regulators and other professionals to help maintain public safety.

NDA’s cannot properly attempt to place confidentiality above public safety.

 

Retention vs Return of Confidential CRN Design Information

Many improperly proposed NDA’s require the return of all copies of confidential information upon completion or termination of work that relies on it.  This requirement is contrary to practices of professional engineers.   

Any confidential information used as a basis for engineering opinions, recommendations, letters, reports, or other documentation requires proper retention of supporting information, not mandatory destruction or return.

NDA’s cannot properly undermine engineering work by attempting to remove the foundations upon which it relies.

 

Reverse Engineering vs CRN Work

Many improperly proposed NDA’s require that no reverse engineering be used when acquiring CRN registration.  Proper pressure boundary design analysis includes in depth application of engineering theory to ascertain whether pressure equipment designs can safety retain pressure, and to determine if all code and regulation requirements have been met.

NDA’s cannot properly exclude reverse engineering from work to be performed pursuant to CRN acquisition.

 

Indemnification and Ownership

Many improperly proposed NDA’s attempt to assign responsibility for pressure equipment designs to those that are not owners.  

Clientele are not obliged to follow advice they receive and, notwithstanding any clientele attestations of conformance to a quality control program, it is difficult to ascertain that clientele adhere to received advice.  Indemnification associated with quality control, quality assurance, or performance besides pressure retention, is the responsibility of the pressure equipment owner, whether they are the manufacturer, distributor, seller, or end user.  Owners are responsible for indemnifying their own pressure equipment.

Owners have both care and control over a pressure equipment designs; owners include manufacturers, distributors, sellers, and end users.  Statutes ascribe responsibility for pressure equipment to owners and an NDA cannot reassign that responsibility to anyone that does not have care and control.

To acquire a CRN, confidential information must necessarily be disclosed to a pressure equipment regulator.  NDA’s cannot properly require that the client is indemnified from any losses associated with the quality or performance of their pressure equipment, losses associated with the satisfaction of their customers, or harm to clientele that is associated with disclosure of their confidential information to regulators.

 

Governing Law

Many improperly proposed NDA’s surprisingly suggest that only foreign courts govern NDA’s though only Canadian statutes and regulations govern the use and application of CRNs, and the use of CRN registration is a unique feature of pressure equipment safety in Canada.

A clear reference in an NDA noting that Canadian law relating to public safety shall always be upheld and takes precedence over non-existent or contradictory foreign law, seems to be reasonably necessary, and is the approach we take.

 

Summary

CAMMAR fully supports confidentiality rules and public safety.  It makes no sense for a professional engineering company such as CAMMAR to agree to anything that could compromise confidentiality rules, or contradict public safety requirements, professional engineering practice, legislated responsibilities of ownership, and governing law. 

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