CainIV - 6:23 am on Mar 22, 2010 (gmt 0)
Releasing a client list can expose a company to both reverse engineering and reverse reference. I have even caught a glimpse of companies openly emailing for that information, so that they could it as their own references for potential clients.
By knowing more about the nature of the campaigns company X has executed, they can then try and take credit for the work.
I think overall in my experience, for the most part, it is best when SEO companies are required to sign an NDA and non compete.
A good SEO doesn't need to "know" the industry to begin learning about the industry. Which is essentially what happens when any new campaign starts in a new genre anyway.
I would eliminate companies that are actively working on any campaigns considered 'too close for comfort' in the same respective genre as well.