An Alabama Non-Disclosure Agreement (NDA) is a legally binding contract frequently used by employers and designed to safeguard their sensitive business information from being disclosed. It establishes a confidential relationship between the parties, aiming to secure intellectual property and maintain trust.

This document operates under the jurisdiction of Alabama laws and regulations, ensuring the protection of trade secrets within the state. However, if the agreement is breached and the confidential information is utilized across state borders, the Federal Trade Secrets Act would come into effect.

Governing Laws: Alabama Trade Secrets Act (Title 8, Chapter 27).
Statute of Limitation: The plaintiff has two years to sue the defendant once misappropriation is discovered (Ala. Code § 8-27-5).
Definition of Trade Secret (Ala. Code § 8-27-2):

A “trade secret” is information that:

a. Is used or intended for use in a trade or business;

b. Is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process;

c. Is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret;

d. Cannot be readily ascertained or derived from publicly available information;

e. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and

f. Has significant economic value.

Are NDAs Enforceable in Alabama?

Yes, NDAs are enforceable in Alabama. However, they must meet certain criteria to be valid. State courts typically enforce NDAs if they are reasonable in scope, time, and geographic restriction and if they protect legitimate business interests such as trade secrets, confidential information, or proprietary knowledge. [1]

If trade secret misappropriation occurs, remedies include injunctive relief, recovery of profits and damages, attorney’s fees for bad faith, and exemplary damages for willful misconduct, with potential criminal penalties for intentional actions. [2]