A California Non-Disclosure Agreement (NDA) is a legally binding contract that protects sensitive information and trade secrets. This can encompass various data, including business strategies, client lists, financial data, and technological innovations. NDAs empower you to assert control over who can access and share your confidential information while fostering trust in your business relationships.
Parties entering an NDA acknowledge their shared duty to safeguard confidential data, enabling open collaboration while securing valuable assets. A comprehensive understanding of California’s non-disclosure laws and regulations will give you the knowledge to make informed decisions regarding protecting your valuable information.
California NDA Laws Overview
- Governing Laws: Uniform Trade Secrets Act (§§ 3426 – 3426.11).
- Statute of Limitation: The plaintiff has three years to sue after the misappropriation is discovered (§ 3426.6).
- Definition of Trade Secret (§ 3426.1(d)):
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Are NDAs Enforceable in California?
Yes, NDAs are enforceable in California, provided they meet certain legal requirements. To be valid, they must protect legitimate business interests, such as trade secrets or confidential information, and must be reasonable in scope, duration, and geographic limitations. However, California law imposes restrictions on NDAs, particularly regarding workplace harassment and discrimination claims.
The Silenced No More Act (SB331) extends NDAs to all workplace discrimination, harassment, and retaliation claims, banning clauses that restrict disclosing factual information about allegations. [1] Claimants can request anonymity, while non-disparagement clauses must allow discussions of unlawful acts.
Amendments to the California Fair Employment and Housing Act (FEHA) prevent employers from requiring agreements that limit disclosure of unlawful workplace conduct as a condition of employment, except for voluntary, informed NDAs in settlement agreements that offer value and legal counsel opportunities. [2]
