A Rhode Island Non-Disclosure Agreement (NDA) is a legally binding document that prevents a party from misusing or sharing sensitive business information without consent from the disclosing party. It obligates the receiving party to maintain confidentiality regarding trade secrets, business strategies, and other proprietary details divulged during a business relationship.
Rhode Island NDA Laws Overview
- Governing Laws: Uniform Trade Secrets Act. (RI Gen Laws §§ 6-41-1 through 6-41-11)
- Statute of Limitation: If the plaintiff becomes aware of the misappropriation, they have a time period of three years to file a lawsuit against the defendant. (RI Gen Laws § 6-41-6)
- Definition of Trade Secret (RI Gen Laws § 6-41-1(4)):
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Are NDAs Enforceable in Rhode Island?
Yes, NDAs are generally enforceable in Rhode Island. Employers can use NDAs to ensure employees protect trade secrets and other sensitive business information.
However, a 2023 law bans all employers from demanding employees to sign an NDA regarding alleged criminal behavior or civil rights violations as a requirement to remain employed or become employed. [1] The law doesn’t ban voluntary NDAs regarding these topics. Furthermore, the law doesn’t ban mandatory NDAs for all other sensitive business information.
