A Tennessee Non-Disclosure Agreement (NDA) is a legal document that protects confidential information shared between two or more parties. Companies commonly use it to safeguard sensitive data such as trade secrets, proprietary processes, and other confidential information. This agreement ensures that the receiving party can’t disclose the information to third parties without permission.

Governing Laws: Uniform Trade Secrets Act. (Tenn. Code § 47-25-1701 – 47-25-1709)
Statute of Limitation: Legal action against a violation of the agreement must be initiated within three years of the discovery of the breach. (Tenn. Code § 47-25-1707)
Trade Secret Definition (Tenn. Code § 47-25-1702(4)):

“Trade secret” means information, without regard to form, including, but not limited to, technical, nontechnical or financial data, a formula, pattern, compilation, program, device, method, technique, process, or plan that:

(A) 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

(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Are NDAs Enforceable in Tennessee?

Yes. NDAs are generally enforceable in Tennessee. However, 2018 legislation makes it illegal for an employee or a potential employee to renew or sign an NDA pertaining to sexual harassment. [1] This law is updated in Tennessee’s code. [2]

Furthermore, Tennessee enacted legislation in 2019 that renders any provision in a settlement agreement involving a government entity unenforceable if it prevents the disclosure of claim details or the parties’ identities. However, victims of sexual harassment, assault, and exploitation can keep their identities confidential. [3]