A Utah Non-Disclosure Agreement (NDA) is a legal document crucial for businesses to protect confidential information. It prevents employees, partners, and other entities from sharing or misusing trade secrets and other sensitive business information. The signing parties agree to maintain confidentiality and not divulge the protected information to third parties.
Utah NDA Laws Overview
- Governing Laws: Uniform Trade Secrets Act. (Utah Code § 13-24-1 — 13-24-9)
- Statute of Limitation: The deadline for plaintiffs to initiate legal action for misappropriation is three years. (Utah Code § 13-24-7)
- Trade Secret Definition (Utah Code § 13-24-2(4)):
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, 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 Utah?
Yes, NDAs are enforceable in Utah in most cases. Businesses can use them to protect trade secrets and other confidential information that gives them a competitive advantage, but the NDA must only protect legitimate business interests.
Employers should note some of the state’s restrictions. Utah passed legislation in 2024 that prevents employers from forcing employees to sign NDAs as a condition of employment if the NDA contains provisions relating to sexual misconduct. [1] Any NDA containing these terms is unenforceable. This law applies to all NDAs entered into on or after January 1, 2023.
Furthermore, employees and employers can concur on confidentiality provisions in a settlement agreement that state law would otherwise prohibit, but the employees can back out of the settlement agreement within three days of signing it.
