North Carolina Non-Disclosure Agreement

The North Carolina Non-Disclosure Agreement (NDA) is a state-specific contract that is used in situations where a company or individual will be sharing confidential information (called “Trade Secrets”), and needs to ensure the party(s) learning the information do not share it with anyone unless specifically given permission to do so in the document. Because Trade Secrets have economic value to a company and are that company’s property, an NDA is not required for bringing a case against an individual who wrongly used a trade secret. However, signing an NDA can not only aid the company’s chances of winning a case put before a court, it can make recovering damages and having an injunction issued far easier.

A Real-Life Example of an NDA in Action

Non-Disclosure Agreements are regularly-used legal contracts, particularly in the business world. There are many real-life case examples that demonstrate the usefulness of NDAs for anyone or any business with confidential information to protect.

It is important to keep in mind that similar to all contracts, an NDA is not fool-proof. However, it does allow for the Disclosing Party to take necessary action against the Receiving Party if they breach the terms of the agreement.

Take the real-life case example of Google’s NDAs. Google is a company that is well-known for using NDAs to prohibit employees from disclosing information about its up-and-coming releases, algorithms, and other trade secrets. The majority of its employees comply with the terms of the agreement, making it highly-effective in preventing disclosures.

That being said, there are rare cases of an employees who breach it. The company treats NDA breaches very seriously, so when it was discovered that a Google employee had breached the terms of the company’s NDA by sharing classified information about a Google product, they subsequently fired him.

While the NDA ultimately did not stop the employee from disclosing the confidential information, it did give Google the legal right to dismiss the employee for doing so. Without an NDA in place, Google would not necessarily have the legal grounds to fire the employee, and may even be forced to keep him on board despite the severe breach of trust. This case exemplifies why an NDA is so useful—even in cases where it ends up being breached.

To learn more about the benefits of executing an NDA, it is helpful to refer to this table of 5 Non-Disclosure Agreement Benefits.

Trade Secret Law

Before entering into a binding NDA in the state of North Carolina, it is essential that the parties involved understand how the state views and prosecutes cases of stolen confidential information, more commonly called “misappropriation of trade secrets.” The law, Article 24 “Trade Secrets Protection Act” consists of six (6) sections, which are briefly outlined below.

  • § 66-152: “Definitions” – Gives the definitions for the terms “Misappropriation,” “Person,” and “Trade Secret”.
  • § 66-153: “Action for misappropriation” – States “the owner of a trade secret shall have remedy by civil action for misappropriation of his trade secret”.
  • § 66-154: “Remedies” – Lists the remedies for misappropriation.
  • § 66-155: “Burden of proof” – States what the complainant needs to prove in court.
  • § 66-156: “Preservation of secrecy” – Outlines the court’s efforts to help protect the trade secrets from being further compromised during litigation.
  • § 66-157: “Statute of limitations” – Establishes the requirement for the complainant to bring a case of misappropriation within three (3) years of discovering it.

How to Write

Step 1 – To begin the process of making a North Carolina Non-Disclosure Agreement, download the agreement in either Adobe PDF or Microsoft Word. Ensure both parties agree to the the limitations and allowances stated in the contract. If either party disagrees, provisions can be added, removed, or edited accordingly.

Step 2 – The Date that the contract will come into into effect should then be entered. Following this, the Disclosing Party should write their Full Name and Address into the provided fields. The Receiving Party should do the same on the line directly below.

Step 3 – On the second page (which is also the last page of the NDA), each party must write their Printed Names, company Titles, the Dates they will be signing the NDA and their Signature under the subtitle that applies to them: either “DISCLOSING PARTY” or “RECEIVING PARTY”.

So long as the instructions provided here are followed and the contract itself complies with state NDA laws, the Non-Disclosure Agreement will now be in full binding effect.