Alabama Non-Disclosure Agreement (NDA)

The Alabama Non-Disclosure Agreement (NDA) is a contract that imposes a legal requirement on an individual to keep a company’s confidential secrets to themselves. The document is frequently used in situations involving potential mergers. It is also useful in cases where a company will be exposing information that could be damaging if put in the wrong hands. If a breach of contract occurs, an NDA allows the company to take one of several legal actions, with the most popular being to sue for reparation (damages).

What Constitutes a Trade Secret?

Alabama’s trade secret laws, namely § 8-27-2, defines a trade secret as information which meets specific criteria, as the following table shows:

 Under Alabama's Trade Secret Law, the following criteria must be met in order for information to be defined as a "trade secret":
1.The information is utilized in a trade or business, or there is an intention by the party who owns the information to use it in such a way.
2.The information cannot be readily discovered in the public sphere.
3.The information is "included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process".
4.The information is not commonly known in the trade or business of the party who holds it to be a trade secret.
5.The information holds substantial financial value.
6.The party holding the information has made reasonable efforts to keep it a secret.

Trade Secret Law

Knowing Alabama’s Trade Secret Law (§§ 8-27-1 to 8-27-6) is imperative in understanding what constitutes misappropriation (stolen secrets) and the steps that can be taken after a breach of contract.

  • § 8-27-1: States that the 8-27 Chapter is in regards to the “Alabama Trade Secrets Act”.
  • § 8-27-2: Gives the definitions for Trade SecretImproper Means, and Person.
  • § 8-27-3: Describes what makes an individual liable for misappropriation of a trade secret.
  • § 8-27-4: States what can be done by the plaintiff in the case that misappropriation did occur.
  • § 8-27-5: Gives the statute of limitations; a case must be brought up within 2 years of being discovered.
  • § 8-27-6: Describes how the Trade Secret Law affects other laws.

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