California Non-Disclosure Agreement Template

The California Non-Disclosure Agreement (NDA) is the official legal contract used for preventing valuable information from being shared with third (3rd) parties. It can be used in a wide range of scenarios to protect information from being exposed, including discussing business mergers, pitching newly developed technology to investors, or the hiring of new employees that will have access to highly secret (and valuable) information. Being an official form, it can be used in the court of law to receive compensation from any damages that resulted from the leaked secret(s).

What is a California Non-Disclosure Agreement?

A California non-disclosure Agreement is a document used for securing confidential information commonly discussed in business interactions. While the document has come under fire for being used by some as a means for unjustly keeping people “quiet” about an individual or company’s wrongdoings, the contract remains an important tool in a company’s arsenal for business transactions. When it is used properly, this document allows for productive deliberation without the fear that the secrets disclosed will be used against the company or person sharing the information.

To provide an example of how the legal instrument can be used, imagine there is a new (fictitious) tech company called “ABC” that is pitching a breakthrough product to a panel of investors. The investors would need considerable confidential information before deciding whether the product garners their money.

Unless there is an NDA in place, there would be nothing stopping the investors from using the learned information to their advantage, or leaking it to the public. However, if ABC requires investors to sign an NDA before hearing their pitch, the NDA would protect their information by legally restricting the investors from sharing it with anyone not specifically listed in the contract.

Trade Secret Law

California adopted the Uniform Trade Secrets Act in 1984, which was a federal act meant to be adopted by the states in an effort to make trade secret laws consistent country-wide.

Laws: Title 5, “Uniform Trade Secrets Act” (§§ 3426 to 3426.11).pdf

Statute of Limitations (§ 3426.6): Those that had their trade secrets misappropriated (stolen) have three (3) years since the date of discovery to bring a case.

Definition of “Trade Secret” (§ 3426.1): Can include information that exists as a “formula, pattern, compilation, program, device, method, technique, or process” that:

  1. Is valuable (or has the potential of being valuable) from it not being known (or easily known) to the general public and those that could use the information to benefit themselves, and
  2. The entity that owns the information is making a reasonable effort to maintain the information’s secrecy.