Nevada Non-Disclosure Agreement
The Nevada Non-Disclosure Agreement (NDA) supports companies and individuals to pass on sensitive information to another party with a reasonable amount of confidence that this party, called the “Receiving Party”, will not feel compelled to share the information any further on.
The contract is especially valuable in business, as it allows companies to:
- Share information with a prospective buyer that they would like to shield from the public or others with a prospective buyer,
- Give newly hired employees access to highly restricted data within the company, and
- Share a new product’s plans with a client before obtaining a patent.
These are just a few of the many examples that highlight how an NDA may be used. Regardless of the situation in which an NDA is executed, the party executing it (the “Disclosing Party”) can take comfort in the fact that it has all the essentials for ensuring the company can protect itself against disclosures. It also arms the company with legal remedies that may be taken in the event a disclosure is made.
What Are the Consequences of Breaching an NDA in Nevada?
Anyone who breaches an NDA in the state of Nevada is bound by the consequences stipulated in the the state’s NDA laws, namely NRS 600A.035. So long as the theft of the trade secret meets the criteria listed in this same provision, the party will be consider guilty of a category C felony. The punishment will involve:
- Imprisonment in the state prison for a minimum term of at least one (1) year and a maximum of ten (10) years, and in certain cases,
- An additional fine that may be an amount of up to ten-thousand dollars ($10,000).
Trade Secret Law
Nevada’s Chapter 600A (§§ 010 – § 100) addresses all vital matters connected to the protection of trade secrets in the state. Nevada is one (1) of the forty-nine (49) states to adopt the Uniform Trade Secrets Act, so its Trade Secret provisions are fundamentally based off of those in the Act. There are, however, some notable differences. This makes it necessary for anyone who will be a party to an NDA in the state of Nevada to refer to the state’s particular provisions, as opposed to those of the general Uniform Trade Secrets Act. To ensure the right provisions are referred to, a brief overview of all twelve (12) sections of Chapter 600A can be found below.
- NRS 600A.010: States the title of Chapter 600A, namely, the “Uniform Trade Secrets Act”).
- NRS 600A.030: Provides the definitions of “Improper Means,” “Misappropriation,” “Owner,” “Person,” and “Trade Secret”.
- NRS 600A.032: States that the owner (of a trade secret) must make a worthy attempt at keeping the trade secret(s) from being exposed to outsiders.
- NRS 600A.035: Lists the six (6) things that an individual must do in order for their actions to be considered, in the eyes of the law, to be theft of a trade secret.
- NRS 600A.040: Notes the types of cases in which the court will impose an injunction to stop a trade secret from being used by a third (3rd) party.
- NRS 600A.050: Establishes the criteria the court uses to evaluate whether or not the complainant is entitled to receive damages.
- NRS 600A.055: States how the court views trade secrets that have been posted online.
- NRS 600A.060: Clarifies the three (3) situations in which the court will pay for the winning party’s attorney’s fees.
- NRS 600A.070: Lists the steps the court will take to protect trade secrets from being exposed during litigation.
- NRS 600A.080: Provides the statute of limitations for bringing a case of misappropriation, which is three (3) years.
- NRS 600A.090: Explains the place of Chapter 600A in relation to other laws within Nevada’s Legislature.
- NRS 600A.100: States that cases prior July 1st, 1987 do not come under the Trade Secret Act.
How to Write
Step 2 – Next, mandatory information must be provided by both parties on the first (1st) page. That is:
- The full Date (i.e., the Day, Month, and Year),
- The Disclosing Party’s Full Name and Address, and
- The Receiving Party’s Full Name and Address.
If possible, both parties are recommended to sign as their company, as doing so can move liability away from them personally and onto their business.
Step 3 – Likewise to filling out the mandatory information on the first (1st) page of the NDA, both parties must also fill out mandatory information on the second (2nd) page—specifically at the bottom of the page. The parties will need to:
- Provide their Titles within their companies (leave blank if not applicable),
- State the Date they will be writing their signature, and
- Sign their names.
The contract will become effective once all components of all three (3) steps have been attended to.