Make a Colorado Non-Disclosure Agreement

Colorado State Laws

The State of Colorado has specific laws that govern both non-disclosure agreements and trade secrets. Protection of a trade secret is the most common reason that a business asks employees or independent contractors to sign an NDA.

C.R.S. § 7-74 is known as the Uniform Trade Secrets Act . It covers the preservation of secrecy, the statute of limitations, and other important terms related to the NDA. For a Colorado NDA to be legally binding, it must comply with this Act.

Colorado non-disclosure agreements are often used along with a non-compete agreement . A non-compete agreement is used to limit the sort of business the employee may enter into if they leave the company that asked them to sign the non-compete.

Definition of “Trade Secrets”

Colorado’s definition of a “trade secret” is found in C.R.S. § 7-74-102 as “the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value.” The business must take actions to show that they are protecting the information from being available for the people other than those selected to have access for “limited purposes.”

How to Write a Colorado Non-Disclosure Agreement

To create a basic Colorado non-disclosure agreement, you should first review Colorado law. However, there is just no substitute for obtaining legal advice from a qualified lawyer to ensure the enforceability of the document.

• The opening paragraph identifies the Disclosing Party (you and your business) along with your full address and the Receiving Party (your employee, the contractor, or the other person or business) as well as their full address, and the purpose of the document (to prevent the unauthorized disclosure of confidential information and trade secrets). You should also include an effective date.
• The definition of trade secrets as it is defined by Colorado law. The Colorado Uniform Trade Secrets Act defines a trade secret as all or any part of scientific or technical information, design, process, procedure, formula, improvement, confidential, business or financial information, a listing of names, a list of address, telephone numbers, or other information related to any business or profession that is secret and of value. You must be able to show that you are protecting the information from being made public.
• Explain how the receiving party shall be made aware that they are being given confidential information. For example, a file will be stamped "CONFIDENTIAL."
• Explain which type of information will not be treated as confidential. For example, information that is publicly known through no fault of the receiving party, something discovered or created by the receiving party before it was told to the disclosing party, something that the receiving party learned by legitimate means other than through the disclosing party or their agent, or something that was shared by the receiving party after obtaining the disclosing party's written approval.
• The obligations of the receiving party. Examples include keeping confidential information in the strictest confidence, restricting access to that information, and not using confidential information for their benefit unless they have the written approval of the disclosing party.
• A relationship clause. This clause explains that nothing listed in the NDA makes either party a partner, joint venture, or (in some instances) an employee of the other for any purpose.
• A jurisdiction clause. This gives you the ability to choose Colorado as the state that will govern the document.
• A severability clause. This clause explains that if a Colorado court finds that a certain part of the NDA is invalid, the remainder of the agreement will remain enforced.
• An integration clause. This clause explains that the parties agree that the NDA overrides any previous proposals, agreements, representations, and understandings related to the subject matter. It also states that the NDA cannot be amended except for in writing and then only if the amended version is signed by both parties.
• A waiver clause. The waiver clause protects both parties by stating that even if either party fails to exercise any of their rights in the NDA, they are not waiving any prior or subsequent rights.

Finally, include space for the parties to print and sign their names, including their roles from the NDA (Disclosing Party or Receiving Party), their professional titles, and a space for the date they each sign. The parties should receive a copy of the complete document for their records.