Make a New York Non-Disclosure Agreement

New York State Laws

The non-disclosure and non-compete laws that govern trade secrets are fairly lax when it comes to how long they may last.  However, certain laws were recently passed related to the use of non-disclosure agreements stating that they may not be used to prohibit sexual harassment claims.

There are no specific statutes that govern trade secrets. Instead, New York relies on case law as referenced above. Another unique factor in New York is how trade secrets may be protected for an unlimited amount of time.

For added legal protection, businesses can use a New York non-compete agreement .

Definition of “Trade Secrets”

Although there no statute in New York specifically governs or defines trade secrets, New York courts have held that a trade secret is any “formula, pattern, device or compilation of information which is used in one’s business, and which gives [the business] an opportunity to gain an advantage over competitors who do not know or use it.” Ashland Mgt. v. Janien, 82 N.Y.2d 395, 407 (1993) . The court looks for six specific elements to determine if something is a trade secret:

1. The extent to which the information is known outside of the business;
2. The extent to which the information is known by employees and others involved with the business;
3. The extent of the measures taken by the business to keep that information secret;
4. The value that information creates for the business and could create for competitors;
5. The amount of money or effort put in by the business to develop the information; and
6. How easy or difficult it would be for another business to properly acquire or duplicate the information. Id.

How to Write a New York Non-Disclosure Agreement

To write a basic New York non-disclosure agreement, you should first review the basic information provided about New York trade secrets as well as what sorts of claims cannot be covered by an NDA. Additionally, because New York law governs NDAs under the same laws as it uses to govern noncompetes, it is important to get legal advice to ensure that your agreement is properly drafted so that you can be assured of its enforceability.

You can save your template in Microsoft Word (.docx) for easy editing.

• The first paragraph identifies the parties. The Disclosing Party is the business with the trade secrets and confidential information that must be protected. The Receiving Party is the third-party who will have access to the information. Then, the scope of the document is set: to prevent the misappropriation of the confidential information. An effective date for the contract is also listed in this paragraph.
• A definition of "trade secret." Generally, "trade secret" is defined according to state law.
• Exemptions to confidential status. Common exemptions include information that is made public at no fault of the receiving party, something created or discovered by the receiving party before it is provided to the disclosing party, something learned by the receiving party by legitimate means without the assistance of the disclosing party or their agent, or something shared by the receiving party with the written consent of the disclosing party.
• Obligations of the receiving party. Common obligations include maintaining the confidential status of the information, carefully restricting access to the information, and not using the information for their benefit without written approval from the disclosing party.
• Relationship clause. A relationship clause may be beneficial to some New York non-disclosure agreements because it states that nothing within the agreement deems either party a partner, joint venturer, or employee of the other for any purpose.
• Jurisdiction clause. A jurisdiction clause states that the laws of New York govern the agreement.
• Severability clause. A severability clause states that if a New York court finds a provision within the NDA invalid, the rest of the agreement will remain enforced.
• Integration clause. An integration clause states that the NDA expresses the complete understanding of the parties related to the subject matter and overrides all previous proposals, agreements, representations, and understandings. It also states that the NDA may only be amended in writing and only if the amendment is signed by both parties.
• Waiver clause. A waiver clause states that a party's failure to exercise any rights from the NDA does not waive previous or subsequent rights presented.

Both the Disclosing Party and Receiving Party should sign and print their names. The signatures should be dated. Each party should receive a copy of the finalized document for their records.