Make a Tennessee Non-Disclosure Agreement

Tennessee State Laws

Tennessee adopted the Uniform Trade Secrets Act, Tenn. Code. Ann. §§ 47-25-1701 through 47-25-1709 , to govern non-disclosure agreements and to define what sort of information is considered to be a “trade secret.” The law also explains how a business may preserve the secrecy of the information they wish to protect.

To provide the best possible protection of business secrets, businesses should use this document along with a Tennessee non-competition agreement .

Definition of “Trade Secrets”

A Tennessee non-disclosure agreement is a contract that is meant to protect the trade secrets of a business. Tennessee’s Uniform Trade Secrets Act defines a “trade secret” as information that doesn’t have a definite form. It can include, but also is not specifically limited to, data of a technical, non-technical, or financial nature; a formula; a pattern; a compilation; a program; a device; a method; a technique; a process; or a plan that has its own economic value.

Its value may be actual or potential. The reason why the information is valuable is that it gives the business a competitive edge since it’s not something that the public knows or something so easy to determine that another business could somehow figure out on their own during their normal business practices. Any information that a business seeks to protect through a Tennessee non-disclosure agreement must have its privacy protected using reasonable means.

How to Write a Tennessee Non-disclosure Agreement

To write a basic Tennessee non-disclosure agreement, first read the Tennessee Uniform Trade Secrets Act. This will help you better understand the type of information that you can protect using an NDA. However, this is not a substitute for obtaining legal advice. Talking with an attorney can help ensure that your agreement is enforceable if the Tennessee courts must step in because of a dispute. You can save your template in Microsoft Word (.docx) for easy editing.

• The first paragraph identifies the parties and their roles. The Disclosing Party is the business looking to protect their business interests by protecting their trade secrets. The Receiving Party is the third-party who will have access to the information. The scope or purpose of the agreement is also explained: to prevent the misappropriation of the trade secrets. An effective date is also included as well as other important information such as geographical restrictions and time restrictions.
• A definition of " trade secret" according to Tennessee code. The Tennessee Uniform Trade Secrets Act defines a trade secret as information such as technical or non-technical information or financial data; a formula; a pattern; a compilation; a program; a device; a method; a technique; a process; or a plan with economic value that is actual or potential. This information gives your business a competitive edge in some way and isn't available to the public. It also isn't something that other businesses do in the normal course of business. Your business must take reasonable steps to protect the information.
• Exemptions to confidential status. Sometimes information used by your business will not meet the high bar required to be considered confidential. Common exemptions may include information released to the public at no fault of the receiving party, when the disclosing party gives written consent for the release of certain information, when the receiving party learns something by legitimate methods without the assistance of the disclosing party or their agent, or when the receiving party creates or discovers something before providing it to the disclosing party.
• Obligations of the receiving party. Common obligations of the receiving party in an NDA may include maintaining the confidentiality of the information to the best of their ability, restricting the access of the information, and not using the information for their benefit without first receiving written consent from the disclosing party.
• Relationship clause. Some Tennessee non-disclosure agreements benefit from the use of a relationship clause as it states that nothing within the agreement deems either party an employee, partner, or joint venturer of the other for any purpose.
• Jurisdiction clause. A jurisdiction clause is used to set Tennessee Code as the law used to govern the agreement.
• Severability agreement. A severability agreement is used to remove the singular clause that a Tennessee court may find as invalid while keeping the remaining parts of the NDA enforceable.
• 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 agreement may only be amended in writing and that it must be signed by both parties for the amendment to be completed.
• Waiver clause. A waiver clause states that a party's failure to exercise any right from the agreement does not waive any previous or subsequent rights.

The Disclosing and Receiving Party should sign their agreement and print their name. They should also date their signatures. Each party should receive a copy of the finalized agreement for their records.