818.501.4343November 12, 2025
Roughly one-third to one-half of U.S. employees are subject to a non-disclosure agreement (NDA) or similar instrument. Drafting a strong NDA is one of your first lines of defense against misappropriation of trade secrets and other confidential information.
However, a poorly drafted NDA can do more harm than good, especially in a litigious area like California. Take a closer look at what it takes to craft an NDA that stands up to scrutiny, and how a lawyer for employers can help you get it right.
Why NDAs Matter for Employers
Non-disclosure agreements establish a duty on the part of the recipient to maintain confidentiality. These enforceable documents can be invaluable during employment litigation if trade secrets are disclosed or misused. In such situations, organizations can use them to seek damages or injunctive relief.
Strong NDAs can deter employees, contractors, or third parties from misusing your intellectual capital. But in California, courts often scrutinize NDAs for being too broad.
Agreements that are used to stifle whistleblowing or as an attack against wronged employers are not only unenforceable, but they can also open the door for costly litigation. That is why it’s crucial for HR professionals and business leaders to know how to craft an NDA that is both strong and enforceable.
Key Elements of an Enforceable, Protective NDA
There are certain best practices you will want to incorporate into your NDA. Working with a lawyer for employers ensures that these elements are tailored to your business and defensible in litigation.
Define Confidential Information and Trade Secrets
Vague, blanket definitions invite challenges that the obligations are overbroad. Instead, you should describe categories or, if possible, attach a schedule of specific trade secret assets. Make sure to exclude:
- Publicly known information
- Information independently developed by the disclosing party
- Information lawfully required from third parties
- Disclosures required by law or whistleblower statutes
Implementing clear definitions will lay the framework for an enforceable NDA. If you aren’t sure where to start, partner with a lawyer for employers for guidance.
Distinguish Trade Secrets From Other Confidential Information
While all trade secrets need to be protected, not all confidential information qualifies as a trade secret. Clauses governing other confidential data may have shorter durations or narrower restrictions.
According to the California Uniform Trade Secrets Act (CUTSA), the NDA must align with statutory requirements for misappropriation claims. You’ll also need to ensure that your non-disclosure agreements are compliant with federal trade secret laws.
Avoid Inappropriate Expiration Clauses
Some employers try to limit confidentiality obligations to a fixed provision term, such as five or 10 years. However, courts have historically pushed back on NDAs that expire arbitrarily, especially where trade secrets are at issue.
For example, a court might deny a preliminary injunction because the ten-year expiration was deemed unreasonable. To avoid this, consider providing indefinite protection for trade secrets while imposing limited obligations for other confidential information.
Include Injunctive Relief or Equitable Remedies Language
Even though a contract can’t guarantee that a court will grant an injunction, including explicit language that you may seek injunctive relief or specific performance, strengthens your position. Courts may consider that language in evaluating irreparable harm.
Specify Reasonable Security Obligations
Require the receiving party to take reasonable measures to maintain confidentiality. Depending on your industry, that might include using encryption and access controls. Other measures could consist of document marking or audit trails. Make sure that you outline which specific measures the individual is required to use.
Outline Permitted Disclosures
Non-disclosure agreements must also outline what proprietary information a recipient may disclose and under what specific circumstances. For instance, exceptions could cover instances of consulting with legal counsel or when required by a court order. Whistleblower situations are another prime example.
Require Returning or Destroying Materials
Non-disclosure agreements should obligate the recipient to return or destroy all confidential information upon termination of the relationship or upon your request. Maintain detailed records to confirm that NDA signatories are compliant with these provisions.
Include Notice and Knowledge Provisions
If someone seeks to compel disclosure of confidential information, such as via a subpoena, you need to know about it. With that in mind, strong non-disclosure agreements should include notice and knowledge provisions that require signatories to provide you with written notice about such scenarios.
Similarly, you can also include provisions that permit you to supplement the NDA or designate additional secrets.
Special Considerations in California
California examines NDAs under public policy doctrines. Generally, courts will not enforce agreements that unreasonably restrain free speech, whistleblowing, or disclosures to government agencies. Under CUTSA, a party cannot use an NDA to bar someone from using information that is publicly known or generally known in the industry.
You should also be mindful of statutory protections. For example, NDAs cannot restrict claims or disclosures related to the following:
- Discrimination
- Harassment
- Whistleblower complaints
- Protected labor activity
Additionally, you will want to ensure that your non-disclosure agreement does not suppress or strip employees of wage/hour dispute rights.
When to Hire a Lawyer for Employers
You should consider hiring a lawyer for employers to handle these critical processes:
- Tailor the NDA to your industry or risk profile
- Evaluate enforceability, especially in California or other restrictive states
- Advise you on jurisdiction, choice-of-law, and forum selection clauses
- Review employee or contractor proposals
- Guide you on enforcement strategy
Partnering with a law firm that focuses on defending and advising businesses in employment matters is one of the best ways of protecting your organization using enforceable NDAs. If you’re preparing to roll out NDAs or facing disclosure challenges, it’s vital to seek out a lawyer for employers for support.
Partner With Pearlman, Brown & Wax, LLP Today
Nondisclosure agreements are a powerful tool for insulating your business and its confidential information. However, even if said information meets the criteria for being classified as a trade secret or confidential, you need a solid NDA that is both enforceable and clear.
Do you need a lawyer for employers who has experience drafting comprehensive non-disclosure agreements? The attorneys at Pearlman, Brown & Wax, LLP can help with drafting an NDA for your business that is enforceable and compliant. Our legal team can also review your existing NDAs or confidentiality agreements in place to verify that they are thorough and adequately protect confidential information. Contact us to schedule a consultation today.