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A Non-Disclosure Agreement is a legal document used to prevent confidential information from being revealed. It’s usually used to stop employees sharing trade secrets, proprietary knowledge, or other private data disclosed by the owner.
Last Update April 7th, 2026
Also Known As
Confidentiality Agreement
Trade Secret Agreement
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An NDA (non-disclosure agreement) is a legal agreement between two parties on the use of confidential information. There are two main parties who are usually involved with an NDA agreement, ‘the owner’ of the data and ‘the recipient’.
A generic NDA will require the recipient of the information to keep it secret and prevent the data from being shared.
This legal document requires the recipient of the information to keep it secret and prevent the data from being shared. This includes making sure that the data is not leaked accidentally.
One of the parties that can form an NDA agreement is the federal government. Completing an NDA with the government must follow the Code of Federal Regulations (48 CFR § 227.7103-7).
Before you start writing your own in-depth confidentiality agreement, it is useful to have a good idea of how your document will look. View our standard sample NDA template below to see how your text should appear once completed.
NDAs are powerful tools. However, they do not give unlimited control over what an employee can say or do.
In certain states, NDA enforceability is limited, such as in California (SB-331) and Washington (RCW 49.44.211).
In these states, employers cannot use an NDA or similar clause to stop workers from talking about unlawful acts in the workplace, including:
Federal labor law (National Labor Relations Act) also restricts how employers can word confidentiality and non-disparagement provisions in severance agreements.
Overly broad NDA clauses may be unenforceable. This includes any clauses that could stop workers from discussing their
When you create an NDA, you must be aware of how the Defend Trade Secrets Act (DTSA) affects your agreement. In certain situations, you may have to include a DTSA whistleblower immunity notice.
Here's a quick table illustrating what you should know:
| Point | Explanation |
|---|---|
| When to use it | Add a DTSA whistleblower clause if your NDA covers trade secrets and involves employees, contractors, or consultants. |
| What DTSA does | The Defend Trade Secrets Act gives people immunity when they confidentially share trade secrets with authorities or a court to report suspected unlawful conduct. |
| Why the notice matters | You can only claim extra DTSA remedies, such as exemplary damages and attorney's fees, if you include this immunity notice in the NDA or a related confidentiality agreement. |
| Effect on the NDA | The DTSA clause does not void the rest of the NDA. It simply confirms that legally protected whistleblowing to authorities is permitted. |
| What to include | When drafting NDAs for staff or service providers, insert a short DTSA paragraph that clearly states these whistleblower rights and protections. |
An employee Non-Disclosure Agreement is the one of the most common types of this document. This type of NDA allows the employee to access confidential information that they agree to keep private.
However, NDAs can be used more broadly than that across a number of different circumstances. The importance of a Non-Disclosure Agreement cannot be overstated whenever you plan to:
However, it’s also important to be aware of what a NDA cannot do. This document cannot be used to:
NDAs will often vary depending on the necessities of the business or individual. Another factor is that data could be exchanged between all parties involved, rather than just simply passed from owner to recipient.
In the context of employment and severance agreements, some states and federal rules limit how far confidentiality and non-disparagement clauses can go. This is the case in states like New York (Gen. Oblig. Law § 5-336(1)), and is also reflected in National Labor Relations Board decisions like McLaren Macomb.
Make sure to look up the specific rules governing the use of NDAs in your state.
In general, there are three main types of NDAs that are used by individuals and businesses. These include:
A violation of an NDA occurs when one of the parties leaks information that is meant to stay confidential. If the leaked information qualifies as a trade secret, the party could face serious consequences under the DTSA.
Under this act, you can sue in federal court if someone steals or misuses your trade secret.
You can ask for the money you lost, plus any unfair profit they made. In some cases, they must also cover your attorney's fees.
If the conduct is found to have been willful and malicious, you can sue for up to double this amount.
Even standard confidentiality breaches (not trade secrets) may trigger contract remedies (injunctions, damages) under state law.
You can ask a court to order the other party to stop using or disclosing the information and to pay damages for any losses you suffered.
In practice, many businesses start with a cease and desist letter that demands the other party stop the breach and fix the situation before going to court.
Writing your own NDA form is not as tricky a process as it may appear. However, you need to make sure that you include all the details necessary to make sure that your confidential information is properly protected.
To function as intended, a confidentiality agreement will need to include the following critical information:
As noted above, one of the most important details an NDA needs to clearly define is what kind of confidential information is being shared and legally binds the recipient to its protection. This kind of data could involve:
Follow these instructions to create a well-written Non-Disclosure Agreement. You can also use our free NDA template as a guide when writing your own version of the document.
The beginning of your document establishes who the parties are in the agreement. In a unilateral agreement, there are 2 types of parties:
In a mutual agreement, both are disclosing and receiving. This part gives information about the person or business involved.
This part explains that both parties want to begin a possible business opportunity of mutual interest. The opportunity may involve confidential information regarding products or data, and the receiving party cannot share this information.
The agreement must have the signatures of the parties and representatives. With the signatures, it becomes a legally binding document.
Using a pre-prepared NDA template can help speed up the process of writing your own document.
This can help by laying out the key elements you’ll need to successfully protect your confidential information by allowing you to add the specific details of your case to each essential section.
Lawdistrict’s step-by-step form can help you through each part of the process. It will help you address the most important considerations on your document and create a professional and useable printable PDF of your NDA.
Once written, you can have it reviewed by a legal professional to guarantee it has been created correctly.
Any violation of a trade secret that is done in more than 1 state can be brought to trial in federal court.
If it is done in only a single state, you must check the laws of that state before proceeding with the legal process.
Refer to the table below to review the trade secrets act of your state.
A Non-Compete Agreement is a document that’s similar to an NDA. They complete a similar function, but they are not identical.
Here are the differences and similarities between the 2 agreements.
| Non-Compete Agreement | Non-Disclosure Agreement |
|---|---|
| An employee cannot work for a competitor | Employees are able to work for competitors |
| Employees cannot give proprietary information | Employees cannot give proprietary information |
| Restricted in numerous states, such as California (CA Business & Professions Code §16600) and Washington (RCW 49.62) | Enforceability varies by context. Certain clauses can be limited or invalidated when overly broad, as explained in NLRB guidance |
| Confined to employment | Not confined to any industry |
Employers can use both of these agreements to their advantage to prevent important information from getting out.
If you’re still unsure regarding some details you’ll need to know before creating a comprehensive and legally water-tight NDA, don’t panic. We have found the answers to some of the most frequently asked questions to help make the process a little clearer.
Read on below to learn more about the ins and outs of these kinds of legal documents.
Yes, when you write an NDA and have it signed by both parties it is legally binding agreement as of that moment (or the dates specified when the agreement is to come into effect).
At that point onwards the recipient is legally liable for the protection of any and all of the confidential information that is shared with them by the owner under the form’s terms.
If you happen to break an NDA you could be sued by the owner. However, in order to do so, the owner must be able to demonstrate that you broke the terms written in the NDA form.
They will need to provide evidence of whom the information has been shared with, when the breach of confidentiality happened, and how it was carried out.
An NDA can last for as long or as short a time as is needed to ensure the protection of your confidential information. However, in most cases, the duration of an NDA will last between 1-5 years.
When you write your own document this will normally be outlined in the non-disclosure agreement form. When filling in LawDistrict’s online NDA template you will be prompted to specify the terms of disclosure, which will regulate how long the agreement will run for.
