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A non-disclosure agreement (NDA), also known as an NDA or a confidentiality agreement, is a contract that prevents one party from releasing secret information binds a recipient of secret information, including trade secrets or proprietary business information, to outside parties. If the party violates the non disclosure agreement, they could be liable for damages. A non-compete agreement should often be used with an NDA to prevent a business or individual from performing competitive activities in the same industry.
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.
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 fo the people other than those selected to have access for “limited purposes.”
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. In order 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.