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What is a Maryland Non-Disclosure Agreement?

A Maryland non-disclosure agreement (NDA), also known as a confidentiality agreement, is designed to create a confidential relationship that stops employees and independent contractors from exposing your company secrets to competitors or the public. A Maryland non-disclosure agreement should be specifically worded to ensure enforceability. Before drafting an NDA or signing one presented to you, you should seek legal advice from a qualified law firm.

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Maryland State Laws

Maryland has the Maryland Uniform Trade Secrets Act, Md. Code, Com. Law §§ 11-1201 through 11-1209 . The purpose of this Act is to provide specific regulations for non-disclosure agreements and trade secrets.

In addition to defining what a business may consider a trade secret, the Maryland Uniform Trade Secrets Act also provides limitations and explains the right to damages that a business may be entitled to if the NDA is violated.

For additional protection, use the NDA in combination with a Maryland non-compete agreement .

Definition of “Trade Secrets”

In section 11-1201 of the Maryland Uniform Trade Secrets Act, “trade secret” is defined as information such as a formula, pattern, compilation, program, device, method, technique, or process that has actual or potential monetary value because the general public doesn’t have the information and it’s not something that is easily discovered by another business for use. In short, it is information that gives the business a competitive edge.

How to Write a Maryland Non-Disclosure Agreement

To write a basic Maryland non-disclosure agreement, first review the Maryland Uniform Trade Secrets Act. Although this will help you better understand the requirements of protecting your confidential materials, it is still not a substitute for legal advice. You can save your template in Microsoft Word (.docx) for easy editing.

  • The first paragraph in the NDA identifies the Disclosing Party and the Receiving Party. Then, it explains the scope of the document: to prevent the misappropriation of trade secrets and confidential materials. It generally includes an effective date for the agreement as well.
  • Define trade secrets according to Maryland law. The Maryland Uniform Trade Secrets Act defines a trade secret as information such as a formula, pattern, compilation, program, device, method, technique, or process that has actual or potential monetary value that provides a business with a competitive edge. The information cannot be publicly known and it may not be something easily discoverable by others in the industry.
  • Information exempt from trade secret status. Examples of information that may be exempt from trade secret status may include information made publicly known through no fault of the receiving party, something created or discovered by the receiving party before being provided to the disclosing party, information learned by the receiving party by a legitimate means other than through the disclosing party or the disclosing party's agent, or by sharing the information after receiving written approval from the disclosing party.
  • Obligations of the receiving party. Examples include ensuring that the information remains in the strictest confidence, the information remains fully restricted without written permission from the disclosing party, and that the receiving party does not use the information for their benefit without the written consent of the disclosing party.
  • Relationship clause. A relationship clause is helpful for certain Maryland non-disclosure agreements as it states the document contains no language that makes either party an employee, joint venturer, or partner of the other.
  • Jurisdiction clause. This clause is used to set Maryland law as the governing law for the agreement.
  • Severability clause. This clause is used to keep the remainder of the NDA enforceable if one clause of it is found by a Maryland court to be invalid.
  • Integration clause. This clause is used to state that the parties agree that the NDA expresses the parties’ complete understanding of the parties as it relates to the subject matter presented and that the agreement overrides all prior proposals, agreements, representations, and understandings. It also states that the agreement can only be amended in writing and that the amendment must also be signed by the parties to become effective.
  • Waiver clause. A waiver clause states that a party's failure to exercise any rights presented in the NDA does not preclude them from exercising prior or subsequent rights.

An NDA should include a signature line as well as the printed name for the Disclosing Party and the Receiving Party as well as a space for the date. Each party should receive a copy of the executed document.

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