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What is a Pennsylvania Non-Disclosure Agreement?

A Pennsylvania non-disclosure agreement (NDA), also known as a confidentiality agreement, may be a legally binding contract signed by new employees or contractors that enables a business to protect their trade secrets or business interests.

Pennsylvania law says that the employment relationship creates certain duties owed to the employer as a condition of employment. One of those duties is not revealing sensitive information or trade secrets.

A Pennsylvania non-disclosure agreement is often included as part of an employment contract or employment agreement. If you're a business entity who wants to write an NDA or if you're an employee or independent contractor being asked to sign one, you should get legal advice from a law firm that practices employment law.

Pennsylvania State Laws

Pennsylvania adopted the Uniform Trade Secrets Act. This Act, found at 12 PA Cons Stat §§ 5301 through 5308 sets out the scope of how non-disclosure agreements are treated as well as how certain key terms are defined under the law.

Pennsylvania’s Uniform Trade Secrets Act also explains the types of damages that a business may be entitled to receive if someone violates the NDA, how the secrecy of the information may be preserved , and the statute of limitations on the agreement.

For more protection of trade secrets, use this form together with a Pennsylvania non-compete agreement .

Definition of “Trade Secrets”

Pennsylvania non-disclosure agreements are important contracts that protect the best interests of a business: its trade secrets. Under 12 PA Cons Stat § 5302 , a trade secret is defined as information such as a formula, drawing, pattern, compilation such as a customer list, a program, a device, a method, a technique, or a process with its own actual or potential financial value.

This value comes from the fact that it isn’t information that is generally known to the public and it isn’t something that another business would discover in the normal process of business that they could use for themselves. The business claiming the information as a trade secret must take reasonable steps to keep the information private.

How to Write a Pennsylvania Non-Disclosure Agreement

To write a basic Pennsylvania non-disclosure agreement, you should first review the Pennsylvania Uniform Trade Secrets Act. This will help you better understand what can and cannot be covered by a non-disclosure agreement. However, this is not a substitute for legal advice. To ensure the enforceability of your NDA, you should get legal advice. You can save your template in Microsoft Word (.docx) for easy editing.

  • The first paragraph begins by identifying the parties. The Disclosing Party is the business that has trade secrets to protect. The Receiving Party is the third-party who will have access to the information. The scope of the document is also included in this paragraph. The scope is the purpose. The purpose is to prevent the misappropriation of the confidential information. An effective date is also included.
  • A definition of "trade secret" according to the Pennsylvania Uniform Trade Secrets Act. Pennsylvania Uniform Trade Secrets Act defines a trade secret as information such as a formula, drawing, pattern, compilation, program, device, method, technique, or process with actual or potential financial value. This value exists because the information isn't publicly known and isn't available to the benefit of other businesses. Your business must take reasonable steps to protect the information.
  • Exemptions to confidential status. There will be times when information is not considered confidential. Common exemptions may include information made public through no fault of the Receiving Party, a discovery or creation of the Receiving Party before it is provided to the Disclosing Party, information legitimately learned by the Receiving Party but without the assistance of the Disclosing Party or their agent, or information shared by the Receiving Party with the written permission of the Disclosing Party.
  • Obligations of the receiving party. Examples of common obligations of the receiving party may include maintaining the confidential information in the strictest of confidence, restricting access to the information, and not using the information to their benefit without first receiving written permission from the disclosing party.
  • Relationship clause. A relationship clause is beneficial for many Pennsylvania non-disclosure agreements as it states that nothing within the agreement deems that either party is a partner, joint venturer, or employee of the other for any reason.
  • Jurisdiction clause. A jurisdiction clause names Pennsylvania laws as those which will govern the agreement.
  • Severability clause. This clause is used to keep the remainder of the NDA enforceable if a Pennsylvania court holds that one clause within the agreement is invalid.
  • Integration clause. This clause states that the agreement expresses the complete understanding of the parties regarding the subject matter and supersedes all prior proposals, agreements, representations, and understandings. It also states that the NDA may only be amended in writing and that the parties must sign the amendment as well.
  • Waiver clause. This clause states that a party's failure to exercise any rights within the NDA does not waive any prior or subsequent rights.

The Disclosing Party and Receiving Party must sign the document as well as print their names. The signatures should be dated. The parties should receive a copy of the finalized NDA for their records.

Download a PDF or Word Template

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