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Arizona Non-Disclosure Agreement Requirements

The one exception is narrow: A.R.S.

Introduction

The one exception is narrow: A.R.S. Section 23-494 prohibits a broadcast employer, meaning a television or radio station or network, from requiring a noncompete clause as a condition of employment, and outside that carve-out, an Arizona Non-Disclosure Agreement whose confidentiality definition is broad enough to function as a disguised non-compete is tested under the common-law reasonableness standard Arizona courts apply, set out in cases like Amex Distributing Co. v. Mascari, which struck down an overly broad restriction as protecting nothing beyond the employer's bare desire to avoid competition. An Arizona NDA is otherwise an ordinary, enforceable confidentiality contract, mutual or one-way, protecting trade secrets and other sensitive information shared between parties. Trade secrets themselves are protected separately under the Arizona Uniform Trade Secrets Act (A.R.S. Sections 44-401 through 44-407), and a misappropriation claim generally must be filed within three years of when the misappropriation was discovered or reasonably should have been. Unlike California, Arizona has no statute requiring an employer to carve employee inventions made on personal time out of an assignment clause, so that scope is set entirely by what the NDA or employment agreement itself says.

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Key Things to Know

  1. 1

    Arizona has no employee invention-assignment carve-out statute. Unlike California, Washington, Illinois, and a handful of other states, nothing in Arizona law limits an NDA or employment agreement from requiring assignment of inventions an employee develops on personal time with personal resources; the scope is whatever the agreement's language says.

  2. 2

    Arizona has no general non-compete or restrictive-covenant statute. The sole statutory exception is A.R.S. Section 23-494, which bars a broadcast employer (a television or radio station or network) from requiring a noncompete clause; every other restrictive covenant, including an overbroad confidentiality clause in an NDA, is judged under the common-law reasonableness standard from cases like Amex Distributing Co. v. Mascari, which requires the restriction to protect a legitimate business interest and be no broader than necessary.

  3. 3

    Trade secret protection in Arizona runs through the Arizona Uniform Trade Secrets Act (A.R.S. Sections 44-401 through 44-407), separate from whatever the NDA itself says.

  4. 4

    A trade secret misappropriation claim in Arizona generally must be filed within three years of when the misappropriation was discovered, or reasonably should have been discovered, and a continuing misappropriation counts as a single claim rather than resetting the clock (A.R.S. Section 44-406).

  5. 5

    Mutual NDAs, where both sides share confidential information, and one-way NDAs, where only one side does, are both ordinary enforceable contracts in Arizona; which one fits depends on whether the exchange runs both directions, like a partnership or acquisition discussion, or one direction, like pitching an investor.

  6. 6

    A court applying Arizona law can award exemplary damages up to double the actual-loss-and-unjust-enrichment award for willful and malicious trade secret misappropriation, in addition to attorney fees for bad-faith claims or willful and malicious conduct (A.R.S. Sections 44-403 and 44-404).

  7. 7

    An Arizona court can order injunctive relief to stop an ongoing or threatened breach of a valid NDA, in addition to any damages the disclosure caused.

Key decisions before you file

Before you file a Non-Disclosure Agreement in Arizona, a few decisions shape the document: which option to choose and what each one means. The Non-Disclosure Agreement guide walks through them.

Open the Non-Disclosure Agreement guide

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ARIZONA NON-DISCLOSURE AGREEMENT

[Party A Name], located in [City], Arizona, and [Party B Name], located in [City], Arizona (together the "Parties"), sign this Non-Disclosure Agreement on the terms below.

  1. Purpose. The Parties are discussing [describe business purpose, e.g. a potential business relationship], and in that discussion either Party may need to share information the other treats as confidential.

  2. Definition of Confidential Information. This Agreement uses the term Confidential Information for business, technical, financial, or trade secret information, including a trade secret as the Arizona Uniform Trade Secrets Act defines it (Arizona Revised Statutes Section 44-401), that one Party discloses and marks as confidential. Four things fall outside that term regardless of labeling: information a third party discloses free of any confidentiality duty, information the receiving Party developed independently, information it already held before disclosure, and information that becomes public through no fault of its own.

  3. Obligations. The receiving Party must guard Confidential Information with at least the care a reasonable business gives its own sensitive records, use it only for the purpose above, and keep it from anyone else absent the disclosing Party's prior written consent. Its personnel and advisors may see it if they need it for that purpose and are themselves bound to confidentiality terms no weaker than these.

  4. Scope Limitation (Arizona-Specific). Unlike many states, Arizona has never passed a general statute regulating the reasonableness of restrictive covenants; the legislature has acted only once, in Arizona Revised Statutes Section 23-494, barring a broadcast employer, a television or radio station or network, from conditioning employment on a noncompete, and that narrow ban does not reach the Parties here. Absent a broader statute, Arizona courts apply the common-law reasonableness standard from Amex Distributing Co. v. Mascari, 150 Ariz. 510, 724 P.2d 596 (Ariz. Ct. App. 1986), which struck down a covenant that shielded an employer from ordinary competition rather than a legitimate business interest. Neither Party's general skill, knowledge, or experience gained here counts as Confidential Information, and this Agreement is not meant to keep either Party out of their chosen line of work.

  5. Federal Whistleblower Notice. The Defend Trade Secrets Act carries a built-in safety valve: 18 U.S.C. Section 1833(b) immunizes a person who discloses a trade secret in confidence to a government official or a lawyer solely to report a suspected legal violation, or in a sealed court filing. Skipping this notice would not undo that immunity, but it would cost the disclosing Party the Act's exemplary damages and fee provisions in a later suit, so the Parties include it to keep those remedies open.

  6. Term. The Parties' confidentiality duties run for [X years] from the signature date, except that information meeting Arizona's statutory definition of a trade secret stays protected for as long as it keeps that status.

  7. Return or Destruction. On the disclosing Party's request, or once the purpose in Section 1 has run its course, the receiving Party will return every copy of the Confidential Information or certify that it has destroyed it, whichever the disclosing Party prefers.

  8. Remedies. Money rarely fixes a leak of trade secret or sensitive information, so the non-breaching Party may seek an injunction against an actual or threatened breach under the Arizona Uniform Trade Secrets Act's injunctive relief provision, Section 44-402. Arizona law also lets a misappropriation claimant recover actual loss and unjust enrichment, doubled if the misappropriation was willful and malicious, plus attorney's fees under Sections 44-403 and 44-404, all subject to the Act's three-year discovery-based limitations period in Section 44-406.

  9. Governing Law. Arizona has no statute like California's Civil Code Section 1646 supplying a default choice of law, so this Agreement settles the point: Arizona law governs it, without regard to Arizona's own conflict-of-law rules that might point elsewhere.

  10. Miscellaneous. An electronic signature binds the Parties just as a handwritten one would, under the Arizona Electronic Transactions Act (Arizona Revised Statutes Section 44-7001 et seq.) and the federal ESIGN Act (15 U.S.C. Section 7001). If a court finds one clause unenforceable, it should sever only that clause and leave the rest in force. The Parties' mutual promises here supply the consideration needed for a binding contract.

[Party A Signature] ____________________ Date: __________ [Party B Signature] ____________________ Date: __________

Arizona Requirements for Non-Disclosure Agreement

Definition of Confidential Information (Arizona Revised Statutes Section 44-401 et seq., Arizona Uniform Trade Secrets Act)

Clearly defines what constitutes confidential information under Arizona law, including trade secrets as defined in the Arizona Uniform Trade Secrets Act.

Federal Trade Secret Protection (18 U.S.C. Section 1836 et seq., Defend Trade Secrets Act)

Acknowledges federal protection of trade secrets under the Defend Trade Secrets Act, which provides federal jurisdiction for trade secret misappropriation and remedies including injunctive relief and damages.

Term of Confidentiality (Arizona Revised Statutes Section 12-548, written contract limitation, and Section 44-406, trade secret statute of limitations)

The Agreement leaves the confidentiality term as a fillable number of years, chosen with an eye to Arizona's six-year limitation period for an action on a written contract (A.R.S. Section 12-548) and its three-year limitation period for a trade secret misappropriation claim (A.R.S. Section 44-406). Information meeting the statutory definition of a trade secret remains protected for as long as it keeps that status, independent of the fillable term.

Exclusions from Confidentiality (Arizona Revised Statutes Section 44-401, paragraph 4, definition of trade secret)

Section 44-401(4) grounds the exclusion of publicly known or readily ascertainable information by defining a trade secret as information that derives value from not being generally known and is the subject of reasonable secrecy efforts. It does not itself enumerate independently developed information or information rightfully received from a third party as exclusions; those are standard NDA drafting conventions layered on top of the statutory trade secret definition.

Permitted Disclosures (Arizona Rules of Civil Procedure, Rule 45, Subpoenas)

Outlines circumstances where disclosure is permitted, including compliance with an Arizona court subpoena issued under Rule 45, which sets the procedure and protections for compelled production of information.

Federal Whistleblower Immunity (18 U.S.C. Section 1833(b), immunity from liability for confidential disclosure of trade secrets)

Includes the immunity notice required by the Defend Trade Secrets Act, which protects an individual who discloses a trade secret in confidence to a government official or attorney to report a suspected violation of law, or in a sealed court filing.

Injunctive Relief (Arizona Rules of Civil Procedure, Rule 65, Injunctions)

Provides for injunctive relief in case of breach, consistent with Rule 65's requirements that an injunction describe the restrained conduct in reasonable detail and, generally, that the applicant post security.

Electronic Signatures (Arizona Revised Statutes Section 44-7001 et seq., Arizona Electronic Transactions Act, and 15 U.S.C. Section 7001 et seq., Electronic Signatures in Global and National Commerce Act)

Acknowledges the validity of electronic signatures under both Arizona's Electronic Transactions Act and the federal ESIGN Act for executing the NDA.

Severability (Arizona common law principles of contract interpretation)

Ensures that if any provision is found unenforceable under Arizona law, the remainder of the agreement remains valid and enforceable.

Remedies and Damages (Arizona Revised Statutes Section 44-403, damages for misappropriation)

Specifies available remedies for breach, including actual loss and unjust enrichment damages, a reasonable royalty in lieu of other measures, and exemplary damages up to twice the award for willful and malicious misappropriation, as permitted under the Arizona Uniform Trade Secrets Act.

Attorney's Fees (Arizona Revised Statutes Section 44-404, attorney fees)

Provides for recovery of reasonable attorney fees by the prevailing party for a bad faith misappropriation claim, a bad faith motion to terminate an injunction, or willful and malicious misappropriation, consistent with Arizona statutory provisions.

Federal Copyright Protection (17 U.S.C. Section 101 et seq., Copyright Act)

Acknowledges that federal copyright protection for original works of authorship exists independently of, and alongside, whatever confidentiality obligations the NDA itself imposes on those works.

Federal Patent Considerations (35 U.S.C. Section 102, conditions for patentability, novelty)

Addresses how disclosure can affect patent rights under 35 U.S.C. Section 102, Conditions for patentability, novelty, as amended by the America Invents Act. An inventor's own public disclosure can still start a limited grace period or create prior art depending on timing, so confidentiality under the NDA can matter to preserving patent rights.

Compliance with Federal Securities Laws (15 U.S.C. Section 78j(b) and 17 C.F.R. Section 240.10b-5, Securities Exchange Act provisions on insider trading)

Ensures compliance with federal securities laws when confidential information includes material non-public information about a publicly traded company, since trading on or tipping such information can violate Section 10(b) and Rule 10b-5.

Data Privacy Compliance (Arizona Revised Statutes Section 18-551 et seq., notification of breach of security system)

Addresses compliance with Arizona's data breach notification law if confidential information includes personal information of Arizona residents, as defined in Section 18-551.

Assignment and Successors (Arizona common law principles regarding assignment of contracts)

Specifies whether the NDA may be assigned and ensures it is binding on successors and assigns, consistent with Arizona contract law principles.

Frequently Asked Questions

A Non-Disclosure Agreement in Arizona is an ordinary contract in which one or both parties agree to keep specified information confidential. It can be mutual, where both sides share confidential information, or one-way, where only one side does. Trade secrets shared under the agreement are also separately protected by the Arizona Uniform Trade Secrets Act (A.R.S. Sections 44-401 through 44-407) regardless of what the NDA itself says.

There is no general Arizona statute barring it. Arizona has only one statutory noncompete ban, A.R.S. Section 23-494, and it applies solely to broadcast employers such as television and radio stations and networks. Outside that narrow carve-out, an Arizona NDA whose confidentiality definition is broad enough to functionally stop someone from working in their field is instead reviewed under the common-law reasonableness standard, and a court can strike or narrow a restriction that protects nothing beyond the employer's desire to avoid competition.

Only a narrow one. A.R.S. Section 23-494 prohibits broadcast employers from requiring a noncompete clause as a condition of employment; it does not apply to other industries or to NDAs generally. For everyone else, Arizona courts apply a common-law reasonableness test, illustrated in Amex Distributing Co. v. Mascari, which requires a restrictive covenant to protect a legitimate business interest and be no broader in scope, time, or geography than necessary to do so.

A trade secret misappropriation claim under the Arizona Uniform Trade Secrets Act generally must be brought within three years after the misappropriation is discovered, or after it reasonably should have been discovered with reasonable diligence (A.R.S. Section 44-406). A continuing misappropriation is treated as a single claim, not a new one each time it recurs. A separate breach-of-contract claim over the NDA itself follows Arizona's ordinary written-contract limitations period.

It can, unless the agreement itself says otherwise. Arizona has no statute like California's Labor Code Section 2870 carving employee inventions made on personal time and with personal resources out of an assignment clause. Whether an Arizona NDA or employment agreement reaches those inventions is purely a matter of how the assignment clause is written and negotiated.

It depends on whether confidential information will flow in both directions or only one. A mutual NDA fits a two-way exchange, such as a merger, partnership, or joint-venture discussion where both sides disclose sensitive information. A one-way NDA fits a one-directional exchange, such as pitching a business plan to an investor who is not sharing anything confidential back. Both forms are equally enforceable in Arizona; the choice is about which structure matches the actual relationship.

No. An Arizona NDA is an ordinary contract, not a formal instrument like a will or power of attorney, so it does not require notarization or witnesses to be valid. It only needs the standard elements of a valid contract: an offer, acceptance, and consideration, along with signatures from the parties being bound.

The non-breaching party can seek injunctive relief to stop an ongoing or threatened disclosure, along with damages caused by the breach. If the disclosed information also qualifies as a trade secret, the Arizona Uniform Trade Secrets Act provides an additional, independent basis for relief, including actual-loss and unjust-enrichment damages, exemplary damages up to double that award for willful and malicious misappropriation, and attorney fees in bad-faith or willful-and-malicious cases (A.R.S. Sections 44-403 and 44-404).