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New York Non-Disclosure Agreement Requirements

New York's trade secret protection under that common-law regime traces to a specific case: the Court of Appeals decision in Ashland Management Inc.

Introduction

New York's trade secret protection under that common-law regime traces to a specific case: the Court of Appeals decision in Ashland Management Inc. v. Janien, which adopted the Restatement of Torts six-factor test for what counts as a trade secret in the absence of a codified Uniform Trade Secrets Act. A Non-Disclosure Agreement in New York is an ordinary contract in which one or both parties agree to keep specified information confidential, and it operates independently of that common-law trade secret protection. New York also has no general statute governing non-compete agreements; enforceability of any restrictive covenant, including an NDA whose confidentiality definition functions as a work restriction, is decided under the reasonableness test the Court of Appeals set out in BDO Seidman v. Hirshberg: no broader than necessary to protect a legitimate employer interest, no undue hardship on the employee, and not injurious to the public. A 2023 bill that would have banned most non-compete agreements statewide, Senate Bill S3100A, passed both legislative chambers but was vetoed by Governor Hochul in December 2023 and never became law. New York does add one protection most other states reach through their own separate statute: Labor Law Section 203-f, enacted in 2023, voids any employment-agreement clause that tries to force an employee to assign an invention developed entirely on personal time without the employer's resources, unless the invention relates to the employer's business or resulted from work performed for the employer.

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Key Things to Know

  1. 1

    New York does have an employee invention-assignment carve-out, Labor Law Section 203-f, enacted in 2023. It voids a clause in an NDA or employment agreement requiring an employee to assign an invention developed entirely on their own time without the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business or resulted from work performed for the employer.

  2. 2

    New York has never adopted a trade secret statute of any kind, unlike most states. Protection for trade secrets shared under an NDA comes entirely from common law, through the Court of Appeals decision in Ashland Management Inc. v. Janien, 82 N.Y.2d 395 (1993), which adopted the Restatement of Torts six-factor test for what counts as a trade secret.

  3. 3

    New York also has no general statute governing non-compete agreements. Whether a restrictive covenant, including an NDA whose confidentiality definition is broad enough to restrict someone's work, is enforceable depends on the common-law reasonableness test from BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999): no broader than necessary to protect a legitimate employer interest, no undue hardship on the employee, and not injurious to the public.

  4. 4

    A 2023 bill to ban most non-compete agreements statewide, Senate Bill S3100A, passed both the Senate and Assembly in June 2023 but was vetoed by Governor Kathy Hochul on December 22, 2023, and never became law.

  5. 5

    Because New York has no dedicated trade secret statute, there is no dedicated statute of limitations for misappropriation either. Courts generally apply the state's general three-year limitations period for injury to property under CPLR 214.

  6. 6

    New York has one narrow, industry-specific non-compete statute: Labor Law Section 202-k, the Broadcast Employees Freedom to Work Act, bars broadcasting employers from restricting on-air or off-air, non-management employees from working elsewhere after their employment ends.

  7. 7

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

  8. 8

    A New York 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 New York, 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

Customize your Non-Disclosure Agreement Template with DocDraft

NEW YORK NON-DISCLOSURE AGREEMENT

This Non-Disclosure Agreement is entered into between [Party A Name] of [City], New York and [Party B Name] of [City], New York (each a "Party").

  1. Purpose. [Describe business purpose, e.g. the Parties are exploring a potential transaction] is why the Parties are entering into this Agreement, and each may need to disclose Confidential Information to the other along the way.

  2. Definition of Confidential Information. Unlike almost every other state, New York has never enacted a trade secret statute, so this Agreement cannot point to a state code definition. Whether disclosed information qualifies as a trade secret instead turns on the six-factor test the Court of Appeals adopted in Ashland Management Inc. v. Janien: how widely known it is inside and outside the disclosing Party's business, what secrecy measures were taken, its value to the business and competitors, the effort spent developing it, and how easily a stranger could duplicate it. "Confidential Information" more broadly means any business, financial, or technical material a Party labels confidential, or that a reasonable person would treat as confidential given the circumstances, excluding what the receiving Party already knew, what becomes public through no fault of its own, what it develops independently, and what a third party discloses without owing anyone confidentiality.

  3. Obligations. The receiving Party must apply reasonable care, use the information only to advance the Section 1 purpose, and withhold it from third parties absent the disclosing Party's prior written consent, except for its own employees or advisors who need it and owe confidentiality duties at least this strict.

  4. Scope Limitation (New York-Specific). New York has no statute of general application limiting or banning non-compete and confidentiality-based work restrictions; Senate Bill S3100A would have imposed one and cleared both the Senate and Assembly in June 2023, but Governor Hochul vetoed it that December 22, so no such ban is law today. New York courts instead weigh the three-part reasonableness test from BDO Seidman v. Hirshberg: a restriction survives only if it reaches no further than necessary to protect a legitimate business interest, imposes no undue hardship on the receiving Party, and is not injurious to the public, with time and geographic reach both factored in. This Agreement satisfies that test: it binds the receiving Party only as to genuine confidential and trade secret information, never that Party's own skill, knowledge, or experience.

  5. Invention Assignment (New York Labor Law Section 203-f). If the receiving Party is the disclosing Party's employee, nothing here requires assigning an invention developed entirely on personal time without the employer's equipment, supplies, facilities, or trade secret information, unless it relates to the employer's business or anticipated research at conception, or grew out of work performed for the employer. A broader demand is void under this 2023 statute.

  6. Federal Whistleblower Notice. Under 18 U.S.C. Section 1833(b) of the Defend Trade Secrets Act, disclosing a trade secret in confidence to a government official or attorney solely to report a suspected legal violation, or in a sealed court filing, triggers no criminal or civil liability. Omitting this notice would cost the disclosing Party the Act's damages and fee remedies against an employee.

  7. Term. Confidentiality duties continue for [X years] after signing; information also meeting New York's common-law trade secret standard from Section 2 stays protected under this Agreement for as long as it remains secret.

  8. Return or Destruction. A written request from the disclosing Party, or the natural conclusion of the Section 1 relationship, whichever comes first, triggers the receiving Party's duty to return or destroy every copy of the Confidential Information it holds.

  9. Remedies. A breach here can cause harm money cannot fully repair, so the non-breaching Party may seek a preliminary injunction under CPLR Article 63, Section 6301 of which permits relief on a showing of irreparable injury, plus available damages.

  10. Governing Law. New York law governs this Agreement under General Obligations Law Section 5-1401, which enforces a New York choice-of-law clause for a qualifying transaction even absent any independent connection to the state.

  11. Miscellaneous. Both New York's Electronic Signatures and Records Act, State Technology Law Sections 301 through 309, and the federal ESIGN Act, 15 U.S.C. Section 7001, make an electronic signature on this Agreement just as binding as a handwritten one. Any single provision a court later finds unenforceable falls away without disturbing the rest, and the Parties' mutual promises to disclose and protect Confidential Information already supply the consideration ordinary New York contract law requires.

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

New York Requirements for Non-Disclosure Agreement

Definition of Confidential Information (New York common law, Ashland Management Inc. v. Janien; Defend Trade Secrets Act, 18 U.S.C. Section 1839)

New York has never adopted a trade secret statute, so what counts as confidential information under state law comes entirely from the Court of Appeals' six-factor common-law test in Ashland Management Inc. v. Janien. Under federal law, the Defend Trade Secrets Act's definitions, including 'trade secret,' appear at 18 U.S.C. Section 1839, while Section 1836 is the Act's separate civil-cause-of-action section.

Trade Secret Protection (New York common law, Ashland Management Inc. v. Janien; Defend Trade Secrets Act, 18 U.S.C. Section 1836)

Trade secrets New York recognizes under its common-law standard remain protected for as long as they stay secret, a common-law principle rooted in Ashland Management Inc. v. Janien rather than a statutory one. 18 U.S.C. Section 1836 is accurately cited here as the Defend Trade Secrets Act provision creating a federal civil cause of action for misappropriation, available alongside the state common-law claim.

Exclusions from Confidential Information (New York common law principles of contract interpretation)

Specifies information not considered confidential under New York law, such as publicly available information, information independently developed, or information rightfully received from third parties.

Whistleblower Protection (Defend Trade Secrets Act of 2016, 18 U.S.C. Section 1833(b))

Includes immunity provisions for confidential disclosure of trade secrets to government officials or attorneys for reporting suspected violations of law, as required by federal law.

Term of Confidentiality (New York common law reasonableness test, BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999))

Specifies that the duration of confidentiality obligations must be reasonable. Duration reasonableness in New York is assessed under the common-law test from BDO Seidman v. Hirshberg, which weighs time and geographic scope alongside the employer's legitimate interest.

Statute of Limitations (New York Civil Practice Law and Rules (CPLR) Section 213)

Acknowledges the six-year statute of limitations for breach of contract claims in New York, which would apply to NDA violations.

Governing Law (New York General Obligations Law Section 5-1401)

Specifies New York law as the governing law for the agreement, which is enforceable under New York's choice of law principles.

Jurisdiction and Venue (New York General Obligations Law Section 5-1402; New York Civil Practice Law and Rules (CPLR) Section 501)

General Obligations Law Section 5-1402 lets a party consent to New York jurisdiction for contract disputes, but only for transactions covering at least one million dollars in the aggregate. CPLR Section 501 separately enforces any written venue-fixing agreement on a motion to change venue, with no dollar threshold. Both citations are accurate but describe two distinct mechanisms, not one uniform rule.

Remedies for Breach (New York Civil Practice Law and Rules (CPLR) Article 63)

Outlines remedies for breach including injunctive relief, which is recognized under New York law for confidentiality breaches where monetary damages may be inadequate.

Liquidated Damages (New York common law on liquidated damages; Truck Rent-A-Center v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420 (1977))

If included, must be reasonable and not constitute a penalty under New York law, which scrutinizes liquidated damages provisions.

Electronic Signatures (New York Electronic Signatures and Records Act (ESRA); Electronic Signatures in Global and National Commerce Act (E-SIGN), 15 U.S.C. Section 7001)

Acknowledges that electronic signatures are valid and enforceable under both New York and federal law.

Severability (New York common law principles of contract severability)

Provides that if any provision is found unenforceable under New York law, the remainder of the agreement remains in effect, consistent with New York contract interpretation principles.

No Implied Licenses (New York common law; federal intellectual property laws)

Clarifies that no intellectual property licenses are granted by implication, which aligns with New York intellectual property law principles.

Relationship of Parties (New York Partnership Law Section 10; New York common law on agency relationships)

Establishes that the NDA does not create any agency, partnership, or joint venture relationship under New York law.

Entire Agreement (New York common law parol evidence rule)

States that the NDA constitutes the entire agreement between the parties regarding confidentiality, consistent with New York's parol evidence rule.

Modification (New York General Obligations Law Section 15-301)

Requires that modifications to the NDA be in writing and signed by all parties, in accordance with New York's Statute of Frauds.

Waiver (New York common law principles regarding waiver)

Specifies that failure to enforce any provision does not constitute waiver of future rights, consistent with New York contract law principles.

Frequently Asked Questions

A Non-Disclosure Agreement in New York 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. New York has no trade secret statute, so any trade secrets shared under the agreement are protected separately through common law rather than a codified statute.

It depends on the common-law reasonableness test, since New York has no general statute governing non-compete agreements. Under BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), a restraint, including an NDA confidentiality clause broad enough to functionally restrict someone's work, is enforceable only if it is no broader than necessary to protect a legitimate employer interest, does not impose undue hardship on the employee, and is not injurious to the public.

No. A bill that would have banned most non-compete agreements statewide, Senate Bill S3100A, passed both the Senate and Assembly in June 2023, but Governor Kathy Hochul vetoed it on December 22, 2023. It never became law, so New York continues to rely on the common-law reasonableness test for restrictive covenants rather than a statutory ban.

New York has never adopted a trade secret statute, unlike most states. Trade secret protection is entirely common law, governed by the Court of Appeals decision in Ashland Management Inc. v. Janien, 82 N.Y.2d 395 (1993), which adopted the Restatement of Torts test weighing factors like how widely the information is known, the measures taken to keep it secret, and the effort spent developing it. This protection applies independently of whatever the NDA itself states.

New York has no dedicated statute of limitations for trade secret misappropriation because it has no dedicated trade secret statute. Courts generally apply the state's general three-year limitations period for an action to recover damages for an injury to property, under CPLR 214. A separate breach-of-contract claim over the NDA itself follows New York's ordinary written-contract limitations period.

No, not automatically. Labor Law Section 203-f, enacted in 2023, excludes an invention the employee developed entirely on their own time, without using the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business or actual or demonstrably anticipated research or development, or resulted from work the employee performed for the employer. A provision in an NDA or employment agreement that tries to reach further than that is against New York public policy and unenforceable.

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 New York; the choice is about which structure matches the actual relationship.

No. A New York 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 under New York's common-law standard, that provides an additional, independent basis for relief, separate from whatever remedies the NDA itself specifies.