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Pennsylvania Non-Disclosure Agreement Requirements

For every Pennsylvania employer and employee outside that narrow health care category, there is no statute governing restrictive covenants at all.

Introduction

For every Pennsylvania employer and employee outside that narrow health care category, there is no statute governing restrictive covenants at all. Courts instead apply the common law reasonableness test the Pennsylvania Supreme Court set out in Hess v. Gebhard & Co. (2002): a restrictive covenant is enforceable only if it is tied to an employment or business sale relationship, supported by adequate consideration, reasonably limited in duration and geography, and designed to protect a legitimate business interest rather than suppress ordinary competition. Since January 1, 2025, the one statutory exception to that common-law approach is the Fair Contracting for Health Care Practitioners Act (Act 74 of 2024): a noncompete between an employer and a covered health care practitioner, meaning a physician, osteopath, certified registered nurse anesthetist, certified registered nurse practitioner, or physician assistant, is barred unless the covenant runs one year or less and the practitioner was not dismissed by the employer. A Pennsylvania Non-Disclosure Agreement 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 Pennsylvania Uniform Trade Secrets Act (12 Pa. Consolidated Statutes Sections 5301 through 5308), and a misappropriation claim generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered. The practical drafting takeaway is the same caution both Act 74 and Hess v. Gebhard point toward: keep the confidentiality definition tied to genuine trade secrets and sensitive information, since an overbroad definition is what turns an ordinary NDA into the kind of restraint a Pennsylvania court, or the new statute, will not enforce.

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Key Things to Know

  1. 1

    Outside health care, Pennsylvania has no statute governing restrictive covenants. Courts apply the common law reasonableness test from Hess v. Gebhard & Co., 570 Pa. 148 (2002): a covenant tied to an employment or business sale relationship, supported by adequate consideration, reasonably limited in duration and geography, and aimed at a legitimate business interest rather than simply stopping competition.

  2. 2

    Pennsylvania's Fair Contracting for Health Care Practitioners Act (Act 74 of 2024, effective January 1, 2025) voids a noncompete covenant between an employer and a covered health care practitioner, meaning a physician, osteopath, certified registered nurse anesthetist, certified registered nurse practitioner, or physician assistant, unless the covenant is one year or less and the practitioner was not dismissed by the employer.

  3. 3

    Trade secret protection runs through the Pennsylvania Uniform Trade Secrets Act (12 Pa. Consolidated Statutes Sections 5301 through 5308), separate from whatever the NDA itself says.

  4. 4

    A trade secret misappropriation claim in Pennsylvania generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered (12 Pa. Consolidated Statutes Section 5307).

  5. 5

    Pennsylvania has no statute like California's Labor Code Section 2870 carving out inventions an employee develops on their own time. If a Pennsylvania NDA or employment agreement includes an invention-assignment clause, its scope is set entirely by the contract's own language, not by a statutory floor.

  6. 6

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

  7. 7

    A Pennsylvania 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 Pennsylvania, 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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PENNSYLVANIA NON-DISCLOSURE AGREEMENT

This Non-Disclosure Agreement is made between [Party A Name] of [City], Pennsylvania and [Party B Name] of [City], Pennsylvania (each a "Party"), who agree to the following terms.

  1. Purpose. The Parties anticipate exchanging Confidential Information in connection with [describe business purpose, e.g. evaluating a potential business relationship], and this Agreement sets the terms under which that information will be protected.

  2. Definition of Confidential Information. "Confidential Information" means information, technical or business, marked confidential or reasonably understood as such from how it was shared, including any trade secret as defined in the Pennsylvania Uniform Trade Secrets Act, 12 Pa. Consolidated Statutes Section 5302: information with independent economic value from not being generally known, kept secret through reasonable efforts. A label alone is not enough; four exceptions apply regardless: material already public through no fault of the receiving Party, material it already held, material a third party lawfully discloses without owing a confidentiality duty, and material it developed independently.

  3. Obligations. The receiving Party will use Confidential Information only for the Section 1 purpose, protect it with reasonable care, and not share it outside its own organization without prior written consent, except with its own personnel and advisors who need it for that purpose and are bound to terms at least as protective as these.

  4. Scope Limitation (Pennsylvania-Specific). For a covered health care practitioner (a physician, osteopath, certified registered nurse anesthetist, certified registered nurse practitioner, or physician assistant), an employer may enforce a noncompete covenant entered after January 1, 2025 only if it runs one year or less and the practitioner was not dismissed by the employer; a longer covenant, or one against a dismissed practitioner, is void under the Fair Contracting for Health Care Practitioners Act (Act 74 of 2024). Every other Pennsylvania employer and employee faces no such statute; courts instead apply the four-part reasonableness test from Hess v. Gebhard & Co., 570 Pa. 148 (2002): tied to the employment or business-sale relationship, backed by real consideration, limited in duration and geography, and aimed at a legitimate business interest rather than ordinary competition. Because either standard can void an overbroad clause, this Agreement's confidentiality duties never reach a Party's general skills, training, or knowledge, and it imposes no noncompete or non-solicitation restriction of its own.

  5. Federal Whistleblower Notice. Under 18 U.S.C. Section 1833(b) of the Defend Trade Secrets Act, a person cannot be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or an attorney solely to report a suspected legal violation, or in a sealed court filing. This notice appears because giving it is a condition of recovering the Act's exemplary damages and attorney's fees against an employee, contractor, or consultant.

  6. Term. Confidentiality duties last [X years] from signing, except that information meeting the Pennsylvania Uniform Trade Secrets Act's trade secret definition stays protected as long as it keeps that status.

  7. Return or Destruction. Within [X days] of the disclosing Party's written request, or promptly once the Section 1 purpose concludes, the receiving Party will return or destroy all Confidential Information in its possession and confirm destruction in writing, at the disclosing Party's election.

  8. Remedies. For a trade secret, the Pennsylvania Uniform Trade Secrets Act lets a court enjoin the misappropriation (12 Pa. Consolidated Statutes Section 5303), award damages for actual loss, unjust enrichment, or a reasonable royalty (Section 5304), and, if the misappropriation was willful and malicious, award attorney's fees (Section 5305). Short of misappropriation, the non-breaching Party may still seek an injunction and damages under ordinary contract remedies, subject to the same reasonableness limits Hess v. Gebhard applies to any restrictive term here.

  9. Governing Law. Pennsylvania weighs which state has the most significant relationship to a transaction when a conflict-of-law question arises, the flexible approach its Supreme Court adopted in Griffith v. United Air Lines, 416 Pa. 1 (1964); with both Parties and the Section 1 relationship based here, that analysis points to Pennsylvania law governing this Agreement.

  10. Miscellaneous. An electronic signature binds a Party under the Pennsylvania Electronic Transactions Act (73 P.S. Section 2260.101 et seq.) and the federal ESIGN Act (15 U.S.C. Section 7001). If a court finds any provision unenforceable, the rest of this Agreement stays in effect. The confidentiality duties each Party assumes toward the other serve as the consideration supporting this Agreement.

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

Pennsylvania Requirements for Non-Disclosure Agreement

Definition of Confidential Information (12 Pa. Consolidated Statutes Sections 5301 through 5308, Pennsylvania Uniform Trade Secrets Act)

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

Federal Trade Secret Protection (18 U.S.C. Sections 1836 through 1839, Defend Trade Secrets Act)

Incorporates protections under the federal Defend Trade Secrets Act, which provides federal jurisdiction and additional remedies for trade secret misappropriation.

Term of Confidentiality and Limitations Periods (42 Pa. Consolidated Statutes Section 5525, contract actions; 12 Pa. Consolidated Statutes Section 5307, Pennsylvania Uniform Trade Secrets Act)

Distinguishes the contractual term of confidentiality, which the Parties set for themselves, from the separate statutory windows for filing suit: four years for an ordinary contract claim under Section 5525, and three years after discovery for a trade secret misappropriation claim under the Pennsylvania Uniform Trade Secrets Act's Section 5307.

Exclusions from Confidential Information (12 Pa. Consolidated Statutes Section 5302, Pennsylvania Uniform Trade Secrets Act)

Identifies information not considered confidential under Pennsylvania law, including publicly available information, independently developed information, and information rightfully received from a third party.

Permitted Disclosures (18 U.S.C. Section 1833(b), Defend Trade Secrets Act; Pennsylvania Whistleblower Law, 43 P.S. Sections 1421 through 1428)

The federal Defend Trade Secrets Act immunity notice applies to any confidential disclosure to a government official or attorney made solely to report a suspected legal violation. Pennsylvania's Whistleblower Law adds separate retaliation protection, but only where the employer is a public body, or an entity created by or funded through one, not a private employer generally.

Injunctive Relief (12 Pa. Consolidated Statutes Section 5303, Pennsylvania Uniform Trade Secrets Act)

Provides for injunctive relief in case of a threatened or actual trade secret misappropriation, consistent with Pennsylvania courts' authority under the Pennsylvania Uniform Trade Secrets Act.

Electronic Signatures (Pennsylvania Electronic Transactions Act, 73 P.S. Sections 2260.101 through 2260.5101, and 15 U.S.C. Section 7001, Electronic Signatures in Global and National Commerce Act)

Acknowledges the validity of electronic signatures under both Pennsylvania and federal law.

Non-Solicitation Provisions and Restrictive Covenant Consideration (Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015))

Pennsylvania's Supreme Court held in Socko that a restrictive covenant, including a non-solicitation or confidentiality provision functioning as one, added after employment has already begun must be supported by new and valuable consideration, such as a raise or a change in job status, and that a recital of intent to be legally bound under Pennsylvania's Uniform Written Obligations Act does not substitute for that consideration.

Severability (Pennsylvania common law contract doctrine)

Ensures that if a court finds any provision of the Agreement unenforceable, for example an overbroad Scope Limitation clause, the remainder stays in force, consistent with Pennsylvania's general severability doctrine for contracts with both enforceable and unenforceable parts.

Remedies and Damages (12 Pa. Consolidated Statutes Section 5304, Pennsylvania Uniform Trade Secrets Act)

Specifies available remedies for trade secret misappropriation, including damages for actual loss, unjust enrichment, or a reasonable royalty.

Attorney's Fees (12 Pa. Consolidated Statutes Section 5305, Pennsylvania Uniform Trade Secrets Act)

Provides for recovery of attorney's fees where misappropriation was willful and malicious, consistent with the Pennsylvania Uniform Trade Secrets Act.

Compliance with Privacy Laws (Pennsylvania Breach of Personal Information Notification Act, 73 P.S. Sections 2301 through 2329; Gramm-Leach-Bliley Act, 15 U.S.C. Section 6801 et seq.)

If the confidential information shared under this Agreement includes personal information, Pennsylvania's Breach of Personal Information Notification Act requires notifying affected individuals following a security breach; this is a specific breach-notification duty, not a general privacy compliance standard. The Gramm-Leach-Bliley Act adds a separate federal duty, but only applies if a Party is a financial institution as that Act defines the term.

Integration and Modification (Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004))

Establishes that this Agreement is the entire agreement between the Parties and can only be modified in a signed writing. In Yocca, the Pennsylvania Supreme Court held that a valid integration clause forecloses reliance on pre-contract representations not included in the signed agreement.

Frequently Asked Questions

A Non-Disclosure Agreement in Pennsylvania 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 Pennsylvania Uniform Trade Secrets Act (12 Pa. Consolidated Statutes Sections 5301 through 5308) regardless of what the NDA itself says.

Pennsylvania has no statute limiting non-compete provisions for the general workforce, so the answer turns on common law. Under Hess v. Gebhard & Co., 570 Pa. 148 (2002), a Pennsylvania court will enforce a restrictive covenant, including an NDA confidentiality clause broad enough to function as one, only if it is tied to an employment or business sale relationship, supported by adequate consideration, reasonably limited in duration and geography, and protects a legitimate business interest rather than simply blocking competition.

Yes. Since January 1, 2025, the Fair Contracting for Health Care Practitioners Act (Act 74 of 2024) voids a noncompete covenant entered into between an employer and a covered health care practitioner, meaning a physician, osteopath, certified registered nurse anesthetist, certified registered nurse practitioner, or physician assistant, unless the covenant is one year or less and the practitioner was not dismissed by the employer. An NDA involving a covered practitioner that functions as a longer noncompete can be affected by this Pennsylvania statute even if it is labeled as a confidentiality agreement.

A trade secret misappropriation claim under the Pennsylvania 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 (12 Pa. Consolidated Statutes Section 5307). A separate breach-of-contract claim over the NDA itself follows Pennsylvania's ordinary written-contract limitations period.

It depends entirely on what the agreement says. Unlike California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, and Washington, Pennsylvania has no statute carving out inventions an employee develops on personal time without employer resources. A Pennsylvania NDA or employment agreement can define the scope of an invention-assignment obligation however the parties negotiate it, and that contract language, not a statutory floor, controls.

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 Pennsylvania, the choice is about which structure matches the actual relationship.

No. A Pennsylvania 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 Pennsylvania Uniform Trade Secrets Act provides an additional, independent basis for relief, including damages for actual loss and unjust enrichment, separate from whatever remedies the NDA itself specifies.