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South Carolina Non-Disclosure Agreement Requirements

An ordinary confidentiality duty is treated differently from a restrictive covenant: the South Carolina Trade Secrets Act (S.C.

Introduction

An ordinary confidentiality duty is treated differently from a restrictive covenant: the South Carolina Trade Secrets Act (S.C. Code Ann. Sections 39-8-10 through 39-8-130) specifically states that a contractual duty not to disclose a trade secret is not void for lacking a durational or geographical limitation. A Non-Disclosure Agreement in South Carolina is an ordinary contract, mutual or one-way, in which one or both parties agree to keep specified information confidential, and the state's stricter scrutiny for restrictive covenants only applies if the confidentiality definition is broad enough to functionally restrain someone from working in their field. South Carolina has no statute of general applicability governing non-competes or restrictive covenants, so that stricter scrutiny comes entirely from case law: a covenant must be necessary to protect the employer's legitimate interest, reasonably limited in time and place, not unduly harsh on the employee's ability to earn a living, consistent with sound public policy, and supported by valuable consideration, the five-part test set out in Rental Uniform Service of Florence, Inc. v. Dudley (1983), and its courts refuse to blue-pencil, or judicially narrow, a covenant that fails that test, voiding it entirely instead, a rule confirmed in Poynter Investments, Inc. v. Century Builders of Piedmont, Inc. (2010). A trade secret misappropriation claim generally must be filed within three years of when it was discovered or reasonably should have been discovered, and a continuing misappropriation counts as one claim rather than resetting the clock. South Carolina has no employee invention-assignment carve-out statute of the kind California, Delaware, and several other states have enacted.

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Key Things to Know

  1. 1

    Trade secret protection runs separately under the South Carolina Trade Secrets Act (S.C. Code Ann. Sections 39-8-10 through 39-8-130), and Section 39-8-30(D) specifically protects a confidentiality duty from being voided just because it lacks a durational or geographical limitation, unlike a non-compete covenant.

  2. 2

    That risk runs through the scope of the confidentiality definition, not the existence of the NDA itself. South Carolina has no statute of general applicability governing non-competes, so enforceability turns on a common-law five-part test from Rental Uniform Service of Florence, Inc. v. Dudley (1983): necessity to the employer's legitimate interest, reasonable time and place limits, no undue hardship on the employee's ability to earn a living, consistency with sound public policy, and valuable consideration.

  3. 3

    South Carolina courts refuse to blue-pencil, or judicially narrow, an overbroad non-compete-style clause. Under Poynter Investments, Inc. v. Century Builders of Piedmont, Inc. (2010), the restriction is voided in its entirety rather than rewritten to something reasonable, so a South Carolina NDA that reads like a disguised non-compete cannot be salvaged by dropping just the unreasonable part.

  4. 4

    A trade secret misappropriation claim in South Carolina generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered, and a continuing misappropriation is treated as a single claim rather than restarting the clock with each new act (S.C. Code Ann. Section 39-8-70).

  5. 5

    South Carolina has no employee invention-assignment carve-out statute. Unlike California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, and Washington, nothing in the South Carolina Code of Laws limits what an employer can require an employee to assign as an invention through an NDA or employment agreement.

  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 South Carolina; which one fits depends on whether the exchange runs both directions, like a partnership discussion, or one direction, like pitching an investor.

  7. 7

    A South Carolina court can order injunctive relief to stop an ongoing or threatened breach of a valid NDA, and under the South Carolina Trade Secrets Act, a court may also award exemplary damages up to twice the actual damages if the misappropriation was willful, wanton, or in reckless disregard of the owner's rights (S.C. Code Ann. Section 39-8-40(C)).

Key decisions before you file

Before you file a Non-Disclosure Agreement in South Carolina, 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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SOUTH CAROLINA NON-DISCLOSURE AGREEMENT

  1. Parties. [Party A Name] and [Party B Name], each of [City], South Carolina (each a "Party"), enter into this Non-Disclosure Agreement on the date signed below.

  2. Purpose. The Parties expect to exchange sensitive information for [describe business purpose], and each wants that exchange protected.

  3. Definition of Confidential Information. Confidential Information excludes four things: what the receiving Party develops on its own, what it already lawfully knew, what becomes public through no fault of its own, and what a third party hands over free of any confidentiality duty. Everything else marked confidential, or that a reasonable person would treat as confidential given the circumstances, counts as Confidential Information, including a trade secret as South Carolina defines it at S.C. Code Ann. Section 39-8-20(5): information with independent economic value from not being generally known, protected by reasonable secrecy efforts.

  4. Obligations. The receiving Party may share Confidential Information only with employees, agents, or advisors who need it for the Section 2 purpose and are already bound to confidentiality this strict; anyone else needs prior written consent. It must apply at least the care it gives its own sensitive information and must not use Confidential Information for any other purpose.

  5. Scope Limitation (South Carolina-Specific). South Carolina has no statute governing non-compete or restrictive-covenant agreements, and its courts refuse to blue-pencil an overbroad one: under Poynter Investments, Inc. v. Century Builders of Piedmont, Inc., 387 S.C. 583 (2010), the whole restraint is void, not narrowed to something reasonable. If any obligation here restrained a Party's ability to work in its trade rather than protecting confidential or trade secret information, a court would test it under the five-factor common-law standard of Rental Uniform Service of Florence, Inc. v. Dudley, 278 S.C. 674 (1983): necessity, reasonable time and place, no undue hardship earning a living, public policy, and consideration, and could void it entirely with no fix. So this Agreement binds each Party to keep secrets, not to restrain where either works next or what skills either carries forward.

  6. Federal Whistleblower Notice. This Agreement discloses the immunity 18 U.S.C. Section 1833(b) grants under the Defend Trade Secrets Act: reporting a suspected legal violation in confidence to a government official or attorney, or filing a trade secret under seal in court, cannot expose the discloser to liability. Omitting this notice forfeits the Act's exemplary-damages and fee remedies against an employee later sued for misappropriation.

  7. Term. The confidentiality duties above continue for [X years] from signing. South Carolina courts have upheld comparable terms: Milliken & Co. v. Morin, 399 S.C. 23 (2012), found a three-year post-employment confidentiality duty covering competitively sensitive information, not just trade secrets, reasonable. A trade secret itself stays protected as long as it remains one, since Section 39-8-30(D) exempts that duty from any durational limit.

  8. Return or Destruction. The duty to return or destroy every copy of Confidential Information triggers on whichever comes first, a request from the disclosing Party or the end of the Section 2 purpose, and the receiving Party will confirm compliance in writing.

  9. Remedies. Because unauthorized disclosure could cause harm money alone cannot repair, the disclosing Party may enjoin actual or threatened misappropriation under Section 39-8-30(C) and Section 39-8-50, plus damages under Section 39-8-40: actual loss, unjust enrichment not already counted in that loss, and, on a finding of willful or reckless disregard, exemplary damages up to double the actual award.

  10. Governing Law. South Carolina law governs this Agreement. A clause requiring disputes litigated outside South Carolina would not be exclusive under S.C. Code Ann. Section 15-7-120, which preserves each Party's right to sue under ordinary South Carolina venue rules despite a contrary forum clause, so any action may proceed in South Carolina courts with jurisdiction over it.

  11. Miscellaneous. Because the Section 7 term exceeds one year, Section 32-3-10 treats this Agreement as unperformable within a year and therefore requiring a signed writing, which this Agreement satisfies. Electronic signatures bind the Parties under the South Carolina Uniform Electronic Transactions Act (S.C. Code Ann. Sections 26-6-10 through 26-6-210) and the federal E-SIGN Act (15 U.S.C. Section 7001 et seq.). If a court holds any provision unenforceable, the rest stays in force, and each Party's promises to the other serve as its consideration.

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

South Carolina Requirements for Non-Disclosure Agreement

Trade Secrets Protection (S.C. Code Ann. Sections 39-8-10 through 39-8-130)

Establishes coverage under the South Carolina Trade Secrets Act, which protects information that derives independent economic value from not being generally known and is subject to efforts reasonable under the circumstances to maintain its secrecy.

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

Incorporates the federal civil cause of action for trade secret misappropriation, which supplements the remedies available under South Carolina's own Trade Secrets Act.

Definition of Confidential Information (S.C. Code Ann. Section 39-8-20)

Section 39-8-20 is the Trade Secrets Act's definitions section; subsection (5) defines trade secret as information with independent economic value from not being generally known that is subject to reasonable efforts to maintain secrecy, the statutory floor beneath the NDA's broader confidentiality definition.

Duration of Confidentiality Obligations (Milliken & Co. v. Morin, 399 S.C. 23 (2012))

Milliken v. Morin upheld a three-year post-employment confidentiality obligation covering competitively sensitive information beyond true trade secrets, and a one-year invention-holdover assignment clause, as reasonable and enforceable. South Carolina courts will enforce a bounded, specific confidentiality term reaching beyond trade secrets.

Statute of Frauds for Multi-Year Agreements (S.C. Code Ann. Section 32-3-10)

Section 32-3-10 is South Carolina's Statute of Frauds. It requires a signed writing for 'any agreement that is not to be performed within the space of one year from the making thereof,' which covers an NDA with a confidentiality term longer than one year.

Remedies and Enforcement (S.C. Code Ann. Section 39-8-40, damages; injunctive relief under Section 39-8-30(C) and Section 39-8-50)

Section 39-8-40 covers damages (actual loss, unjust enrichment, and exemplary damages up to double the actual award on a finding of willful, wanton, or reckless conduct). Injunctive relief against actual or threatened misappropriation is separately authorized by Section 39-8-30(C) and Section 39-8-50.

Electronic Signatures (S.C. Code Ann. Sections 26-6-10 through 26-6-210, South Carolina Uniform Electronic Transactions Act)

Confirmed the cited chapter range exactly matches South Carolina's UETA (Section 26-6-10, short title, through Section 26-6-210, the chapter's final section).

Federal Electronic Signatures (15 U.S.C. Section 7001 et seq., E-SIGN Act)

Correct citation to the federal Electronic Signatures in Global and National Commerce Act, which validates electronic signatures in interstate commerce alongside the state UETA.

Statute of Limitations (S.C. Code Ann. Section 39-8-70)

Correct citation, confirmed verbatim: a misappropriation action must be brought within three years of discovery or when it reasonably should have been discovered, and a continuing misappropriation is treated as a single claim.

Venue (S.C. Code Ann. Section 15-7-120)

Section 15-7-120 does not affirmatively designate South Carolina as the forum; it instead provides that a contract or arbitration clause requiring disputes to be litigated outside South Carolina's normal venue rules is not exclusive, preserving a party's right to sue under those ordinary rules regardless of a contrary clause.

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

Correct citation to the required notice that a person is immune from criminal or civil trade secret liability for disclosing a trade secret in confidence to a government official or attorney to report a suspected legal violation, or in a sealed court filing, as required to preserve DTSA remedies.

Disclosure Under Legal Compulsion (South Carolina Rules of Civil Procedure, Rule 26(c))

SCRCP Rule 26(c) lets a party or person from whom discovery is sought move for a protective order, on a showing of good cause, limiting or conditioning disclosure of information such as trade secrets or confidential business information during litigation. This rule is the mechanism a receiving Party would invoke if compelled by subpoena or court order to disclose Confidential Information.

Unfair Trade Practices Compliance (S.C. Code Ann. Sections 39-5-10 through 39-5-160, South Carolina Unfair Trade Practices Act)

The South Carolina Unfair Trade Practices Act, prohibiting unfair methods of competition and unfair or deceptive acts or practices, is codified at Sections 39-5-10 through 39-5-160.

Federal Antitrust Compliance (15 U.S.C. Sections 1 through 7, Sherman Antitrust Act)

Correct citation to the Sherman Antitrust Act's core sections; a legitimate, if generic, consideration ensuring the confidentiality obligations here do not function as a vehicle for anticompetitive information sharing between competitors.

Frequently Asked Questions

A Non-Disclosure Agreement in South Carolina 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 South Carolina Trade Secrets Act (S.C. Code Ann. Sections 39-8-10 through 39-8-130) regardless of what the NDA itself says.

It can, but South Carolina scrutinizes it closely, and there is no statute that specifically governs this. If the confidentiality definition is broad enough to functionally restrain someone from working in their field, South Carolina courts apply the common-law reasonableness test used for non-competes, and if the restriction is overbroad, they will not narrow it. They void it entirely under Poynter Investments, Inc. v. Century Builders of Piedmont, Inc. (2010), which held that a restriction must stand or fall on its own terms rather than being judicially rewritten.

South Carolina courts apply a five-part common-law test from Rental Uniform Service of Florence, Inc. v. Dudley (1983): the restriction must be necessary to protect the employer's legitimate interest, reasonably limited in time and place, not unduly harsh or oppressive on the employee's ability to earn a living, consistent with sound public policy, and supported by valuable consideration. South Carolina has no statute of general applicability on this point, so all five factors come from case law rather than a code section.

A trade secret misappropriation claim under the South Carolina 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 (S.C. Code Ann. Section 39-8-70). A continuing misappropriation counts as a single claim rather than resetting the clock with each new act. A separate breach-of-contract claim over the NDA itself follows South Carolina's ordinary written-contract limitations period.

It can, and South Carolina has no statute limiting how far an invention-assignment clause in an NDA or employment agreement can reach. Unlike California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, and Washington, which all have statutes carving out inventions an employee develops entirely on their own time and resources, South Carolina has no equivalent carve-out in its Code of Laws, so the scope of any assignment provision is governed by ordinary contract terms.

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 South Carolina; the choice is about which structure matches the actual relationship.

No. A South Carolina 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 South Carolina Trade Secrets Act provides an additional, independent basis for relief, including actual damages, unjust enrichment, and exemplary damages up to twice the actual damages if the misappropriation was willful, wanton, or in reckless disregard of the owner's rights (S.C. Code Ann. Section 39-8-40(C)).