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South Dakota Non-Disclosure Agreement Requirements

That statutory permission isn't unconditional: a 2023 law, SDCL 53-9-11.2, carves it back out for a defined list of licensed healthcare and counseling practitioners, whose post-termination practice restrictions became voidable for contracts signed on or after July 1, 2023, with the same rule extending to community services providers for contracts signed on or after July 1, 2026.

Introduction

That statutory permission isn't unconditional: a 2023 law, SDCL 53-9-11.2, carves it back out for a defined list of licensed healthcare and counseling practitioners, whose post-termination practice restrictions became voidable for contracts signed on or after July 1, 2023, with the same rule extending to community services providers for contracts signed on or after July 1, 2026. Outside that carve-out, South Dakota's contracts-in-restraint-of-trade statute, SDCL 53-9-8, declares such restraints void only as an exception to specific statutory carve-outs, and SDCL 53-9-11 affirmatively permits an employee to agree not to compete with an employer for up to two years after termination, limited to a specified county, municipality, or other defined area. A Non-Disclosure Agreement in South Dakota is an ordinary contract in which one or both parties agree to keep specified information confidential, and it sits against that backdrop: a broad confidentiality definition functions closer to an enforceable restriction here than in states that void non-competes outright. Trade secrets shared under a South Dakota NDA are separately protected by the South Dakota Uniform Trade Secrets Act, SDCL Chapter 37-29, and a misappropriation claim generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered. South Dakota also has no employee invention-assignment carve-out comparable to California's; SDCL 60-2-10 instead broadly assigns to the employer anything an employee acquires by virtue of employment, so an NDA or employment agreement here faces no statutory limit narrowing what inventions an employee can be required to assign.

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Key Things to Know

  1. 1

    Trade secret protection runs through the South Dakota Uniform Trade Secrets Act (SDCL Chapter 37-29), separate from whatever the NDA itself says, and allows a court to award exemplary damages up to double the ordinary award for willful and malicious misappropriation.

  2. 2

    A 2023 amendment, SDCL 53-9-11.2, carves that permission back out for a defined list of licensed healthcare and counseling practitioners, physicians, nurses, therapists, counselors, and pharmacists among others, making post-termination practice restrictions voidable for contracts signed on or after July 1, 2023, with the same rule extending to community services providers for contracts signed on or after July 1, 2026.

  3. 3

    South Dakota's non-compete statute, SDCL 53-9-11, affirmatively permits an employee to agree not to compete with an employer for up to two years after termination, limited to a specified county, first- or second-class municipality, or other defined area, an approach different from states that void non-compete clauses by default.

  4. 4

    A trade secret misappropriation claim in South Dakota generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered (SDCL 37-29-6).

  5. 5

    South Dakota has no employee invention-assignment carve-out statute comparable to California's Labor Code Section 2870. SDCL 60-2-10 instead broadly assigns to the employer anything an employee acquires by virtue of employment, so a South Dakota NDA or employment agreement is not narrowed by any statutory own-time or own-equipment exception for inventions.

  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 Dakota; which one fits depends on whether the exchange runs in both directions or just one.

  7. 7

    A South Dakota 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 South Dakota, 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 DAKOTA NON-DISCLOSURE AGREEMENT

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

  1. Purpose. The Parties are entering into this Agreement because [describe business purpose, e.g., a proposed business relationship they are evaluating], and one or both may need to share Confidential Information to advance it.

  2. Definition of Confidential Information. "Confidential Information" means any business, technical, financial, or other information disclosed by one Party to the other that is labeled confidential or would reasonably be understood as confidential given the circumstances, including any trade secret as SDCL 37-29-1 defines that term for the South Dakota Uniform Trade Secrets Act. Excluded regardless of labeling: information already public without the receiving Party's fault, information it already lawfully possessed, information it works out independently, and information a third party lawfully passes along free of any confidentiality duty.

  3. Obligations. Whoever receives Confidential Information must keep it confidential, use it only for the purpose in Section 1, and not pass it along except to its own employees, contractors, or advisors who need it and are themselves bound to protect it on terms no looser than this Agreement.

  4. Scope Limitation (South Dakota-Specific). South Dakota does not automatically void an employee non-compete: SDCL 53-9-8 voids a contract restraining a lawful profession, trade, or business only "except as provided by §§ 53-9-9 to 53-9-12," and SDCL 53-9-11 affirmatively lets an employee agree, at hiring or later, not to compete with the employer for up to two years after termination within a specified county, municipality, or defined area, and not to solicit existing customers there on the same terms. If the signer is a licensed healthcare or counseling practitioner covered by SDCL 53-9-11.1, that permission stops applying to a post-termination practice restriction dated on or after July 1, 2023: SDCL 53-9-11.2 makes it voidable instead, while still allowing a limited restriction on soliciting existing patients or a provision tied to selling a practice. Outside that carve-out, any restriction this Agreement places on future work must stay within Section 53-9-11's two-year, defined-area limits, and may never reach ordinary skill, knowledge, or experience the receiving Party would have gained regardless.

  5. Federal Whistleblower Notice. Congress shields individuals from federal or state trade-secret liability when they share a trade secret confidentially with a government official or their own attorney solely to report suspected wrongdoing, or disclose it in a sealed court filing; 18 U.S.C. Section 1833(b) of the Defend Trade Secrets Act is the source, and this Agreement states it so the disclosing Party keeps access to the Act's full remedies.

  6. Term. This Agreement's confidentiality duties last [X years] from the date of signing, but whatever qualifies as a trade secret under SDCL 37-29-1 remains protected for as long as it retains that status, however many years that turns out to be.

  7. Return or Destruction. Two triggers end the receiving Party's right to hold onto Confidential Information: a request from the disclosing Party, or the natural conclusion of the purpose in Section 1. Once either happens, the receiving Party must return or destroy every copy in its possession and confirm that it has done so.

  8. Remedies. South Dakota's Uniform Trade Secrets Act lets a court enjoin an actual or threatened misappropriation under SDCL 37-29-2, award damages for the loss caused and any unjust gain under SDCL 37-29-3, and, where the misappropriation was willful and malicious, double that award as exemplary relief. A court may also award attorney's fees under SDCL 37-29-4; the non-breaching Party may pursue any or all of these, along with ordinary contract damages.

  9. Governing Law. South Dakota law governs this Agreement, and because at least one Party transacts business in this state, SDCL 15-7-2 subjects both Parties to the jurisdiction of South Dakota's courts for any dispute arising from it.

  10. Miscellaneous. An electronic signature satisfies this Agreement's signature requirement under South Dakota's Uniform Electronic Transactions Act, SDCL Chapter 53-12. If a court finds one provision unenforceable, SDCL 53-5-4's rule that a contract with lawful and unlawful objects stays valid as to its lawful parts supports keeping the rest of this Agreement in force. The Parties' mutual promises supply the consideration SDCL 53-1-2 requires, and this document, once signed, supersedes any earlier oral discussion of its subject matter.

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

South Dakota Requirements for Non-Disclosure Agreement

Definition of Confidential Information (SDCL 37-29-1)

Clearly defines what constitutes confidential information under South Dakota law, including trade secrets as defined in SDCL 37-29-1 of the South Dakota Uniform Trade Secrets Act.

Trade Secret Protection (SDCL 37-29-1 through 37-29-11, South Dakota Uniform Trade Secrets Act)

Acknowledges that the information being protected qualifies as a trade secret under South Dakota's Uniform Trade Secrets Act and specifies the reasonable efforts taken to maintain secrecy.

Permitted Disclosures (SDCL 15-6-26(c))

Outlines circumstances under which disclosure of confidential or trade secret information is permitted, specifically a court-ordered protective order in the course of civil litigation discovery under SDCL 15-6-26(c), which expressly authorizes a South Dakota court to limit or condition disclosure of a trade secret or other confidential research, development, or commercial information.

Remedies for Breach (SDCL 37-29-2 through 37-29-4, South Dakota Uniform Trade Secrets Act)

Specifies remedies available for misappropriation of a trade secret: injunctive relief for actual or threatened misappropriation (SDCL 37-29-2), damages for the loss caused and any unjust gain, including up to double damages as exemplary relief for willful and malicious misappropriation (SDCL 37-29-3), and attorney's fees in specified circumstances (SDCL 37-29-4).

Defend Trade Secrets Act Compliance (18 U.S.C. Section 1833(b))

Includes the required notice that an individual may not be held liable for disclosing a trade secret in confidence to a government official or attorney to report a suspected violation of law, or in a sealed court filing, as required to preserve the disclosing party's remedies under the Defend Trade Secrets Act.

Economic Espionage Act Compliance (18 U.S.C. Sections 1831 through 1839)

Acknowledges federal protections against economic espionage and theft of trade secrets, including criminal penalties, under the Economic Espionage Act.

Jurisdiction (SDCL 15-7-2)

SDCL 15-7-2, South Dakota's long-arm statute, subjects a person to the jurisdiction of South Dakota courts for a cause of action arising from transacting business, or other specified acts, within the state. This establishes jurisdiction for disputes arising from the Agreement; the parties' choice of South Dakota law to govern the Agreement itself is a separate contractual election, not established by this jurisdiction statute.

Severability (SDCL 53-5-4)

Supports severability of an unenforceable provision. SDCL 53-5-4 specifically addresses a contract with several distinct objects, at least one lawful and one unlawful, being void as to the unlawful part and valid as to the rest; a general NDA severability clause is a broader drafting convention than this section alone establishes, but the section supports the underlying principle.

Electronic Signatures (SDCL 53-12-1 through 53-12-50, South Dakota Uniform Electronic Transactions Act)

Acknowledges the validity and enforceability of electronic signatures under South Dakota's Uniform Electronic Transactions Act.

Consideration (SDCL 53-1-2)

Establishes valid consideration as required for contract enforceability under South Dakota law. SDCL 53-1-2 lists sufficient cause or consideration as one of the four essential elements of a contract, alongside capable parties, consent, and a lawful object.

Restrictive Covenant Limits (SDCL 53-9-11 and SDCL 53-9-11.2)

SDCL 53-9-11 affirmatively permits an employee non-compete restriction of up to two years after termination, limited to a specified county, first- or second-class municipality, or other defined area, rather than applying an open-ended reasonableness standard. Effective for contracts entered on or after July 1, 2023, SDCL 53-9-11.2 makes a post-termination practice restriction voidable for a licensed healthcare or counseling practitioner as defined in SDCL 53-9-11.1, so any restrictive covenant in the NDA must account for that carve-out.

Disclosure to Government Agencies (15 U.S.C. Section 78u-6; 18 U.S.C. Section 1514A)

Acknowledges that the agreement does not prevent disclosures to government agencies, including whistleblower protections under the Dodd-Frank Act's SEC whistleblower program and the Sarbanes-Oxley Act.

Compliance with Privacy Laws (15 U.S.C. Section 6801 et seq., Gramm-Leach-Bliley Act; 45 C.F.R. Section 160 et seq., HIPAA)

Addresses compliance with applicable federal privacy laws when confidential information exchanged under the NDA includes personal financial or health data.

Entire Agreement Clause (SDCL 53-8-5)

States that the NDA constitutes the entire agreement between the parties regarding confidentiality, superseding prior oral negotiations or stipulations, consistent with SDCL 53-8-5's rule that a written contract supersedes the oral negotiations preceding it.

Dispute Resolution (SDCL 21-25A-1 through 21-25A-38, South Dakota Uniform Arbitration Act)

Establishes procedures for resolving disputes, including arbitration, consistent with South Dakota's arbitration act, which expressly recognizes the enforceability of arbitration agreements between employers and employees.

Frequently Asked Questions

A Non-Disclosure Agreement in South Dakota 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 Dakota Uniform Trade Secrets Act (SDCL Chapter 37-29) regardless of what the NDA itself says.

Generally yes, within limits. Unlike states that void non-compete clauses by default, South Dakota's SDCL 53-9-11 affirmatively permits an employee to agree not to compete with an employer for up to two years after termination, restricted to a specified county, municipality, or other defined area, so a South Dakota NDA can incorporate a non-compete-style restriction that meets those bounds. A restriction exceeding two years or lacking a defined geographic area falls outside the statute's protection.

Not to every profession. A 2023 law, SDCL 53-9-11.2, makes post-termination practice restrictions voidable for a defined list of licensed healthcare and counseling practitioners, physicians, nurses, therapists, counselors, and pharmacists among others, for contracts signed on or after July 1, 2023, and extends the same voidability to community services providers for contracts signed on or after July 1, 2026. An NDA covering one of those professions cannot rely on SDCL 53-9-11's general permission to restrict post-termination practice.

A trade secret misappropriation claim under the South Dakota 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 (SDCL 37-29-6). A continuing misappropriation counts as a single claim rather than a series of separate ones. A separate breach-of-contract claim over the NDA itself follows South Dakota's ordinary written-contract limitations period.

South Dakota has no statute limiting what an NDA or employment agreement can require, unlike California's Labor Code Section 2870 or similar laws in a handful of other states. SDCL 60-2-10 instead broadly assigns to the employer anything an employee acquires by virtue of employment, so a South Dakota NDA's invention-assignment language is not narrowed by any statutory own-time or own-equipment carve-out. Whatever the agreement itself says 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 South Dakota; the choice is about which structure matches the actual relationship.

No. A South Dakota 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 Dakota Uniform Trade Secrets Act provides an additional, independent basis for relief, including damages for actual loss and unjust enrichment, and up to double damages as exemplary relief if the misappropriation was willful and malicious.