Standard NDA Trio Pack (California)

CALIFORNIA STANDARD NDA TRIO PACK

Three California-specific confidentiality agreements: (1) Mutual NDA; (2) One-Way Disclosure NDA; (3) Employee / Contractor Confidentiality & IP Assignment.

All three forms are drafted to comply with the California Uniform Trade Secrets Act (CUTSA), Cal. Civ. Code § 3426 et seq., and the California Supreme Court's holding in Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008), which strictly construes Cal. Bus. & Prof. Code § 16600 to void virtually all post-employment restraints on trade.

CALIFORNIA DRAFTING NOTES (READ FIRST)

1. No non-compete, no customer non-solicit. Under Cal. Bus. & Prof. Code § 16600 and as amended by SB 699 (§ 16600.1, eff. 1/1/2024) and AB 1076, any post-termination covenant restraining lawful profession or trade is void, and employers may face civil liability and a private right of action for attempting to enforce one. Customer non-solicitation covenants are likewise void under AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (2018). Do not include them in any California NDA.

2. Employee non-solicit is also suspect. AMN Healthcare cast serious doubt on the continuing validity of the Loral Corp. v. Moyes exception; assume employee non-solicits are unenforceable in California.

3. Trade secret protection is preserved. CUTSA (§ 3426.1) independently protects actual trade secrets regardless of § 16600. Draft confidentiality covenants as trade-secret protection, not as restraints on competition.

4. CUTSA preemption. CUTSA displaces common-law tort claims based on the same nucleus of facts (K.C. Multimedia, Inc. v. Bank of Am. Tech. & Operations, Inc., 171 Cal. App. 4th 939 (2009)). Preserve contract claims separately.

5. Defend Trade Secrets Act notice (18 U.S.C. § 1833(b)). Required immunity notice must be included in any agreement with an employee or contractor governing confidential information.

6. Cal. Lab. Code § 925. For employees primarily residing/working in California, a forum or choice-of-law clause designating a non-California forum/law is voidable by the employee. Trio Pack defaults to California forum and California law.

7. Silenced No More Act (Cal. Gov. Code § 12964.5; Cal. Code Civ. Proc. § 1001). NDAs cannot prohibit disclosure of information about unlawful acts in the workplace, including harassment, discrimination, or retaliation.

8. Whistleblower carve-out (Cal. Lab. Code § 1102.5). Confidentiality may not be used to silence reports to government agencies or self-regulatory organizations.

9. Mediation confidentiality. If disclosure occurs in mediation, Cal. Evid. Code § 1119 independently protects those communications.

FORM 1 — CALIFORNIA MUTUAL NONDISCLOSURE AGREEMENT

This Mutual Nondisclosure Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

• [PARTY A LEGAL NAME], a [____________________] organized under the laws of California ("Party A"), with its principal place of business at [________________________________]; and
• [PARTY B LEGAL NAME], a [____________________] ("Party B"), with its principal place of business at [________________________________].

Each a "Party" and collectively the "Parties."

1. Purpose

The Parties wish to explore a potential business relationship concerning [________________________________] (the "Purpose") and, for that limited purpose, may exchange confidential information.

2. Confidential Information

"Confidential Information" means any non-public information disclosed by one Party ("Discloser") to the other ("Recipient"), whether oral, written, electronic, or visual, that is marked, identified as confidential, or reasonably understood to be confidential under the circumstances. Confidential Information includes, without limitation, "trade secrets" as defined in Cal. Civ. Code § 3426.1(d).

3. Exclusions

Confidential Information does not include information that Recipient can demonstrate:
☐ (a) was in its possession without duty of confidentiality before disclosure;
☐ (b) is or becomes publicly available without Recipient's breach;
☐ (c) was independently developed without use of or reference to Confidential Information; or
☐ (d) was rightfully obtained from a third party without confidentiality obligation.

4. Permitted Disclosures (California-Mandated Carve-Outs)

Notwithstanding anything herein, Recipient may disclose Confidential Information:

4.1 Whistleblower Protection. To any federal, state, or local governmental agency or self-regulatory organization, or to an attorney for the purpose of reporting or investigating a suspected violation of law, pursuant to Cal. Lab. Code § 1102.5 and applicable federal whistleblower statutes. The Parties acknowledge that nothing in this Agreement shall limit or prohibit such disclosures.

4.2 Defend Trade Secrets Act Immunity Notice (18 U.S.C. § 1833(b)). An individual shall not be held criminally or civilly liable under any federal or state trade secret law for disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal.

4.3 Unlawful Workplace Conduct (Silenced No More; Cal. Gov. Code § 12964.5; Cal. Code Civ. Proc. § 1001). Nothing in this Agreement prevents disclosure of information about unlawful acts in the workplace, including sexual harassment, sexual assault, discrimination, retaliation, or any other conduct recognized as against public policy by California law.

4.4 Legal Process. Pursuant to subpoena, court order, or other legal process, provided Recipient gives Discloser prompt written notice (to the extent legally permitted) and reasonable cooperation to seek a protective order.

5. Restrictions on Use

Recipient shall: (a) use Confidential Information solely for the Purpose; (b) protect it with at least the same degree of care it uses for its own confidential information, and in no event less than reasonable care; and (c) limit access to employees, contractors, and professional advisors with a need to know who are bound by written obligations at least as protective as this Agreement.

6. No License; No Obligation

No license under any patent, copyright, trademark, or trade secret is granted by this Agreement. Neither Party is obligated to enter into any further agreement or transaction.

7. Term; Survival

This Agreement commences on the Effective Date and continues for [____] years. With respect to information that qualifies as a trade secret under Cal. Civ. Code § 3426.1, the confidentiality obligations survive indefinitely for so long as the information remains a trade secret under California law.

8. No Restraint on Lawful Profession

Consistent with Cal. Bus. & Prof. Code § 16600 and Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008), nothing in this Agreement restricts or limits either Party (or any individual) from engaging in any lawful profession, trade, or business, or from soliciting any customer or employee, except to the limited extent required to protect actual trade secrets under CUTSA.

9. Return or Destruction

Upon written request or termination, Recipient shall, within [____] days, return or destroy all Confidential Information in tangible form (including electronic copies) and certify destruction in writing, subject to customary archival and legal-hold retention.

10. Remedies

The Parties acknowledge that unauthorized disclosure may cause irreparable harm for which monetary damages would be inadequate. Discloser may seek injunctive relief under Cal. Civ. Code § 3426.2 and the common law without the requirement of posting a bond in excess of the minimum required by Cal. Code Civ. Proc. § 529. All other remedies at law or equity are preserved.

11. CUTSA Primacy; No Preemption of Contract Claims

The Parties expressly intend that their contractual remedies for breach of this Agreement shall exist concurrently with, and be preserved notwithstanding, any preemption analysis under K.C. Multimedia, Inc. v. Bank of Am. Tech. & Operations, Inc., 171 Cal. App. 4th 939 (2009).

12. Governing Law; Forum

This Agreement is governed by the laws of the State of California, without regard to its conflict-of-laws rules. The Parties consent to the exclusive jurisdiction of the state and federal courts located in [____________________] County, California. Cal. Code Civ. Proc. § 337 provides a four-year limitations period for actions on written contracts.

13. Attorney Fees

In any action to enforce or interpret this Agreement, the prevailing Party shall be entitled to recover its reasonable attorney fees and costs. Cal. Civ. Code § 1717 shall apply to make this provision mutual in all respects.

14. Entire Agreement; Parol Evidence

This Agreement constitutes the entire agreement of the Parties regarding its subject matter. Cal. Code Civ. Proc. § 1856 shall govern the admissibility of any extrinsic evidence.

15. Counterparts; Electronic Signatures

This Agreement may be executed in counterparts. Electronic signatures are enforceable under the California Uniform Electronic Transactions Act, Cal. Civ. Code §§ 1633.1 et seq.

PARTY A: [________________________________] By: [________________________________] Title: [____________________] Date: [__/__/____]

PARTY B: [________________________________] By: [________________________________] Title: [____________________] Date: [__/__/____]

FORM 2 — CALIFORNIA ONE-WAY DISCLOSURE NDA

This One-Way Nondisclosure Agreement is entered into as of [__/__/____] by [DISCLOSING PARTY] ("Discloser") and [RECEIVING PARTY] ("Recipient").

1. Purpose

Discloser will share Confidential Information with Recipient for the limited purpose of [________________________________] (the "Purpose").

2. Confidential Information

Has the same meaning as Form 1, Section 2, and includes trade secrets as defined in Cal. Civ. Code § 3426.1(d).

3. Obligations of Recipient

Recipient shall (a) hold Confidential Information in strict confidence; (b) use it only for the Purpose; (c) not reverse engineer, decompile, or disassemble any tangible materials; and (d) not disclose it to any third party without Discloser's prior written consent.

4. California Statutory Carve-Outs

Sections 4.1 through 4.4 of Form 1 (Whistleblower Protection; DTSA Immunity Notice; Silenced No More; Legal Process) are incorporated by reference.

5. No § 16600 Restraint

Nothing herein shall be construed to restrict Recipient from lawful employment or business under Cal. Bus. & Prof. Code § 16600.

6. Term

Recipient's obligations continue for [____] years for non-trade-secret information, and indefinitely for trade secrets for so long as they remain trade secrets under CUTSA.

7. Remedies; Injunction

Discloser may seek injunctive relief under Cal. Civ. Code § 3426.2 without posting bond in excess of the statutory minimum (Cal. Code Civ. Proc. § 529).

8. Governing Law; Forum; Fees

California law governs. Exclusive forum: [____________________] County, California. Cal. Civ. Code § 1717 and Cal. Code Civ. Proc. § 998 (offer of compromise) apply to fee and cost awards.

DISCLOSER: [________________________________] Date: [__/__/____]
RECIPIENT: [________________________________] Date: [__/__/____]

FORM 3 — CALIFORNIA EMPLOYEE / CONTRACTOR CONFIDENTIALITY & IP ASSIGNMENT

This Agreement is entered into as of [__/__/____] between [COMPANY NAME], a [________] organized under California law ("Company"), and [EMPLOYEE/CONTRACTOR NAME] ("Individual").

1. Confidential Information

Defined as in Form 1. Includes Company trade secrets protected under Cal. Civ. Code § 3426.1(d).

2. Nondisclosure

Individual shall not, during or after the engagement, use or disclose any Confidential Information except in the authorized performance of duties for Company.

3. No Restraint on Post-Employment Activity

The Parties expressly acknowledge that, under Cal. Bus. & Prof. Code § 16600 as amended by SB 699 and AB 1076, Individual is free after termination to:

• accept any lawful employment;
• engage in any lawful profession, trade, or business;
• solicit or serve any customer, client, or supplier of Company;
• solicit any Company employee to leave Company;
• provided only that Individual shall not misappropriate Company trade secrets as defined in Cal. Civ. Code § 3426.1.

Any provision of this Agreement that would be construed as a post-termination restraint on trade under § 16600 is void and severable, and the remainder of this Agreement shall remain in effect.

4. Assignment of Inventions

Individual hereby assigns to Company all right, title, and interest in all inventions, works of authorship, and other intellectual property created within the scope of employment or using Company resources.

5. Cal. Lab. Code § 2870 Carve-Out (Mandatory)

NOTICE PURSUANT TO CAL. LAB. CODE § 2870: The assignment in Section 4 does not apply to any invention that Individual develops entirely on Individual's own time without using the Company's equipment, supplies, facilities, or trade secret information, except for those inventions that either: (1) relate at the time of conception or reduction to practice of the invention to the Company's business or actual or demonstrably anticipated research or development, or (2) result from any work performed by Individual for the Company.

Individual acknowledges receipt of this written notice as required by Cal. Lab. Code § 2872.

6. Whistleblower / Silenced No More / DTSA Immunity

Sections 4.1, 4.2, and 4.3 of Form 1 are incorporated by reference. Nothing in this Agreement shall be construed to:

• prohibit reporting of unlawful conduct under Cal. Lab. Code § 1102.5;
• prohibit disclosure of information about harassment, discrimination, or retaliation under Cal. Gov. Code § 12964.5 and Cal. Code Civ. Proc. § 1001;
• waive any right under the Defend Trade Secrets Act immunity provisions, 18 U.S.C. § 1833(b).

7. No Reference to Non-Compete

The Parties confirm no covenant not to compete, no customer non-solicitation covenant, and no employee non-solicitation covenant is imposed by this Agreement. Any such provision would be void under § 16600 and AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (2018).

8. Cal. Lab. Code § 925 — Forum and Law

Individual primarily resides in and will perform work in California. The Parties agree this Agreement shall be governed by California law and any dispute shall be adjudicated exclusively in California, consistent with Cal. Lab. Code § 925.

9. Return of Property

Upon termination, Individual shall return all Company property, documents, devices, and Confidential Information.

10. Remedies; Injunction; Bond

Company may seek injunctive relief for actual or threatened trade secret misappropriation under Cal. Civ. Code § 3426.2. Bond requirements are limited to the minimum under Cal. Code Civ. Proc. § 529.

11. Attorney Fees

Prevailing party shall recover reasonable attorney fees and costs. Cal. Civ. Code § 1717 applies to ensure mutuality.

12. Entire Agreement; Counterparts; Electronic Signature

This Agreement is the entire agreement regarding its subject matter. Electronic signatures are valid under the California Uniform Electronic Transactions Act.

COMPANY: [________________________________] By: [________________________________] Title: [____________________] Date: [__/__/____]

INDIVIDUAL: [________________________________] Date: [__/__/____]

I acknowledge receipt of the written notification required by Cal. Lab. Code § 2872: ☐ Yes

Sources and References

• California Uniform Trade Secrets Act, Cal. Civ. Code §§ 3426–3426.11
• Cal. Bus. & Prof. Code §§ 16600, 16600.1, 16600.5 (SB 699, AB 1076)
• Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008)
• AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (2018)
• K.C. Multimedia, Inc. v. Bank of America Tech. & Operations, Inc., 171 Cal. App. 4th 939 (2009)
• Cal. Lab. Code §§ 925, 1102.5, 2870, 2872
• Cal. Gov. Code § 12964.5; Cal. Code Civ. Proc. § 1001 (Silenced No More Act)
• Defend Trade Secrets Act, 18 U.S.C. § 1833(b)
• Cal. Civ. Code §§ 1542, 1622, 1717
• Cal. Code Civ. Proc. §§ 337, 529, 998, 1856