NDA Enforceability in New York: Key Considerations

NDAs in New York

Non-disclosure agreements are foundational in New York's financial services, media, technology, and real estate sectors. They protect trade secrets, deal terms, client lists, and proprietary business strategies.

New York's Legal Framework for NDAs

New York enforces NDAs under common law contract principles and its trade secret protections. While New York has not adopted the Uniform Trade Secrets Act, it protects trade secrets through common law, requiring the information to derive value from its secrecy and that reasonable steps were taken to maintain confidentiality.

New York courts have long upheld reasonable NDAs. In Ashland Management Inc. v. Janien (1993), the Court of Appeals confirmed that confidentiality agreements are enforceable when they protect legitimate interests.

Important Recent Changes

New York has enacted significant restrictions on NDAs in certain contexts:

• Section 5-336 of the General Obligations Law — Effective 2018, restricts NDAs in sexual harassment settlement agreements. Victims cannot be prevented from disclosing the underlying facts unless the condition is their preference
• Clean Slate Act amendments — Additional restrictions on NDAs that silence employees about workplace discrimination and harassment have been introduced

Factors Courts Evaluate

• Specificity of protected information — Vague descriptions of confidential information weaken enforceability
• Reasonable duration — NDAs with no expiration may be narrowed or invalidated
• Adequate consideration — Employment alone may serve as consideration, but the timing matters
• Not a disguised non-compete — An NDA so broad that it prevents the signer from working in their industry may be reformed

Red Flags

• The NDA prevents you from disclosing workplace harassment or discrimination
• "Confidential information" is defined to include general skills and industry knowledge
• The agreement has a perpetual duration with no carve-outs
• It requires you to return or destroy personal notes and general knowledge upon termination

When to Consult a Lawyer

Consider consulting a New York attorney if an NDA relates to a sexual harassment settlement, appears to cover non-confidential information, or effectively prevents you from working in your field. Recent legislative changes may provide important protections.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.