Nondisclosure Agreements for Technology Companies

Updated August, 2026.

Technology companies often possess valuable information that cannot or should not be protected through traditional intellectual property registrations. This article explains how carefully drafted nondisclosure agreements, combined with appropriate internal security practices, can help companies protect trade secrets and other proprietary information. 

Key Takeaways

• NDAs can protect valuable information that may fall outside traditional patent, copyright, or trademark protection.
• Confidential information should be clearly defined rather than described in overly broad terms.
• An NDA should explain how protected information may be accessed, used, shared, stored, and returned.
• Businesses must take reasonable steps to protect information they consider trade secrets.
• Employee NDAs must account for legally protected disclosures and other employee rights.
• Confidentiality provisions should not be used as substitutes for unenforceable non-compete restrictions.
• Technology companies should combine written agreements with practical information-security policies.

Nondisclosure Agreements and Technology Companies

While intellectual property laws present a significant amount of protection to individuals and companies, some “creations” are not capable of being protected through patents, copyrights, and/or trademarks. This is why many companies (especially companies on the cutting edge of technological developments) will have their employees sign nondisclosure agreements. These agreements essentially prohibit the employee from taking trade secrets and other confidential information revealed to them by the company and disclosing this information to competitors or others.

The Purpose of Nondisclosure Agreements

Technology appears to be progressing at breakneck speed and has been for some time. When one considers that, in the span of approximately 200 years or so, humanity has gone from the first car powered by an internal combustion engine (albeit one fueled by hydrogen) to driverless cars and vehicles powered by clean, renewable sources, one cannot help but be amazed at the pace of human achievement. Central to the development of new technology is the ability of a company to keep its trade secrets … well, secret.

Problems with Nondisclosure Agreements

It is simply not enough for most technology companies to simply have their employees sign an agreement that says the employee will not disclose secrets. Such a vague nondisclosure agreement is unlikely to be enforceable and leaves the company – and its ideas – at risk. Instead, the nondisclosure agreement should:

• Identify what is considered “confidential information.” Before an employee can keep confidential information secret, the employee must know what information is confidential. A company is not able to simply claim any information it shares with its employees to be confidential. Instead, the nondisclosure agreement should describe confidential information with some particularity – trade secrets, ideas that have not yet been patented, and/or information about the workings of the business, for example.
• Detail what can – and cannot – be done with the information. When an employee receives confidential information, what can he or she do with it? Can he or she share the information with a coworker or supervisor? Can he or she copy a blueprint to share with others within the company? Under what circumstances should the information be returned to the employer? These considerations should be addressed in a nondisclosure agreement.

Finally, a nondisclosure agreement should be paired with company policies and practices that are designed to restrict the dissemination of confidential information. It is difficult to claim certain information is meant to be secret when the company makes no effort to actually keep the information secret.

Contact JGPC Law for Assistance with Your Nondisclosure Agreement

All of this should convince the technology business owner to draft a customized and detailed nondisclosure agreement to protect those ideas and creations that cannot be protected by trademarks, patents, and/or copyrights. JGPC Law and its team of experienced business attorneys can help you do just this. Contact our firm for prompt and knowledgeable assistance in drafting effective nondisclosure agreements. We help clients in the Livermore, Pleasanton, San Leandro, Oakland, Walnut Creek, Fremont, and Danville areas. Call us at (925) 463-9600 or contact us through our website today.

The content presented in this article is for general informational purposes only. It is not, nor is it intended to be, legal advice. It does not constitute the formation of an attorney-client relationship. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Frequently Asked Questions

Why are NDAs important for technology companies?

Technology companies frequently rely on proprietary information, software, research, product plans, algorithms, technical processes, and other information that provides a competitive advantage. NDAs can establish contractual obligations governing how that information is used and disclosed.

What information can a technology company protect with an NDA?

An NDA may cover trade secrets, source code, technical specifications, product development plans, customer information, business strategies, research, pricing information, and other legitimately confidential business information.

Can an NDA protect information that cannot be patented?

Potentially, yes. Some information that does not qualify for patent, copyright, or trademark protection may still qualify for contractual confidentiality or trade secret protection.

Can a California employer require employees to sign an NDA?

California employers can use appropriately drafted confidentiality agreements, but those agreements must comply with state and federal laws protecting employee rights and certain legally protected disclosures.

Can an NDA prevent an employee from working for a competitor?

An NDA should protect confidential information rather than function as a disguised non-compete agreement. California places significant restrictions on agreements that prevent employees from engaging in lawful employment after leaving a company.

What should a technology company do besides requiring NDAs?

Companies should use practical security measures such as access controls, employee training, information classification, secure data storage, and procedures for returning or deleting confidential materials when an employee leaves.

What happens if an employee violates an NDA?

Available remedies depend on the agreement and circumstances. A company may be able to seek injunctive relief, monetary damages, or other remedies when confidential information or trade secrets are improperly used or disclosed.