Non-Disclosure Agreement Law in California

In California, NDAs are enforceable only if they protect actual confidential information or trade secrets, include required whistleblower notices, and don't function as de facto non-competes that prevent you from working. These rules apply to California employers of any size.

Is my California NDA enforceable?

It depends on whether the NDA restricts lawful work, protects actual confidential information, and includes required notices. An NDA is unenforceable if it operates as a de facto non-compete, restricts protected disclosures, or lacks mandatory notices.

Notice of Rights to Disclose Unlawful Acts (Separation Agreements)

Any separation agreement containing confidentiality or non-disparagement restrictions must include a notice preserving the employee's right to disclose information about unlawful workplace conduct. The notice must state, in substantial form: "Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful" (Cal. Gov't Code § 12964.5(b)(1)(B)).

This requirement applies to agreements entered into on or after January 1, 2022. Employers must also provide at least five business days for the employee to consult an attorney, unless the employee knowingly and voluntarily waives this period (Cal. Gov't Code § 12964.5(b)(4)). Provisions violating these rules are "contrary to public policy and shall be unenforceable" (Cal. Gov't Code § 12964.5(b)(2)).

Trade Secret Identification and Marking

To enforce trade secret protections, NDAs should specify contemporaneous marking requirements. Unmarked documents disclosed to third parties do not breach the contract.

For litigation, plaintiffs must identify trade secrets with "reasonable particularity" before commencing discovery (Cal. Code Civ. Proc. § 2019.210). General descriptions are insufficient; courts require numbered, specific descriptions of claimed secrets (Perlan Therapeutics, Inc. v. Superior Court, 178 Cal. App. 4th 1333, 101 Cal. Rptr. 3d 211 (Cal. Ct. App. 4th Dist. Div. 3 2009); Quintara Biosciences, Inc. v. Ruifeng Biztech Inc., No. C 20-04808 WHA (N.D. Cal. Mar. 13, 2021)).

Federal DTSA Whistleblower Immunity Notice

California employers must comply with the federal Defend Trade Secrets Act's mandatory notice requirement. Employers must provide notice of immunity for disclosing trade secrets to government officials or attorneys to report suspected violations, either in the agreement or by cross-referencing a policy document (18 U.S.C. § 1833(b)(3)(A)–(B)). This applies to contracts entered into or updated after May 11, 2016, and covers employees, contractors, and consultants (18 U.S.C. § 1833(b)(3)(D), (b)(4)). Failure to provide notice bars recovery of exemplary damages and attorney's fees against the non-notified employee (18 U.S.C. § 1833(b)(3)(C)).

Can an NDA stop me from working for a competitor in California?

No—California voids almost all non-compete agreements, and NDAs that function as de facto non-competes may also be unenforceable. California voids "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind" (Cal. Bus. & Prof. Code § 16600(a)). A 2024 amendment codifies the California Supreme Court's broad reading from Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008): the statute voids non-compete agreements "no matter how narrowly tailored" unless they satisfy a statutory exception (Cal. Bus. & Prof. Code § 16600(b)(1)).

Critically, California prohibits judicial reformation or "blue-penciling" of overbroad non-compete agreements. The "void to that extent" language means courts cannot modify unreasonable restraints to make them enforceable—the restraint must stand or fall as written.

De facto non-compete risk: Overly broad NDAs that effectively prevent a person from working in their field may be challenged under § 16600.

What makes a California NDA unenforceable?

An NDA is unenforceable if it contains prohibited restrictions on protected disclosures, invalid forum-selection clauses, or overbroad confidentiality terms that function as a restraint on trade.

Restrictions on Protected Disclosures

Settlement Agreement Confidentiality Restrictions

California voids non-disclosure provisions in settlement agreements for:

• Sexual assault and sexual harassment (as defined in Cal. Civil Code § 51.9): agreements entered into on or after January 1, 2019 (Cal. Code Civ. Proc. § 1001(a))
• Workplace harassment, discrimination, or retaliation under FEHA (Gov't Code § 12940(a), (h), (i), (j), (k)): agreements entered into on or after January 1, 2022 (Cal. Code Civ. Proc. § 1001(d))
• Housing harassment or discrimination: agreements entered into on or after January 1, 2022 (Cal. Code Civ. Proc. § 1001(d))
• Specified sexual offenses: agreements entered into on or after January 1, 2017 (Cal. Code Civ. Proc. § 1002)

Courts cannot enter orders inconsistent with these prohibitions (Cal. Code Civ. Proc. § 1001(b)). However, the settlement amount may remain confidential (Cal. Code Civ. Proc. § 1001(e)), and the claimant's identity may be shielded at the claimant's request if no government agency is a party (Cal. Code Civ. Proc. § 1001(c)).

Out-of-State Forum and Choice-of-Law Clauses

Employers cannot require California-resident employees working primarily in California to agree to provisions requiring adjudication outside California or depriving them of California law's substantive protections (Cal. Lab. Code § 925(a)). Such provisions are "voidable by the employee," and if voided, the matter "shall be adjudicated in California and California law shall govern the dispute" (Cal. Lab. Code § 925(b)). Prevailing employees may recover reasonable attorney's fees (Cal. Lab. Code § 925(c)).

This prohibition does not apply when the employee is "in fact individually represented by legal counsel in negotiating" these terms (Cal. Lab. Code § 925(e)). "Adjudication" includes litigation and arbitration (Cal. Lab. Code § 925(d)). The statute applies to contracts entered into, modified, or extended on or after January 1, 2017 (Cal. Lab. Code § 925(f)).

Because the specific test for determining whether a worker qualifies as an 'employee' under Labor Code § 925 was not identified in available research, the scope of this protection for independent contractors remains uncertain.

What happens if I violate my NDA in California?

Violating an NDA can expose you to breach of contract damages and injunctive relief, but employers cannot recover if they failed to mark confidential information, the information wasn't a trade secret, or required notices were missing. Employees may recover attorney's fees if the employer's claim was brought in bad faith.

Reasonable Efforts to Maintain Secrecy

Trade secret protection requires information be "the subject of efforts that are reasonable under the circumstances to maintain its secrecy" (Cal. Civil Code § 3426.1(d)). Courts consider NDAs one factor among many, including access limitations, training, confidentiality markings, and return/destruction protocols. An NDA alone may be insufficient if other security measures are lacking.

In International Medical Devices, Inc. v. Robert Cornell, No. 2025-1580, 2025-1605 (Fed. Cir. Apr. 17, 2026), disclosure of an instrument list to a third party with only "boilerplate confidentiality language" and without marking extinguished trade secret protection. Where the NDA's coverage did not extend beyond the failed trade secrets, the breach-of-contract claim also failed.

Statutes of Limitations and Remedies

Available Remedies: - Injunctive relief for actual or threatened trade secret misappropriation (Cal. Civil Code § 3426.2(a)) - Damages for actual loss plus unjust enrichment, or a reasonable royalty (Cal. Civil Code § 3426.3(a)–(b)) - Exemplary damages up to twice the award for willful and malicious misappropriation (Cal. Civil Code § 3426.3(c)) - Attorney's fees for bad faith claims or willful misappropriation (Cal. Civil Code § 3426.4)

How California differs from federal and other states

California's NDA law is significantly more protective of employees and workers than the federal baseline and most other states.

Common pitfalls: Clauses that won't hold up

Overbroad confidentiality definitions. NDAs purporting to protect "all information" or information not deriving independent economic value from secrecy risk challenge. Courts enforce explicit marking requirements strictly; failure to mark may defeat breach claims.

De facto non-compete through confidentiality. Restrictions so broad they effectively prevent competitive employment may be void under Cal. Bus. & Prof. Code § 16600. Given uncertainty whether blue-penciling applies to NDAs, overbroad provisions may void the entire confidentiality obligation.

Restricting protected disclosures. Provisions that inadvertently or intentionally restrict statutorily protected disclosures—wages, working conditions, suspected legal violations, or unlawful workplace acts—are unenforceable and may expose employers to penalties.

Invalid forum selection. Designating non-California forums or law for California-resident employees without individual counsel representation triggers voidability, mandatory California adjudication, and potential fee-shifting.

Settlement NDA overreach. Confidentiality provisions in settlement agreements for covered claims (sexual assault, harassment, workplace/housing discrimination) are void as a matter of law, with only settlement amounts and claimant identity protection (under limited conditions) permitted to remain confidential.

Because whether your NDA is a de facto non-compete depends on your specific job duties and industry, Ask Sawyer researches federal and state law to answer questions about your facts. Because the trade secret status of your information depends on your employer's security practices, Ask Sawyer can help analyze your specific situation.