How do I know if the definition of proprietary information in my employment NDA is too broad?

Learn how to identify overly broad proprietary information definitions in your NDA. Use TermScore to instantly flag restrictive contract clauses.

June 19, 2026TermScore Research647 words

How to Identify Overly Broad Proprietary Information Definitions

A definition of proprietary information is too broad if it fails to distinguish between legitimate trade secrets and your general industry knowledge, skills, or public information. If the clause lacks specific exclusions or captures information you acquired prior to employment, it is likely legally unenforceable and unfairly restrictive.

The Red Flags of Overly Broad Definitions

When reviewing your employment agreement, look for language that attempts to capture everything you touch or think about. An overly broad definition often serves as a "catch-all" to prevent you from working for competitors or using your own expertise elsewhere.

Common Red Flags

  • Lack of Specificity: Phrases like "all information related to the business" or "any and all data accessed during employment" are legally suspect.
  • Failure to Exclude Public Knowledge: If the definition does not explicitly state that information in the public domain is excluded, it is dangerously broad.
  • Inclusion of General Skills: Any language that claims ownership over your "general knowledge, skill, and experience" is a major red flag.
  • No Time Limitation: While trade secrets can be protected indefinitely, other "proprietary" information should have a reasonable sunset clause.

Key takeaway: If the definition of proprietary information does not allow you to distinguish between company-specific trade secrets and your own professional expertise, it is likely designed to restrict your future mobility rather than protect legitimate assets.

Action Item: Highlight any clause that does not explicitly exclude information that is "generally known in the industry" or "publicly available through no fault of the employee."

Comparing Reasonable vs. Overly Broad Clauses

FeatureReasonable DefinitionOverly Broad Definition
ScopeSpecific to trade secrets/confidential data"All information" or "anything learned"
ExclusionsPublic, third-party, and prior knowledgeNone or extremely limited
DurationDefined (e.g., 2-3 years) or "as long as it remains a secret"Perpetual, regardless of public status
Employee SkillsExplicitly excludedIncluded as company property

Action Item: Create a side-by-side comparison of your contract against the "Reasonable" column above to identify specific gaps in your protection.

The Legal Standard: Why Breadth Matters

Courts in jurisdictions like California (under Business and Professions Code Section 16600) and others with strong public policies against non-competes are increasingly hostile toward overly broad confidentiality agreements. If a definition is so broad that it effectively functions as a non-compete agreement, it may be struck down entirely.

What Courts Look For

  1. Legitimate Business Interest: Does the company actually have a secret to protect, or are they just trying to stop you from using your skills?
  2. Reasonableness: Is the definition tailored to the specific role you perform?
  3. Public Policy: Does the clause prevent you from earning a living in your chosen profession?

Key takeaway: A court is unlikely to "blue-pencil" or rewrite an overly broad contract for your employer. If the definition is unreasonable, the entire clause may be invalidated, which is a significant risk for the employer but a benefit for your defense.

Action Item: If you find a broad definition, research the "blue-penciling" laws in your state to understand if a judge will fix the contract or throw it out entirely.

How to Negotiate a Narrower Definition

If you identify an overly broad definition, you should request that the employer add a "Carve-Out" section. This section should explicitly list what is NOT proprietary information.

  • Prior Knowledge: Information you possessed before your start date.
  • General Industry Knowledge: Skills, methods, and techniques that are standard in your field.
  • Public Domain: Information that becomes public through no fault of your own.
  • Independent Development: Information you create without using company resources or confidential data.

Action Item: Propose adding a sentence at the end of the definition: "Notwithstanding the foregoing, Proprietary Information shall not include information that is or becomes generally available to the public or that was in the Employee's possession prior to the commencement of employment."

Automate Your Contract Review

Manually parsing dense legal definitions is prone to error and time-consuming. TermScore uses advanced AI to instantly scan your employment agreements, flagging overly broad definitions and comparing them against industry-standard benchmarks. By using TermScore, you can identify restrictive clauses in seconds and gain the clarity needed to negotiate with confidence.

T

TermScore Research

Our legal AI analyzes thousands of contracts to surface market standards, common pitfalls, and actionable insights for anyone who signs agreements.

Get the contract red-flag checklist

Join landlords and freelancers getting clause breakdowns and benchmark data. No spam.

Don't guess. Get your TermScore.

Upload your lease, employment contract, or agreement and let our AI flag every risk in seconds.

Score my document free