What makes an NDA definition of trade secrets legally overbroad?

An NDA is overbroad if it fails to distinguish between proprietary trade secrets and general employee knowledge, skills, or public information. If the definition captures information that is readily ascertainable or lacks reasonable efforts to maintain secrecy, it is likely unenforceable.

Can an employer claim everything is a trade secret?

No. Courts consistently reject 'catch-all' definitions that attempt to classify all company information as trade secrets. To be protected, information must derive independent economic value from not being generally known and must be subject to reasonable security measures.

How do I challenge an overbroad NDA?

You can challenge an overbroad NDA by identifying lack of specificity, arguing the information is public knowledge, or demonstrating that the clause restricts your ability to practice your profession, which violates public policy in many jurisdictions.

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How to determine if an employment NDA's definition of trade secrets is legally overbroad?

How to Determine if an Employment NDA's Definition of Trade Secrets is Legally Overbroad

An NDA definition of trade secrets is legally overbroad if it fails to distinguish between proprietary, non-public information and an employee’s general knowledge, skills, or experience. If the clause captures information that is readily ascertainable, public, or lacks specific security measures, it is likely unenforceable.

The Legal Standard for Trade Secrets

Under the Defend Trade Secrets Act (DTSA) and the Uniform Trade Secrets Act (UTSA), adopted by most U.S. states, information qualifies as a trade secret only if it meets two primary criteria: it derives independent economic value from not being generally known, and the owner has taken reasonable measures to keep it secret. If an NDA defines trade secrets to include information that does not meet these standards, it is legally deficient.

Red Flags of Overbreadth

The 'Catch-All' Clause: Language that defines trade secrets as 'any and all information learned during employment' is almost always unenforceable.
Lack of Exclusions: Failure to explicitly exclude information that is public, independently developed, or rightfully obtained from third parties.
General Skill Sets: Clauses that attempt to restrict the use of 'know-how' or general professional expertise acquired during the term of employment.
Subjectivity: Definitions that rely on the employer's sole discretion to label information as 'confidential' without objective criteria.

Key takeaway: If your NDA does not explicitly exclude information that is generally known in the industry or part of your general professional skill set, it is likely overbroad and potentially void as a restraint of trade.

Comparison: Narrow vs. Overbroad Definitions

Feature	Narrow (Enforceable)	Overbroad (Unenforceable)
Scope	Specific technical data, formulas, or client lists.	'All information' or 'everything learned.'
Exclusions	Includes public domain and general skills.	No exclusions provided.
Duration	Limited to the life of the secret.	Perpetual, regardless of public disclosure.
Security	Linked to actual protective measures.	Labels everything 'secret' by default.

Action Item

Review your contract for a 'carve-out' section. If you cannot find a list of specific exclusions (e.g., information already in the public domain), the definition is likely too broad.

Jurisdictional Variations and Public Policy

The enforceability of overbroad NDAs varies significantly by state. California, for instance, has some of the strictest protections for employees, where Business and Professions Code Section 16600 generally prohibits contracts that restrain an individual from engaging in a lawful profession. In these jurisdictions, an overbroad NDA can be viewed as an illegal non-compete agreement in disguise.

Identify the Governing Law: Check the 'Choice of Law' clause in your contract.
Assess Local Precedent: Research whether your state allows 'blue-penciling' (where a judge rewrites the contract) or if they strike the entire clause.
Evaluate Public Policy: Determine if the NDA effectively prevents you from working for competitors by labeling your basic job functions as 'trade secrets.'

Steps to Evaluate Your NDA

If you suspect your NDA is overbroad, follow this systematic approach to evaluate your risk:

Audit the Definition: Does it list specific categories (e.g., 'source code,' 'customer lists') or does it use vague, sweeping language?
Check for 'Reasonable Efforts': Does the company actually treat the information as secret (e.g., password protection, restricted access)? If they share it freely, it is not a trade secret.
Compare with Industry Standards: Is the information you are being asked to protect something that every professional in your field already knows?

Key takeaway: A trade secret must be a secret. If the information is common knowledge among your peers or easily found via a Google search, it cannot legally be protected by an NDA, regardless of what the contract says.

The Role of TermScore

Determining the legal validity of a contract clause requires precision that manual review often misses. TermScore uses advanced AI to instantly scan your employment agreements, flagging overbroad definitions, missing carve-outs, and clauses that conflict with current jurisdictional standards. By identifying these risks before you sign, TermScore empowers you to negotiate from a position of strength and clarity. Upload your contract to TermScore today to receive an automated, comprehensive analysis of your NDA's enforceability.