How to identify if an employment NDA's definition of proprietary information is legally overbroad?

How to Identify Overbroad NDA Definitions

An employment NDA's definition of proprietary information is legally overbroad if it fails to distinguish between protectable trade secrets and an employee's general skills, knowledge, or public information. If the definition captures information that is readily ascertainable or lacks specific exclusions, it is likely unenforceable.

The Anatomy of an Overbroad Definition

Overbroad definitions are designed to intimidate employees into silence by claiming everything they touch is a trade secret. To identify these, look for the following red flags:

• Lack of Specificity: The clause uses vague terms like "all information related to the company" without defining what constitutes a trade secret.
• Failure to Exclude Public Knowledge: The definition does not explicitly state that information already in the public domain is excluded.
• Inclusion of General Skills: The clause attempts to claim ownership over the employee's "general knowledge, skill, and experience" gained during employment.
• No Temporal Limit: The definition implies that the information remains proprietary indefinitely, even if it becomes obsolete or public.

Key takeaway: If a definition includes "all information learned during employment," it is almost certainly overbroad. Protectable information must be limited to actual trade secrets or confidential business data that provides a competitive advantage.

Comparison: Reasonable vs. Overbroad Definitions

Step-by-Step Audit of Your NDA

1. Identify the "Catch-All" Language: Scan for phrases like "including but not limited to" followed by an exhaustive list that covers every aspect of your daily work.
2. Check for Public Domain Carve-outs: Ensure the contract explicitly states that information known to the public through no fault of the employee is not confidential.
3. Verify Independent Development: Look for language that protects information you developed on your own time, without using company equipment or proprietary data.
4. Assess the "General Knowledge" Clause: Ensure the agreement does not prohibit you from using the general skills and professional expertise you acquired while working for the firm.

Jurisdictional Considerations

The enforceability of these definitions varies significantly by state. For example, California law is notoriously hostile toward overbroad restrictive covenants. Under California Business and Professions Code Section 16600, any contract that restrains an individual from engaging in a lawful profession is void. If an NDA defines "proprietary information" so broadly that it effectively prevents you from working for a competitor by claiming your general knowledge is a trade secret, it may be struck down in its entirety.

Practical Action Items

Before signing, perform a "redline test." If you cannot clearly explain what information is protected versus what is public, the definition is too vague. Request that the employer add a specific list of what they consider confidential, or ask for a carve-out for "general knowledge and skills acquired during the course of employment."

TermScore can automatically analyze your employment contracts to identify overbroad definitions, flagging vague language and missing exclusions in seconds. By comparing your document against industry-standard benchmarks, TermScore provides the clarity you need to negotiate with confidence.