Are perpetual confidentiality clauses in NDAs void for software developers in North Dakota?

Are perpetual confidentiality clauses in NDAs void for software developers in North Dakota?

In North Dakota, perpetual confidentiality clauses are not automatically void, but they are subject to strict judicial scrutiny. If a clause functions as an unreasonable restraint on trade or prevents a developer from practicing their profession, it may be unenforceable under North Dakota Century Code § 9-08-06.

Key takeaway: North Dakota courts prioritize the right to work. Any NDA that effectively bars a software developer from utilizing their general industry knowledge will likely be struck down, regardless of whether it is labeled as 'confidentiality' or 'non-compete'.

The Legal Landscape: N.D.C.C. § 9-08-06

North Dakota maintains one of the most employee-friendly legal environments in the United States. Section 9-08-06 of the North Dakota Century Code states that 'every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void.' While this statute is famous for invalidating non-compete agreements, it also acts as a powerful filter for overreaching confidentiality agreements.

Why 'Perpetual' is a Red Flag

For software developers, technology cycles move rapidly. A piece of code or a specific architecture that is 'confidential' today may be obsolete in 18 to 24 months. A perpetual clause—one that lasts forever—is inherently suspicious to a North Dakota judge because it serves no legitimate business interest once the information enters the public domain or becomes common industry knowledge.

• Overbreadth: Does the clause cover general programming languages, frameworks, or methodologies?
• Public Domain: Does the clause attempt to restrict information that is already widely known?
• Professional Growth: Does the clause prevent you from working on similar projects for future employers?

Action Item: Review your current NDA. If the definition of 'Confidential Information' includes your general skills, experience, or knowledge acquired during employment, it is likely unenforceable in North Dakota.

Comparing NDA Restrictions

How Courts Evaluate Confidentiality Clauses

When a dispute arises, North Dakota courts apply a 'reasonableness' test. Even though the state is hostile to restraints on trade, they do recognize that companies have a right to protect genuine trade secrets. To survive a challenge, a confidentiality clause must meet these three criteria:

1. Legitimate Interest: The employer must prove they are protecting a specific, valuable trade secret (e.g., a proprietary algorithm) rather than just trying to prevent you from working for a competitor.
2. Narrow Scope: The restriction must be limited to specific, identifiable information.
3. Reasonable Duration: While 'perpetual' is rarely reasonable, a duration tied to the shelf-life of the technology is often viewed more favorably.

Key takeaway: If your NDA prevents you from using your 'general knowledge and skill,' it is a de facto non-compete. In North Dakota, this is a major legal vulnerability for the employer.

Practical Steps for Software Developers

If you are presented with an NDA containing a perpetual confidentiality clause, follow these steps to protect your career mobility:

1. Request a Sunset Clause: Negotiate for a specific timeframe, such as 12 or 24 months post-employment.
2. Exclude General Knowledge: Ensure the contract explicitly states that 'Confidential Information' does not include knowledge, skills, or information generally known in the software development industry.
3. Define the 'Secret': Ask for a clear definition of what constitutes proprietary information. If the employer cannot define it, the clause is likely too vague to be enforceable.

The Risk of 'Blue-Penciling'

Some states allow courts to 'blue-pencil' or rewrite an overly broad contract to make it reasonable. North Dakota courts are generally less inclined to save an employer from their own overreaching drafting. If a clause is found to be an illegal restraint on trade, the court may simply void the entire provision, leaving the employer with no protection at all.

Action Item: Never assume that a signed contract is the final word. If you are being threatened with legal action based on a perpetual NDA, consult with a local attorney to determine if the clause violates N.D.C.C. § 9-08-06.

TermScore provides an automated, AI-driven analysis of your employment contracts to flag these exact issues. By uploading your agreement, you can instantly identify clauses that deviate from standard legal protections or violate state-specific statutes like North Dakota’s, ensuring you understand your risks before you sign.