Massachusetts Non-Disclosure Agreement
The Massachusetts Non-Disclosure Agreement (NDA) is a contract that once in effect, protects a company or individual’s trade secrets (the “Disclosing Party”) from being exposed to others in a way that could substantially damage their business. If the party learning the trade secret (the “Receiving Party”) shares it with an unapproved third (3rd) party, the discloser of the trade secret(s) can potentially have the court issue an injunction (stopping the use of the secret) and/or receive compensation from damages. Massachusetts adopted the national Uniform Trade Secrets Act, officially putting the law into use on October 1st, 2018. To understand the application of this law, an overview of each section may be referred to below.
What is the UTSA & Why Was it Established?
The Uniform Trade Secrets Act (UTSA) was established in recognition of the need for the law to support businesses that operate in more than one state that wish to make use of a Non-Disclosure Agreement. Prior to the enactment of the UTSA, a company that operated in two (2) states with substantially different NDA laws faced significant difficulty applying the two (2) sets of laws to their circumstances. For instance, a company that operated in both Massachusetts and Maine would need to determine how the respective NDA laws of each state applied to their business.
Although the states that adopted the UTSA, including Massachusetts, made slight modifications to both its wording and terms, the laws are overall quite standardized across the country. Given these slight differences, citizens of each state should only reference their state’s NDA laws. Citizens of Massachusetts can learn more about their state’s version of the Uniform Trade Secrets Act in the next section.
Trade Secret Law
Massachusetts became the 49th state to accept the Uniform Trade Secrets Act (UTSA). Massachusetts’ version of the Trade Secrets Act, found in Part 1, Title XV, Chapter 93, Section 42 of Massachusetts’ General Laws, became active on October 1st, 2018. Below is a brief outline of this Act, which must be understood and followed if doing business in MA and bound under an NDA.
- § 42: Definitions of frequently used words in the Act.
- § 42A: Discusses when an injunction can be issued by the court.
- § 42B: When the complainant can recover damages caused by misappropriation.
- § 42C: Discusses what is required for the court to pay for the winning party’s attorney’s fees.
- § 42D: What the court will do to preserve the secrecy of trade secrets during litigation.
- § 42E: The statute of limitations (3 years).
- § 42F: How the act affects other laws within Massachusetts Legislature.
- § 42G: Conveys that the act is meant to be in line with the states that adopted the Act.
How to Write
Step 1 – The Disclosing Party as well as the Receiving Party must first thoroughly review each and every term in the Massachusetts Non-Disclosure Agreement. They should consider whether the terms are fair for both parties and if they will be able to uphold their end of the contract. If there are any terms that are unfair or one (1) or both parties believe they will have trouble upholding, the terms should be changed. Once done, the contract should be downloaded in either Adobe PDF or Microsoft Word.
Step 2 – Starting with the first (1st) page, enter the Current Date followed by the Names and Addresses of both the parties involved (Disclosing and Receiving Parties).
Step 3 – Head to the second (2nd) page and go to the tables. Here, both parties will need to enter their Printed Names, their Titles within their companies, the Dates in which they are signing the contract, and their full Signatures. Signing the NDA makes it active, requiring all confidential information be secret until stated in the agreement.