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When a non-disclosure agreement (NDA) mentions:

  1. The signer can't solicit employees for 1 year.
  2. This solicitation restriction is extended if other parts of the NDA are breached
  3. All NDA obligations apply to the signer's assigns, heirs, administrators, executors, and representatives
  4. The contract is binding to the successors and assigns of the Company

I interpret this to mean 1) and 2) expires, but all the other aspects are in effect indefinitely. That said, I've heard that California has laws that benefit the employee relative most states. Is there such a law that requires NDAs to expire after a certain amount of time, regardless of what the contract says?

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    why should it expire? An NDA is not a non-compete clause.
    – Tiger Guy
    Feb 1 at 0:05
  • @TigerGuy Can you elaborate on your second sentence? Feb 1 at 0:13
  • 2
    @JohnnyDohe There are legal doctrines that limit non-competition agreements to staying in force for only a reasonable time if they are allowed at all. The same rules don't apply to non-disclosure agreements (NDAs).
    – ohwilleke
    Feb 1 at 1:26
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    NDA's do not limit future employment, they prevent disclosure of company secrets. Employees do not need to be protected from onerous NDA's.
    – Tiger Guy
    Feb 1 at 2:59

1 Answer 1

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Is there such a law that requires NDAs to expire after a certain amount of time, regardless of what the contract says?

No. Not really.

There is a statute of limitations which says that if an NDA is breached that a lawsuit for breach of the NDA must be filed within a certain amount of time.

The equitable doctrine of laches can be used to bar certain kinds of lawsuits if delay in enforcing one's rights prejudices someone trying to defend against a lawsuit that isn't barred by the statute of limitations, effectively making the right that the lawsuit seeks to enforce unenforceable. But, laches really only comes into play once a legal (or "equitable") right have been violated, which doesn't happen when someone is honoring an NDA.

However, at some point, if the Company that is the other party ceases to exist, or the NDA information becomes public knowledge, there may be no one in a position to claim that they are harmed by a breach of the NDA which is something that the person suing must show to have standing to sue for a breach of the NDA.

The only other really conceivable impediment to the continued effect of the NDA would be the "rule against perpetuities" which primarily exists to prohibit trusts that never end.

This NDA binds the person who signs it. The NDA would also bind their probate estate (since the NDA that is binding on "the signer's assigns, heirs, administrators, executors, and representatives"), which would have to be opened within a few years of the person's death and would have to be closed within a few years of that.

But the NDA would not bind signer's next of kin in any respect other than in their capacity as an executor (because a parent doesn't have an legal right to bind his "heirs" in a general sense, only in relation to any inheritance that the heirs may receive). The next of kin didn't sign it and aren't bound by a dead relative's promises.

For the Rule Against Perpetuities to apply, the NDA would have to still be in effect more than twenty-one years after the signer died. But, this isn't reasonably possible given the deadlines for opening and closing probate estates, so the Rule Against Perpetuities does not invalidate or shorten the NDA term. (There is probably also another separate and distinct reason that the Rule Against Perpetuities does not invalidate the NDA related to commercial contracts, but that reason is more complex and there is no need to discuss it when the Rule Against Perpetuities is already inapplicable for at least one reason.)

There is no other legal doctrine that would directly limit how long the NDA can be in force to a particular time period. So, the obligation to keep these secrets continues until the person signing it dies and their probate estate is closed.

This result doesn't seem implausible. The same rule (i.e. that the obligation to keep the secret never expires) applies, for example, to lawyers, doctors, psychiatrists, and priests who are keeping legally protected secrets for someone.

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