A nondisclosure agreement usually lasts anywhere from one to five years for ordinary business information, and courts expect a reasonable time limit rather than an open-ended one. The major exception is trade secrets, which an NDA can protect indefinitely as long as the information stays secret and the owner keeps taking reasonable steps to guard it. Federal law also overrides whatever duration the NDA states in a few specific areas, so the stated term is only part of the picture.
Every NDA Runs on Two Clocks
Before the length of an NDA makes sense, it helps to see that every agreement carries two separate time periods doing two different jobs.
The first is the term of the agreement itself: the window during which the parties can exchange confidential information under the NDA. That might match the length of a negotiation, a project, or a business relationship. The second is the confidentiality obligation, often set out in a “survival clause,” which is how long the receiving party has to keep already-shared information secret after the agreement ends.
The two clocks are commonly different. An NDA might have a two-year term for exchanging information, with a survival clause requiring confidentiality for another three years after that. Survival periods of one to five years are standard for general business information. For trade secrets, a well-drafted NDA ties the survival period to how long the information actually remains a trade secret, which can mean the obligation never expires.
If an NDA doesn’t clearly separate the two, disputes about what’s still covered become almost inevitable.
What Courts Treat as a Reasonable Length
Courts judge an NDA’s duration by whether it’s reasonable given what the information is and how long it stays valuable. A short-lived marketing plan doesn’t justify a ten-year confidentiality period. Long-term product development data or detailed financial projections might. The main factors are the type of information, its commercial shelf life, and industry norms.
Courts also weigh the disclosing party’s legitimate interest in secrecy against the receiving party’s ability to work and compete. An indefinite lock on general business information that changes regularly, like pricing strategies or customer preferences, starts to look like a restraint on trade rather than genuine protection of secrets. That’s where judges push back.
Typical ranges by context:
- One to three years for sales discussions, early negotiations, or preliminary evaluations.
- Three to five years for joint ventures, licensing deals, and deeper commercial relationships.
- Anything past five years for non-trade-secret information draws increasing judicial skepticism.
Trade Secrets: The One Category That Can Last Forever
Trade secrets are the exception that makes indefinite NDAs enforceable. A trade secret can be protected for an unlimited period of time, unless it is discovered or legally acquired by others and disclosed to the public.1WIPO. Frequently Asked Questions: Trade Secrets A manufacturing process that stays secret for fifty years is just as protectable in year fifty as in year one.
Under the federal Defend Trade Secrets Act, a trade secret is financial, business, scientific, technical, or engineering information that meets two conditions. The owner has taken reasonable measures to keep it secret, and the information gets its economic value from the fact that others don’t know it and can’t easily figure it out through legitimate means.2Office of the Law Revision Counsel. 18 US Code 1839 – Definitions Proprietary formulas, unique manufacturing processes, and competitive algorithms are typical examples. Nearly every state has also adopted a version of the Uniform Trade Secrets Act, giving owners a consistent baseline across the country.
Indefinite Protection Requires Active Effort
The catch: if you treat your supposed trade secret carelessly, a court can decide it doesn’t qualify for protection at all, no matter what the NDA says. The “reasonable efforts” standard is applied case by case, taking into account the value of the secret, the size of the company, and the complexity of its operations.3USPTO. Protecting a Trade Secret
Steps that courts and regulators generally recognize as reasonable include:
- Limiting access to employees who genuinely need the information, with digital permissions and physical safeguards.
- Requiring anyone with access, including employees, contractors, and prospective partners, to sign NDAs that specifically acknowledge the confidentiality obligation.
- Training employees on handling confidential information regularly, not just at onboarding.
- Making sure departing employees return or destroy trade secret materials and reaffirm their ongoing obligations before they leave.
- Labeling materials containing trade secrets as confidential, and doing so consistently.
That last point matters more than it looks. Courts have ruled against trade secret claims where a company had a policy requiring confidentiality labels but the specific stolen documents were unmarked, treating the inconsistency as evidence the company didn’t really consider the information secret. Marking isn’t legally required, but a marking policy has to be applied evenly.3USPTO. Protecting a Trade Secret
Federal Limits That Override Any Stated Duration
Even an NDA with a reasonable term can be unenforceable in the parts that touch federally protected activity. Three areas come up most.
Reports to the SEC
No NDA can prevent someone from reporting a possible securities law violation to the SEC. Federal regulations prohibit any person from taking action to impede communication with Commission staff about potential violations, including enforcing or threatening to enforce a confidentiality agreement.4eCFR. 17 CFR 240.21F-17 – Staff Communications With Individuals Reporting Possible Securities Law Violations In 2024, three affiliated financial firms paid a combined $240,000 in civil penalties after requiring clients to sign confidentiality agreements that restricted their ability to report disputes to the SEC. Some of the agreements required clients to represent they would “forever refrain” from reporting to securities regulators.5SEC. SEC Charges Broker-Dealer Nationwide Planning and Two Affiliated Advisory Firms Language that could be read as discouraging contact with a federal agency is unenforceable and can expose the company to penalties regardless of the NDA’s duration.
Employee Rights Under the NLRA
The National Labor Relations Act protects employees’ rights to engage in concerted activity for mutual aid or protection.6National Labor Relations Board. National Labor Relations Act In its 2023 McLaren Macomb decision, the National Labor Relations Board ruled that employers may not offer severance agreements requiring employees to broadly waive those rights, finding that merely offering overly broad confidentiality and non-disparagement clauses was itself a violation.7National Labor Relations Board. Board Rules That Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights For non-supervisory employees, an NDA that chills conversations about wages, working conditions, or workplace concerns is vulnerable no matter how long it says it lasts.
The Speak Out Act
The Speak Out Act, signed into law in December 2022, makes pre-dispute NDAs and non-disparagement agreements unenforceable when they relate to sexual assault or sexual harassment claims. The critical detail is timing. The law targets agreements signed before any dispute arises, such as a standard employment NDA signed on the first day of a job. Settlement agreements signed after allegations have already been made are not affected, and NDA provisions protecting legitimate trade secrets and proprietary information remain intact. Several states have enacted similar or broader restrictions on NDAs tied to workplace harassment.
What Happens If a Court Finds the Duration Too Long
An unreasonable duration doesn’t always sink the entire agreement. Most jurisdictions let a court modify the offending provision, and the two main approaches differ in significant ways.
Traditional “blue-penciling” lets a court cross out the offending language and enforce what remains. If the NDA says “20 years” and the court considers that unreasonable, the court strikes those words, and whether the rest still makes sense on its own decides whether any confidentiality obligation survives. The more modern approach, sometimes called judicial reformation, gives courts broader power to rewrite the unreasonable term, for example reducing a 20-year term to three or five years and enforcing the balance of the agreement as modified.
Which approach applies depends on the jurisdiction. Some states allow only strict blue-penciling, some permit full reformation, and others fall in between. A few courts will refuse to modify an overly broad clause at all, especially when the term looks designed to intimidate rather than protect legitimate interests. In those cases, the confidentiality provision, or sometimes the whole agreement, becomes unenforceable. Drafting an aggressive duration and counting on a court to trim it back is a gamble that can go either way.