📋 Overview

You've received a demand letter alleging you breached a Non-Disclosure Agreement (NDA) or confidentiality provisions. These claims can arise from business relationships, employment, M&A due diligence, or partnership discussions. In California, NDA claims are governed by contract law, with additional exposure under the California Uniform Trade Secrets Act (CUTSA, Civil Code 3426) if trade secrets are involved.

⚠ Injunction Risk

NDA claims often seek TROs and preliminary injunctions to stop disclosure immediately. You may have very little time to respond before facing a court hearing.

🕒 Preserve Evidence

Do NOT delete any documents, emails, or files related to the alleged disclosure. Spoliation of evidence can result in severe sanctions.

💰 Damages Exposure

Damages may include actual losses, unjust enrichment, and if willful, punitive damages up to 2x under CUTSA plus attorney fees.

Common NDA Breach Allegations

  • Unauthorized disclosure - Sharing confidential info with third parties
  • Using for competition - Using information to compete with the disclosing party
  • Failure to return materials - Not returning or destroying confidential documents as required
  • Disclosure to new employer - Sharing former employer's secrets at new job
  • Publication - Posting or publishing protected information publicly
  • Improper access - Accessing confidential systems after departure
$450
Attorney Response on Letterhead

NDA review, legal analysis, professional response with up to 2 revisions. Protects against overreaching claims.

Schedule Review

🔍 Evaluate the Claim

Before responding, carefully review the NDA and analyze whether the alleged information and conduct are actually covered.

Risk Assessment Matrix

Alleged Conduct Potential Exposure Risk Level
Disclosing trade secrets to competitor Injunction + damages + 2x punitive + fees HIGH
Starting competing business with secrets Injunction + disgorgement + punitive damages HIGH
Sharing with new employer Damages + injunction + attorney fees HIGH
Failure to return documents Breach damages + court order to return MEDIUM
Disclosure of non-trade-secret info Contract damages only, no CUTSA claim LOW

📄 NDA Analysis

  • ✓ Exact definition of "confidential information"
  • ✓ Permitted uses and exceptions
  • ✓ Duration of confidentiality obligations
  • ✓ Return/destruction requirements

📝 Information Analysis

  • ✓ Was info marked confidential?
  • ✓ Is it truly a trade secret?
  • ✓ Was it publicly available?
  • ✓ Did you independently develop it?

⚠ Trade Secrets vs. Confidential Information

Not all confidential information is a trade secret. Under CUTSA, trade secrets require: (1) information that derives independent economic value from not being generally known, AND (2) reasonable efforts to maintain secrecy. If it doesn't meet both prongs, only contract claims apply - no enhanced CUTSA damages or attorney fees.

🛡 Your Defenses

California law provides several defenses to NDA breach and trade secret claims.

Not "Confidential Information" Under the NDA

Many NDAs narrowly define what constitutes confidential information. If the alleged disclosure isn't covered by the definition, there's no breach.

When to use: The information doesn't fit the NDA's definition, wasn't marked confidential, or falls within an exclusion.

Information Was Public or Already Known

Most NDAs exclude information that was public, already known to you, or received from a third party. Under CUTSA, public information can't be a trade secret.

When to use: You can show the information was publicly available or you learned it elsewhere.

Independent Development

If you independently developed the information without using the disclosing party's confidential information, that's a complete defense to both NDA and trade secret claims.

When to use: You have records showing you developed the information on your own before or without reference to their data.

Confidentiality Period Expired

Many NDAs have defined terms (2-5 years). If the confidentiality period has expired, your obligations may have ended (except for true trade secrets, which remain protected).

When to use: The NDA's confidentiality term has lapsed and the information isn't a statutory trade secret.

No Damages / No Actual Disclosure

Contract damages require actual harm. If there was no actual disclosure or no resulting damage, there may be no recovery even if a technical breach occurred.

When to use: They can't show you actually disclosed anything or that any harm resulted.

Whistleblower / Legal Protection

California and federal law protect disclosure of trade secrets in confidence to attorneys or government officials for reporting suspected violations of law.

When to use: The disclosure was made to report legal violations to proper authorities or counsel.

🚨 Weak Defenses to Avoid

  • "I didn't think it was important" - Your subjective view doesn't matter
  • "Everyone talks about this stuff" - Industry gossip doesn't make it public
  • "I forgot I signed the NDA" - Ignorance isn't a defense
  • "They weren't protecting it well" - Poor security affects trade secrets, not contracts

⚖ Response Options

Based on your evaluation, choose the appropriate response strategy.

Immediate Containment

If you did disclose something, take immediate steps to contain further spread. Return/destroy documents. Notify recipients to stop use. Shows good faith.

  • Limits ongoing harm
  • Demonstrates good faith
  • May avoid injunction

Dispute the Claim

If the information isn't actually confidential or you have strong defenses, push back firmly on the claim.

  • Preserves position
  • May deter weak claims
  • Creates negotiation leverage

Negotiate Resolution

Agree to specific injunctive terms, return of materials, or other remedies in exchange for release of damage claims.

  • Avoids litigation costs
  • Stops escalation
  • Achieves certainty

Request Specificity

Demand they identify exactly what was disclosed, to whom, and when. Vague claims may be fishing expeditions.

  • Exposes weak claims
  • Clarifies issues
  • Buys time

📊 NDA Claim Exposure Analysis

Example: Trade secret disclosure claim

Actual damages (lost profits) $150,000
Unjust enrichment / royalty $75,000
Exemplary damages (2x if willful) $150,000
Their attorney fees (CUTSA) $100,000+
Your defense costs $75,000+
MAX EXPOSURE IF YOU LOSE $550,000+

💡 Early Resolution Benefits

NDA claims are expensive to litigate because they often involve emergency motions, expert witnesses, and forensic analysis. Resolving early - even with some payment - often makes economic sense compared to full litigation.

📝 Sample Responses

Copy and customize these response templates for your situation.

Request for Specificity
We acknowledge receipt of your demand letter dated [DATE] alleging breach of the Non-Disclosure Agreement dated [DATE]. Your letter contains general allegations but lacks the specificity necessary for us to respond substantively. Please identify with particularity: (1) the specific information you allege was disclosed, (2) to whom it was allegedly disclosed, (3) when the alleged disclosure occurred, and (4) how you learned of the alleged disclosure. Additionally, please explain how the allegedly disclosed information qualifies as "Confidential Information" under Section [X] of the NDA and how it was not subject to any of the exclusions in Section [Y]. We will respond substantively within 14 days of receiving this information. We reserve all rights and defenses.
Dispute - Not Confidential Information
We have reviewed your demand letter and the NDA dated [DATE] and reject your claim of breach. The information you allege was disclosed does not constitute "Confidential Information" under the NDA for the following reasons: 1. Under Section [X] of the NDA, "Confidential Information" means [quote definition]. The information at issue does not fall within this definition because [explain why]. 2. Alternatively, the information falls within the exclusion in Section [Y] because [it was already publicly available / we independently developed it / we received it from a third party without restriction]. 3. The information you describe is not a trade secret under California Civil Code Section 3426.1 because [it was not subject to reasonable secrecy measures / it does not derive economic value from being secret / it was generally known in the industry]. We deny any breach and reserve all rights.
Containment and Resolution Offer
We acknowledge your concerns regarding the NDA dated [DATE]. While we dispute the characterization in your letter, we are committed to honoring our confidentiality obligations. In good faith, we have taken the following immediate steps: 1. [Returned/destroyed all documents received from your company] 2. [Notified any recipients to cease use and return materials] 3. [Implemented additional safeguards regarding XYZ] To resolve this matter without litigation, we propose: - Execution of a certification of compliance with the NDA's return obligations - Mutual release of all claims arising from the NDA - [Other terms as appropriate] This proposal is made pursuant to Evidence Code Section 1152. We believe this resolution serves both parties' interests better than costly litigation.
Defense - NDA Term Expired
We dispute your claim that we breached the Non-Disclosure Agreement dated [DATE]. The NDA provides in Section [X] that confidentiality obligations expire [NUMBER] years from the effective date. The NDA was signed on [DATE], making the expiration date [DATE]. The conduct you complain of occurred on [DATE], after the confidentiality period expired. The information at issue also does not qualify as a statutory trade secret under California Civil Code Section 3426.1. Specifically, [explain why - not economically valuable from secrecy, not maintained in secrecy, generally known in industry, etc.]. We therefore reject your claim in its entirety. Any further demands or litigation will be vigorously defended, and we will seek recovery of our attorney fees under applicable law.

🚀 Next Steps

What to do after receiving an NDA breach allegation.

Step 1: Stop and Preserve

Immediately stop any ongoing use or disclosure. Preserve all documents and communications - do NOT delete anything.

Step 2: Review the NDA

Read every word. Focus on definitions, exclusions, term limits, and remedies provisions.

Step 3: Analyze the Information

Is the alleged information really covered? Was it publicly available? Did you get it elsewhere? Is it truly a trade secret?

Step 4: Respond Strategically

Choose your approach based on risk level and merits. Don't ignore - but don't over-admit either.

If They Seek Injunction

  • TRO may come fast - You might get only 24-48 hours notice before a hearing
  • Prepare declarations - Have evidence of your defenses ready
  • Consider stipulated order - Agreeing to injunction terms may avoid adverse findings
  • Bond requirement - They may need to post security for wrongful injunction

If They File Suit

  • Answer within 30 days - Assert all defenses
  • Consider anti-SLAPP - If speech-related, California's anti-SLAPP statute may apply
  • Early motion practice - Definition issues can be resolved on summary judgment
  • Discovery disputes - NDA cases often involve protective orders for sensitive discovery

Get Professional Help

NDA breach allegations can escalate to emergency injunctions. Get a professional response letter drafted on attorney letterhead.

Schedule Consultation - $450

California Resources

  • Civil Code 3426-3426.11: California Uniform Trade Secrets Act (CUTSA)
  • 18 U.S.C. 1833: Federal trade secret whistleblower immunity
  • CCP 337: 4-year statute of limitations for written contracts
  • Civil Code 3426.6: 3-year limitations for CUTSA claims