The South Carolina non-disclosure agreement (NDA) is a document that is used to ensure that an employee does not misuse a company’s confidential information. The disclosure of trade secrets to third (3rd) parties can result in the loss of revenue for the employer and can aid their competitors in gaining a larger share of the marketplace. It is for this reason that it is suggested that the employer put in place the necessary provisions in their NDA. If an employee signs it and breaks their contractual agreement, the employer can seek compensation for the misappropriation of their valuable information.

Laws – SC Code § 39-8 (2017)

Misappropriation – SC Code § 39-8-40 (2017)  Damages from misappropriation may include the loss caused by misappropriation as well as the unjust enrichment of the competing party. The prevailing party may be awarded attorney fees if the misappropriation occurred in bad faith (SC Code § 39-8-80 (2017)).

Trade Secret Definition (SC Code § 39-8-20 (2017)) – “Trade secret” means:

(a) information including, but not limited to, a formula, pattern, compilation, program, device, method, technique, product, system, or process, design, prototype, procedure, or code that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other person who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(b) A trade secret may consist of a simple fact, item, or procedure, or a series or sequence of items or procedures which, although individually could be perceived as relatively minor or simple, collectively can make a substantial difference in the efficiency of a process or the production of a product, or may be the basis of a marketing or commercial strategy. The collective effect of the items and procedures must be considered in any analysis of whether a trade secret exists and not the general knowledge of each individual item or procedure.