Protecting Confidential Business Information in Nevada
Every business has information it cannot afford to lose. It may be a customer list built over a decade, a pricing model, proprietary software, or an internal process that lets the company do the work faster and cheaper than its competitors. Nevada law protects that information. The protection, however, is not automatic. It belongs to the business that can prove the information has value and that the business took reasonable steps to keep it secret.
Nevada’s Uniform Trade Secrets Act, codified at NRS Chapter 600A, gives business owners meaningful remedies, including injunctions, damages, and in some cases attorney’s fees. Those remedies are only as strong as the groundwork the business laid before the dispute began. At ABW Firm, our attorneys help Nevada businesses build that groundwork through carefully drafted agreements and practical internal policies, and we litigate trade secret disputes in Nevada courts when that groundwork is tested.
Nevada Trade Secret Protection at a Glance
Before building a strategy to protect proprietary information, every Nevada business owner should understand five points:
A trade secret must derive independent economic value from not being generally known, and the owner must make reasonable efforts to keep it secret. NRS 600A.030.
Marking information “Confidential” or “Private” creates a statutory presumption that the owner made reasonable efforts to protect it. NRS 600A.032.
Nevada courts may enjoin both actual and threatened misappropriation. NRS 600A.040.
Willful, wanton, or reckless misappropriation can support exemplary damages of up to twice the damages award, and willful and malicious misappropriation can support an award of attorney’s fees. NRS 600A.050(2); NRS 600A.060.
A claim generally must be brought within 3 years after the misappropriation is discovered or reasonably should have been discovered. NRS 600A.080.
When a Competitive Advantage Walks Out the Door
Consider a familiar fact pattern. A sales manager resigns on a Friday. Within a month, the company’s largest customers are fielding calls from a competitor that is quoting prices just below the company’s own. The customer list, the pricing, and the timing are not a coincidence, and by the time the owner connects the dots, the damage is already underway.
The outcome of that dispute is usually decided long before anyone files a complaint. It turns on what the business did to protect its information while the employee was still on the payroll: what the employee signed, what the employee could access, and whether the business ever treated the information as secret. That is why the work of an experienced contract lawyer on the front end so often determines whether a business has a claim on the back end.
What Qualifies as a Trade Secret Under Nevada Law?
Nevada defines a trade secret broadly. The statute reaches “information, including, without limitation, a formula, pattern, compilation, program, device, method, technique, product, system, process, design, prototype, procedure, computer programming instruction or code” that meets two requirements. NRS 600A.030(5). First, the information must derive “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 persons who can obtain commercial or economic value from its disclosure or use.” Id. Second, the information must be “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Id.
In practical terms, customer lists, pricing and margin data, vendor terms, software and source code, marketing strategies, and internal operating procedures can all qualify. Whether a particular item qualifies is a question of fact, and “not every customer and pricing list will be protected as a trade secret.” Frantz v. Johnson, 116 Nev. 455 P.2d 351 (2000). The Nevada Supreme Court weighs four factors: (1) the extent to which the information is known outside of the business and the ease or difficulty with which it could be properly acquired by others; (2) whether the information was confidential or secret; (3) the extent and manner in which the employer guarded its secrecy; and (4) the former employee’s knowledge of customers’ buying habits and other customer data, and whether that information is known by the employer’s competitors. Id. at 466–67, 999 P.2d at 358–59.
The second requirement is where many businesses fall short. Information that is freely shared, posted on an unsecured drive, or emailed to anyone who asks will have a difficult time qualifying, regardless of its value. Likewise, information that is readily ascertainable by proper means is not a trade secret at all, and that inquiry looks at what the public or any other person could have done, not merely at how the defendant obtained the information. MEI-GSR Holdings, LLC v. Peppermill Casinos, Inc., 134 Nev. 235, 416 P.3d 249 (2018). A court will look at what the business actually did, not what it says it intended.
Nevada gives businesses a valuable head start on that second requirement. NRS 600A.032 provides:
The owner of a trade secret is presumed to make a reasonable effort to maintain its secrecy if the word “Confidential” or “Private” or another indication of secrecy is placed in a reasonably noticeable manner on any medium or container that describes or includes any portion of the trade secret. This presumption may be rebutted only by clear and convincing evidence that the owner did not take reasonable efforts to maintain the secrecy of the trade secret.
NRS 600A.032. Simply put, marking matters. The presumption is strong, but it is limited. It addresses only the reasonable-efforts element. It does not convert publicly available information into a trade secret, and a confidentiality legend stamped on every document in the building, including documents that are plainly public, invites an argument that the label meant nothing.
Non-Disclosure Agreements: The First Line of Defense
A properly drafted non-disclosure agreement (NDA) does three things. It defines, with specificity, what information is confidential. It limits how that information may be used and by whom. And it imposes obligations that survive the end of the relationship, including the return or destruction of confidential materials. A generic template downloaded from the internet rarely does all three, and the gaps tend to surface at the worst possible time.
An NDA also gives a business a contract claim that stands alongside a statutory trade secret claim. NRS Chapter 600A displaces certain conflicting tort and restitutionary remedies, but it expressly does not affect “[c]ontractual remedies, whether or not based upon misappropriation of a trade secret.” NRS 600A.090(2)(a). The Nevada Supreme Court has confirmed that contract claims survive even when tort theories arising from the same facts are displaced. Frantz, 116 Nev. at 464–65 & n.4, 999 P.2d at 357–58 & n.4. That matters for two reasons. A well-drafted NDA can reach confidential information that ultimately fails to qualify as a statutory trade secret, and it can supply remedies, such as fee-shifting and agreed venue, that the statute alone does not guarantee.
One federal detail is frequently overlooked. Any agreement with an employee, contractor, or consultant that governs the use of a trade secret or other confidential information, and that is entered into or updated after May 11, 2016, should include the whistleblower immunity notice required by the federal Defend Trade Secrets Act. 18 U.S.C. § 1833(b)(3)(A), (D), (b)(4). Omitting the notice does not bar a federal claim, but the employer “may not be awarded exemplary damages or attorney fees” under the federal Act against an employee who did not receive it. 18 U.S.C. § 1833(b)(3)(C).
Employment Agreements and Nevada’s Non-Compete Statute
Employment agreements are where confidentiality, non-solicitation, and non-competition obligations are most often found, and they are not interchangeable. A confidentiality covenant protects information. A non-solicitation covenant protects relationships. A non-competition covenant restricts where the former employee may work. Each must be drafted to fit what it is actually meant to protect.
Non-competition covenants are the most heavily regulated of the three. Under NRS 613.195(1), a non-competition covenant is void and unenforceable unless it:
is supported by valuable consideration;
does not impose any restraint that is greater than is required for the protection of the employer for whose benefit the restraint is imposed;
does not impose any undue hardship on the employee; and
imposes restrictions that are appropriate in relation to the valuable consideration supporting it.
The statute imposes additional limits. A non-competition covenant may not apply to an employee who is paid solely on an hourly wage basis, exclusive of tips or gratuities. NRS 613.195(3). A covenant may not restrict a former employee from serving a former customer if the employee did not solicit that customer, the customer voluntarily chose to leave, and the employee otherwise complies with the covenant. NRS 613.195(2). If an employee is terminated as the result of a reduction in force, reorganization, or similar restructuring, the covenant is enforceable only while the employer continues paying the employee’s salary, benefits, or equivalent compensation, including severance. NRS 613.195(5). And if a court finds that an employer applied a covenant to an hourly employee or restricted service to an unsolicited former customer, the court “shall award the employee reasonable attorney’s fees and costs.” NRS 613.195(7).
There is one point in the employer’s favor. In 2016, the Nevada Supreme Court refused to rewrite an overbroad non-compete, holding the entire covenant unenforceable. Golden Rd. Motor Inn, Inc. v. Islam, 132 Nev. 476, 479, 376 P.3d 151 (2016). The Legislature responded in 2017. Under the current statute, if a covenant is supported by valuable consideration but contains unreasonable limitations, “the court shall revise the covenant to the extent necessary and enforce the covenant as revised.” NRS 613.195(6). That safety net has limits. The Nevada Supreme Court has since held that revision is not always available; a covenant that lacks valuable consideration, or that could be saved only by rewriting it, remains void. Tough Turtle Turf, LLC v. Scott, 139 Nev. 459, 537 P.3d 883 (2023). In other words, the statute is not a license to overreach. An agreement drafted to be reasonable from the outset is far easier to enforce, and far less likely to expose the employer to a fee award, than one that depends on the court to fix it.
Internal Safeguards That Prove Reasonable Efforts
Agreements are only half of the equation. A court evaluating reasonable efforts will look at how the business actually operated. The following practices create the record that wins these cases:
Mark confidential documents and files “Confidential” in a reasonably noticeable manner, and mark them consistently.
Restrict access to sensitive information on a need-to-know basis, with passwords, permissions, and access logs.
Adopt a written confidentiality policy and obtain a signed acknowledgment from every employee who receives it.
Require NDAs from vendors, contractors, and prospective business partners before sharing sensitive information.
At every departure, recover company devices, disable system access promptly, remind the employee in writing of continuing obligations, and obtain a signed certification that all company information has been returned.
None of these steps is expensive. Each of them is evidence.
What Happens When Confidential Information Is Misused in Nevada
Even with strong preventative measures, misappropriation happens. When it does, speed matters. Evidence on phones, laptops, and personal email accounts can disappear quickly, and every week of continued use compounds the harm. The first steps are typically to preserve the evidence, including forensic copies of devices and account records, and to evaluate whether a written demand or immediate court action is the better course.
Nevada law provides a range of remedies. A court may enjoin “[a]ctual or threatened misappropriation,” and that relief may include a temporary restraining order and a preliminary injunction while the case is pending. NRS 600A.040(1); NRCP 65. A business may recover damages for its actual loss and for unjust enrichment not taken into account in computing that loss, or, alternatively, a reasonable royalty. NRS 600A.050(1). If the misappropriation is “willful, wanton or reckless,” the court may award exemplary damages “not exceeding twice the award” of compensatory damages. NRS 600A.050(2). Reasonable attorney’s fees may also be awarded to the prevailing party where willful and malicious misappropriation exists. NRS 600A.060(3). During the litigation, the court “shall preserve the secrecy of an alleged trade secret by reasonable means,” including protective orders and sealed records. NRS 600A.070. Where the trade secret relates to a product or service used in interstate commerce, a parallel federal claim under the Defend Trade Secrets Act may also be available. 18 U.S.C. § 1836(b)(1).
Two cautions apply. First, the fee exposure cuts both ways. A court may award fees against a party whose claim of misappropriation is made in bad faith. NRS 600A.060(1). Fees may also follow an unaccepted offer of judgment under NRCP 68, and the Nevada Supreme Court has affirmed a substantial fee award against a losing trade secret plaintiff. MEI-GSR Holdings, 134 Nev. 235, 416 P.3d 249. A trade secret claim should be built on evidence, not suspicion. Second, the clock is running. NRS 600A.080 provides that “[a]n action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered,” and that “a continuing misappropriation constitutes a single claim.” A business that sits on known misuse risks losing its remedies entirely.
ABW Firm represents Nevada businesses in trade secret and restrictive covenant litigation in the Eighth Judicial District Court and other Nevada courts, including emergency injunction practice.
Legal Strategies That Help Protect Your Business
Protecting confidential business information begins long before a dispute. At Andersen Beede Weisenmiller, our attorneys review and draft NDAs, employment agreements, and confidentiality policies, and we respond quickly when a business learns that its information has been taken. Whether the need is a review of existing agreements, updates to employment contracts, or immediate action against a former employee or competitor, the objective is the same: a record that a Nevada court will enforce.
The following questions are among the most common we hear from business owners about protecting trade secrets under Nevada law.
Frequently Asked Questions About Nevada Trade Secret Law
Q: Does a trade secret need to be registered anywhere in Nevada?
A: No. Unlike patents and trademarks, trade secrets are not registered. Protection arises from the information’s economic value and from the reasonable steps the business takes to keep it confidential. NRS 600A.030(5).
Q: Can a non-compete alone protect my trade secrets?
A: No. A non-compete restricts where a former employee may work, but it does not by itself define or protect confidential information, and it may not be used at all for employees paid solely on an hourly wage basis. NRS 613.195(3). The stronger approach pairs a well-drafted NDA and confidentiality covenant with internal safeguards and, where appropriate and lawful, a reasonable non-compete or non-solicitation covenant.
Q: What if I do not discover the theft right away?
A: You may still have a claim. The 3-year limitations period runs from the date the misappropriation was discovered or reasonably should have been discovered. NRS 600A.080. However, a court will ask whether you exercised reasonable diligence, so delay after warning signs appear can be costly.
Q: Is a verbal agreement enough to protect proprietary information?
A: A verbal confidentiality agreement may be enforceable, but it is difficult to prove and easy to dispute. A signed written agreement that identifies the confidential information and the obligations of each party is far stronger evidence, both of the agreement and of the reasonable efforts NRS 600A.030(5) requires.
Q: Can I stop a former employee from using my information while the lawsuit is pending?
A: Often, yes. Nevada courts may enjoin actual or threatened misappropriation, including through a temporary restraining order or preliminary injunction. NRS 600A.040; NRCP 65. The business must show, among other things, a reasonable likelihood of success and irreparable harm, so prompt action and good evidence are essential.
Protecting Nevada Businesses Through Strategic Legal Counsel
Trade secrets are only as secure as the steps a business takes to protect them. Reviewing confidentiality agreements, tightening internal policies, and addressing warning signs early will reduce risk and put the business in a far stronger position if a dispute arises.
If you have questions about protecting your business or its proprietary information, contact ABW Firm today to discuss your legal options or call (702) 522-1992.
This article provides general information about Nevada law as of October 2026 and is not legal advice. Reading it does not create an attorney-client relationship. Statutes and case law change, and the application of the law depends on the specific facts of each matter. This information should not be relied upon for any purpose.
