What a non disclosure agreement is
A non disclosure agreement (اتفاقية عدم الإفصاح), abbreviated to NDA, is an agreement under which one party undertakes not to reveal specific information to which it has been given access, and not to use that information for anything other than the purpose for which it was made available.
The definition places two restrictions on the party bound by the agreement. One concerns disclosure: the information may not be revealed to others. The other concerns use: the information may serve only the purpose for which it was provided, and putting it to a different purpose falls outside what the agreement allows, even where nothing is revealed to anyone. Both restrictions attach to specific information, not to information in general.
What a non disclosure agreement covers and what it excludes
A non disclosure agreement protects information that is specifically described. That information may be client data, prices, plans, or anything classified as a trade secret.
The drafting of a non disclosure agreement can also exclude the following from the obligation:
- Information that has become public by lawful means. It means information that was once confidential and has since become available to the public through a legitimate route.
- Information the other party already held. It is what the receiving party had in its possession before it was given access under the agreement.
- General knowledge and skill. It refers to the general knowledge and the skill that an employee acquires through the work itself.
The last of these exclusions can give rise to disagreement when a non disclosure agreement is applied, because its boundary is not clear cut. The point at which general knowledge and acquired skill end, and the specific information that the agreement protects begins, is not fixed by the exclusion itself.
What the drafting of a non disclosure agreement takes into account
The drafting of a non disclosure agreement takes into account the following points:
- A precise description of the information. A wording such as “everything relating to the establishment” is so broad that proving a breach of it becomes difficult.
- A stated period for the obligation. It tells both parties how long the undertaking lasts. Where that period is long, the agreement also gives a reason for it.
- A declared purpose for the permitted use. It sets out the use of the information that the agreement allows, so that the second restriction in the definition has something to be measured against.
- Arrangements for return or destruction. They set out what is to happen to the information, whether it is returned or destroyed, when the relationship ends.
- An exception for compulsory disclosure. It covers disclosure that a competent authority requires, and it is stated in the agreement expressly.
How a non disclosure agreement differs from a non compete agreement
A non compete agreement restricts where an employee may work after leaving. A non disclosure agreement restricts what the employee may say about a particular piece of information, and it does not prevent the employee from working for a competitor.
Article 83 of the Saudi Labor Law (نظام العمل) governs both obligations as they apply after the employment contract ends, in two separate paragraphs. Under the confidentiality paragraph of Article 83 of the Labor Law, where the work gives the worker access to the secrets of the work, the employer may, to protect its legitimate interests, require the worker not to disclose those secrets after the contract ends. Under the non compete paragraph of Article 83 of the Labor Law, where the work lets the worker know the employer’s clients, the employer may, to protect the same legitimate interests, require the worker not to compete after the contract ends.
The two clauses share the two conditions of validity that Article 83 of the Labor Law sets: the obligation must be in writing, and it must be defined as to time, place and type of work. The non compete clause carries one further limit in Article 83 of the Labor Law that the confidentiality clause does not: it may not exceed two years from the end of the relationship. A confidentiality clause is bound by the two conditions of validity, but not by that two year ceiling.
The two agreements therefore differ in what they restrict and in the effect they have, while sharing the conditions of writing and of definition as to time, place and type of work. Confusing them can produce a clause that does not stand, because it asks one of the two agreements for something that agreement does not provide.
Royal Decree M/44 of 1446H, in force since 19 February 2025, amended provisions of the Labor Law. That decree did not amend Article 83 of the Labor Law, which was last amended by Royal Decree M/46 of 1436H. The provision relied on is Article 83 of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development, covering the confidentiality clause and the non compete clause after employment.
Where a non disclosure agreement sits in the employment contract
A non disclosure agreement can be included as a clause in the employment contract, or set out in a document attached to that contract. In either form, what the two parties agree in it is examined against the Labor Law and against the establishment’s work organisation regulation (لائحة تنظيم العمل).
Any obligation that is meant to extend beyond the end of the relationship is written out expressly, with its duration. It is not presumed.
What a non disclosure agreement does not replace
A non disclosure agreement is a legal instrument, not a security measure. It gives rise to consequences after information has been disclosed, but it does not prevent the disclosure from taking place.
Preventing disclosure rests on other means: controlling access permissions, and deciding who may see which information. Those means overlap with the rules on the protection of personal data, when the information concerned is data about individuals rather than trade secrets.
This is an explanation of the concept and of the statutory provisions cited, not legal advice.
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