Does our NDA protect this information in North Carolina, and what does the Trade Secrets Protection Act add?
The Act protects only what meets its definition, gives its own remedies, and runs for three years from discoverability. Under N.C.G.S. § 66-152(3) a 'trade secret' is business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique or process, that (a) derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use, and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, and the section adds that the existence of a trade secret 'shall not be negated merely because the information comprising the trade secret has also been developed, used, or owned independently by more than one person, or licensed to other persons', so sharing information under licence does not by itself destroy the status. In Rel. Ins. the Supreme Court of North Carolina recorded the six factors North Carolina and federal courts weigh in deciding whether information qualifies: how far it is known outside the business, how far it is known within it, the measures taken to guard secrecy, its value to the business and its competitors, the effort or money spent developing it, and the ease or difficulty with which others could properly acquire or duplicate it. Section 66-153 gives the owner of a trade secret a remedy by civil action for misappropriation, which § 66-152(1) defines as acquisition, disclosure or use of another's trade secret without express or implied authority or consent, unless the trade secret was arrived at by independent development or reverse engineering or was obtained from a person with a right to disclose it. The remedies are statutory: § 66-154(a) allows a preliminary injunction during the action and requires a permanent injunction on a judgment finding misappropriation for the period the trade secret exists plus any further period needed to eliminate the unjust advantage; § 66-154(b) allows actual damages measured by the economic loss or the unjust enrichment, whichever is greater; and § 66-154(c) allows punitive damages where wilful and malicious misappropriation exists. Section 66-157 requires an action for misappropriation to be commenced within three years after the misappropriation complained of is or reasonably should have been discovered.
The trap
The statutory definition does the work the NDA cannot. Information the contract labels 'Confidential Information' but which is readily ascertainable by independent development or reverse engineering is not a trade secret under § 66-152(3)a, and information the owner has not protected by efforts reasonable in the circumstances is not a trade secret under § 66-152(3)b, so the confidentiality programme, not the clause, decides the statutory claim. Section 66-155 then sets the burden, and in 2026 the Supreme Court of North Carolina read it more narrowly than its words first suggest. The section says misappropriation is prima facie established by substantial evidence that the person both (1) knows or should have known of the trade secret and (2) 'has had a specific opportunity to acquire it for disclosure or use or has acquired, disclosed, or used it without the express or implied consent or authority of the owner'. Read alone, limb (2) looks as though the want of consent attaches only to actual acquisition. In Rel. Ins. the Court held otherwise: harmonising limb (2) with the § 66-152(1) definition, it must be read as requiring BOTH a specific opportunity to acquire AND an absence of express or implied consent or authority, so 'an employer cannot state a prima facie case against its employee merely by showing that it gave the employee access to its trade secrets at some point'. The employer must show the opportunity arose after its consent or authority had ceased, and a specific opportunity must be 'a discrete, identifiable instance of means to access the trade secret'. So an NDA that grants broad access during employment makes the employer's prima facie case harder, not easier. Two further limits. The statutory rebuttal (substantial evidence of independent development, reverse engineering, or receipt from a person with a right to disclose) is not the defendant's only route: § 66-155 closes by providing that the section 'shall not be construed to deprive the person against whom relief is sought of any other defenses provided under the law'. And fees run both ways under § 66-154(d): the court may award reasonable attorneys' fees to the prevailing party if a claim of misappropriation is made in bad faith OR if wilful and malicious misappropriation exists. NOT ESTABLISHED HERE: whether the Act displaces a parallel contract or common-law claim. Article 24 of Chapter 66 was read section by section and it runs §§ 66-152 to 66-157 with no displacement or preemption provision in any of them; but 43 published North Carolina opinions mention § 66-152 and only the one relied on here was read, so no view is offered on what those decisions say about displacement. Also not established: whether a confidentiality covenant with no time limit is enforceable as to information that is not a trade secret, on which nothing was read.
16 authorities
- statuteN.C.G.S. § 66-152enactment date not established
The words that state the rule
"Trade secret" means business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that: a. Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- statuteN.C.G.S. § 66-152enactment date not established
The words that state the rule
(1) "Misappropriation" means acquisition, disclosure, or use of a trade secret of another without express or implied authority or consent, unless such trade secret was arrived at by independent development, reverse engineering, or was obtained from another person with a right to disclose the trade secret.
- statuteN.C.G.S. § 66-152enactment date not established
The words that state the rule
The existence of a trade secret shall not be negated merely because the information comprising the trade secret has also been developed, used, or owned independently by more than one person, or licensed to other persons.
- caseNo. 68A25 (N.C., filed 22 May 2026)Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLCN.C.decided 2026
The words that state the rule
In determining whether information constitutes a trade secret, North Carolina and federal courts consider six factors: (1) The extent to which the information is known outside the business; (2) the extent to which it is known to employees and others involved in the business; (3) the extent of measures taken to guard secrecy of the information; (4) the value of information to the business and its competitors; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could properly be acquired or duplicated by others.
- statuteN.C.G.S. § 66-157enactment date not established
The words that state the rule
An action for misappropriation of a trade secret must be commenced within three years after the misappropriation complained of is or reasonably should have been discovered.
- statuteN.C.G.S. § 66-154enactment date not established
The words that state the rule
If a claim of misappropriation is made in bad faith or if willful and malicious misappropriation exists, the court may award reasonable attorneys' fees to the prevailing party.
- statuteN.C.G.S. § 66-153enactment date not established
The words that state the rule
The owner of a trade secret shall have remedy by civil action for misappropriation of his trade secret.
- statuteN.C.G.S. § 66-154enactment date not established
The words that state the rule
(a) Except as provided herein, actual or threatened misappropriation of a trade secret may be preliminarily enjoined during the pendency of the action and shall be permanently enjoined upon judgment finding misappropriation for the period that the trade secret exists plus an additional period as the court may deem necessary under the circumstances to eliminate any inequitable or unjust advantage arising from the misappropriation.
- statuteN.C.G.S. § 66-154enactment date not established
The words that state the rule
(b) In addition to the relief authorized by subsection (a), actual damages may be recovered, measured by the economic loss or the unjust enrichment caused by misappropriation of a trade secret, whichever is greater. (c) If willful and malicious misappropriation exists, the trier of fact also may award punitive damages in its discretion.
- statuteN.C.G.S. § 66-156enactment date not established
The words that state the rule
In an action under this Article, a court shall protect an alleged trade secret by reasonable steps which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action subject to further court order, and ordering any person who gains access to an alleged trade secret during the litigation not to disclose such alleged trade secret without prior court approval.
- statuteN.C.G.S. § 66-155enactment date not established
The words that state the rule
This prima facie evidence is rebutted by the introduction of substantial evidence that the person against whom relief is sought acquired the information comprising the trade secret by independent development, reverse engineering, or it was obtained from another person with a right to disclose the trade secret. This section shall not be construed to deprive the person against whom relief is sought of any other defenses provided under the law.
- statuteN.C.G.S. § 66-155enactment date not established
The words that state the rule
Misappropriation of a trade secret is prima facie established by the introduction of substantial evidence that the person against whom relief is sought both: (1) Knows or should have known of the trade secret; and (2) Has had a specific opportunity to acquire it for disclosure or use or has acquired, disclosed, or used it without the express or implied consent or authority of the owner.
- caseNo. 68A25 (N.C., filed 22 May 2026)Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLCN.C.decided 2026
The words that state the rule
Accordingly, to harmonize the two provisions and give effect to the definition set forth in § 66-152(1), we must read § 66-155(2) as requiring both (i) a specific opportunity to acquire and (ii) an absence of express or implied consent or -25- REL. INS., INC. V. PILOT RISK MGMT. CONSULTING, LLC Opinion of the Court authority to disclose or use the trade secret.
- caseNo. 68A25 (N.C., filed 22 May 2026)Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLCN.C.decided 2026
The words that state the rule
This, in turn, means that an employer cannot state a prima facie case against its employee merely by showing that it gave the employee access to its trade secrets at some point. Rather, an employer must show that the employee had the specific opportunity to acquire the trade secret after the employer’s express or implied consent or authority ceased to exist.
- caseNo. 68A25 (N.C., filed 22 May 2026)Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLCN.C.decided 2026
The words that state the rule
In short, the plain language of § 66-155(2) permits a claimant to establish a prima facie case of misappropriation with substantial evidence of a specific opportunity to acquire the trade secret—so long as that specific opportunity occurred absent consent or authority of the owner. A specific opportunity must be a discrete, identifiable instance of means to access the trade secret.
- caseNo. 68A25 (N.C., filed 22 May 2026)Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLCN.C.decided 2026
The words that state the rule
Based on the foregoing, we affirm the Business Court’s grant of summary judgment as to plaintiffs’ unjust enrichment claim but reverse the Business Court’s grant of summary judgment as to all other claims plaintiffs raised on appeal and remand for further proceedings not inconsistent with this opinion. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.