The Defend Trade Secrets Act (DTSA) signed by President Obama today creates a new federal cause of action for trade secret misappropriation and enables employers to obtain injunctive relief and monetary damages in federal court to prevent the misappropriation of their trade secrets and obtain compensation for financial harms stemming from trade secret misappropriation. The law goes into effect immediately and imposes important obligations on employers seeking to protect their trade secrets by entering into NDAs and confidentiality agreements.
Specifically, the law contains an immunity provision that protects individuals against civil and criminal liability under any federal or state trade secret law with respect to the disclosure of trade secret information made (1) in confidence by the individual to a government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (2) in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal. Employers must provide notice of this immunity in any contract or agreement that governs the use of trade secret or other confidential information entered into with an employee, contractor, or consultant. If such notice is not provided, then the employer may not be awarded exemplary damages or attorneys fees in an action alleging trade secret misappropriation against an individual to whom notice was not provided. This obligation applies to contracts and agreements entered into or updated after May 11, 2016.
Employers who seek to protect their trade secret information are well advised to update their current policies and agreements to reflect this new law in order to preserve all potential remedies available to them for trade secret misappropriation. If you would like assistance with this, please feel free to contact our office.
The above summary has been prepared for general informational purposes only and is not intended as legal advice.
Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters. Please visit our website at www.laemploymentcounsel.com to learn more about us.