President Obama recently signed into law the Defend Trade Secrets Act (DTSA), which allows companies to sue in Federal court for alleged trade-secret theft.
For employees and independent contractors, DTSA has two important consequences.
First, DTSA goes beyond just protecting companies form secret theft; it provides immunity from misappropriation claims against individuals assisting government officials investigating suspected violations of the law. The immunity provision places the duty on employers to provide employees and independent contractors written notice of the new immunity provision in “any contract or agreement with an employee that governs the use of a trade secret or other confidential information.”
An employer can comply with the notice requirement by providing to the relevant workers a “cross-reference” to a policy that states the reporting policy for suspected violations of law. If an employer does not provide proper notice, an employer may not recover exemplary damages or attorney fees in an action brought under the DTSA against an employee to whom no notice was ever provided.
Second, individuals claiming that they were terminated for reporting suspected law violations may similarly disclose trade secrets to their attorneys and in court filings under seal during anti-retaliation lawsuits.
DTSA does not preempt or supersede state law. For example, Maryland’s Trade Secret Act remains in full force and effect.
Employees and independent contractors are often threatened by ex-employers about trade secrets and misappropriation. Such threats should be taken very seriously and consultation with counsel is strongly recommended; contact the attorneys at Lebau & Neuworth at (410) 296-3030 or lebauneuworth.com/contact-us.
