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May 25th, 2016
New Trade Secrets Law Calls for Changes to Handbooks and Certain Employment Agreements
As we noted in an alert last week, the Defend Trade Secrets Act of 2016 ("DTSA") creates a private right of action to sue in federal court for trade secret misappropriation, and provides for remedies including actual damages and attorneys' fees. The DTSA also allows courts to order seizure of allegedly purloined business records without notice to the party possessing the records.
But to take full advantage of these new remedies, the DTSA requires that employers provide notice of certain whistleblowing and confidentiality protections. To this end, the new law requires employers to add language to their personnel manuals and handbooks, and to revise contracts with employees, consultants, and contractors that contain confidentiality provisions. Here's a quick summary of what you need to do.
The DTSA protects individuals - such as employees, contractors, or consultants - from criminal or civil liability for disclosing a trade secret if the disclosure is made in confidence to a government official, directly or indirectly, or to an attorney, and it is made for the purpose of reporting a "violation of law."
The DTSA requires employers to provide employees, contractors and consultants with notice of the new immunity provision in "any contract or agreement with employee[s] that govern the use of a trade secret or other confidential information." Employers who fail to provide the required notice to employees may not recover double damages or attorney fees in a DTSA action for theft of trade secrets. To be in compliance, the law states that an employer can provide a "cross-reference" to a "policy document" given to the relevant employees that describes the reporting policy for suspected violations of law.
If you have questions about how to amend your employment-related agreements in light of the Defend Trade Secrets Act of 2016, or about other intellectual property or employment matters, please contact Wendy Stryker at (212) 705 4838 or firstname.lastname@example.org, Craig Whitney at (212) 826 5583 or email@example.com or any other member of the Frankfurt Kurnit Employment or Litigation groups.
Other Commercial Litigation Alerts
NY Court Expands Protections for Employers to Safeguard Proprietary Information
Yesterday a New York State appeals court reinstated the conviction of a former Goldman Sachs computer programmer under New York's unlawful use of secret scientific material statute. In doing so, the court gave a twenty-first century voice to a statute that was written in the age of blueprints and photocopiers.
January 27 2017
Was Anyone Hurt? - New Supreme Court Test Raises the Bar for Class Action Plaintiffs
There's good news for companies defending or girding for consumer class actions.
May 24 2016
New Federal Law Expands Trade Secrets Protections
There's good news for companies that rely on trade secrets.
May 12 2016