As our sister blog, Technology Law Source has reported, on May 11, 2016, President Obama signed into law the Defending Trade Secrets Act (DTSA), which creates a federal trade secret misappropriation cause of action. As noted, businesses have a lot to consider in deciding whether to pursue this new cause of action in federal court when the security of their trade secrets are threatened. Because the DTSA does not pre-empt state laws protecting trade secrets, however, if a federal forum is otherwise appealing, there really is no reason not to pursue a DTSA cause of action.

Employers will be particularly interested in knowing that the DTSA includes an immunity from criminal and civil liability for employees who disclose their employers’ trade secrets if:

• the disclosure is made in confidence to a federal, state, or local government official, directly or indirectly, or to an attorney solely for the purpose of reporting a violation of law;
• it is made in a complaint or other document filed under seal in a lawsuit or other proceeding.

The DTSA also permits an individual who files a lawsuit against his or her employer alleging retaliation for reporting a suspected violation of law to disclose the employer’s trade secret to an attorney and use it in a court proceeding if the document containing the trade secret is filed under seal and in response to a court order.
Continue Reading Employers wanting to take full advantage of the Defending Trade Secrets Act should consider including immunity notice in all new and updated confidentiality agreements