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DTSA extends the protection of trade secrets

Human resources professionals and employment law attorneys in New Jersey and around the country were likely aware that the federal Defend Trade Secrets Act went into effect on May 11. The law extends the statutory protection of proprietary business information and trade secrets, and both businesses and individuals who own confidential information covered by the act may file private lawsuits when this information is taken without their consent.

One of the provisions of the DTSA requires employers to include a notice in contracts with workers, consultants and contractors that details the restrictions placed on confidential information. This notice must also disclose the legal immunity provided to whistleblowers who disclose trade secrets or other confidential business information to government officials when they suspect that criminal acts are being committed or to attorneys when complaints or lawsuits are being filed under seal. This protection applies to lawsuits filed against employers that are being sued for taking retaliatory action against workers for disclosing trade secrets.

Employers with a written policy in place that clearly defines these protections and details the policy for reporting suspected violations of federal law may instead include a reference to this written policy in contracts with employees, contractors or consultants. Employers pursuing trade secret litigation against individuals who have not been provided with this notice may be unable to collect punitive damages or attorney fees.

The provisions of the DTSA reveal how closely employment contracts may be reviewed during litigation filed by employees. Attorneys with experience in this area may assist workers who wish to pursue wrongful termination claims or other legal actions related to their employment contracts by reviewing these documents to identify possible compliance issues.

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