The Defend Trade Secrets Act: Do Your Employment Documents And Policies Comply?


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The Federal Defend Trade Secrets Act (DTSA) was amended on May 11, 2016, effective immediately. The newly amended law contains a whistleblower clause that provides immunity for the disclosure of trade secrets to government officials for the sole purpose of reporting violations of the law.

Why is that important to you? The new law requires employers to give notice of that immunity "in any contract or agreement with an employee that governs the use of a trade secret or other confidential information."

If you have an employment agreement that contains a section addressing trade secrets that does not include the notice of immunity, should you sue the employee for unauthorized disclosure, you will not be able to recover punitive damages or attorneys' fees that may otherwise be available under the DTSA or under state trade law. The DTSA applies to all such contracts entered into after May 11, 2016.

In addition to making sure that your employment agreements comply, you should also should consider looking at your employee handbook or manual and see what trade secret policies you have in place and amending them to bring them into compliance. Other agreements that need to be examined include non-disclosures, proprietary information, and invention assignments.


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