HomePublicationsNewsletter ArchiveNewslettersVolume 22Issue 22NEW FEDERAL “DEFEND TRADE SECRETS ACT OF 2016” SIGNED INTO LAW; REQUIRES COMPANY ACTION

On May 11, 2016, President Obama signed the Defend Trade Secrets Act of 2016 (“DTSA” or “Act”) into law. The Act requires companies to give contractual notice regarding certain whistleblower protections for its contractual workers and subcontractors or risk being barred from recovering attorneys’ fees or exemplary damages in any subsequent lawsuit with the employee. This requirement also applies to amendments to any employee or subcontractor agreement that has been amended since the effective date of the Act (May 12, 2016).

Other highlights of the Act include:

· Choice of Federal or State Remedies

· New Federal Remedies

· New Recovery Tool

· Litigation Safeguards for Trade Secrets

· Specific Discussion about Digital Issues/Remedies

· Whistleblower Protections

· Employer Notification Requirement

The whistleblower provision provides immunity to a person revealing a trade secret “in confidence” to local, state, or federal governments, or an attorney, solely for the purpose of reporting or investigating a suspected violation of law.  As stated previously, employers have an affirmative duty to inform their employees and independent contractors about the immunity. 

The passage of the DTSA warrants many suggestions for best practices including modifications of employment and contractor agreements as well as verifying current and continuing reasonable measures designed to protect trade secrets.  RMC has a detailed whitepaper that we can share upon request entitled Congress Strengthens Trade Secret Protections; Employers Required to Notify Employees and Independent Contractors.

Additionally, contact Attorney J.J. Burchman at Burchman@RMCLegal.com  or 517.999.5414 if you have any questionsregarding changes to employment and contractor agreements.


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