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.
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