Employment Law Alert: Defend Trade Secrets Act—Notice Anything New?

Last month, a new federal law called the Defend Trade Secrets Act (DTSA) went into effect. Among other changes, this new statute allows companies and individuals to file a civil lawsuit in federal court for theft of a trade secret. Prior to enactment of the DTSA, companies and individuals could only bring civil lawsuits under various state laws protecting trade secrets.

Employers need to understand that these added protections come with certain notice obligations. Effective immediately, the DTSA requires employers to include a notice of whistleblower immunity in any new contract with employees, contractors, or consultants if those contracts include provisions restricting the use or disclosures of trade secrets or other confidential information. Employers that fail to include the required notice provision will not be allowed to collect exemplary damages or attorneys’ fees in an action against the individual to whom such notice was not provided.

Takeaway

Going forward, employers need to include a notice of whistleblowing immunity under the DTSA in new agreements with employees, contractors, or consultants that govern the use of a trade secret or confidential information. If you have questions or would like to discuss your company’s notice provisions, please contact the Fox Swibel attorney with whom you usually work.

Kelly Smith Haley HeadshotThis article was written by Kelly Smith Haley who is a partner at Fox Swibel Levin & Carroll LLP, and an editor of the Illinois Employment Law Letter. She can be reached at ksmithhaley@foxswibel.com.

Kelly Smith Haley HeadshotThis article was written by Kelly Smith Haley who is a partner at Fox Swibel Levin & Carroll LLP, and an editor of the Illinois Employment Law Letter. She can be reached at ksmithhaley@foxswibel.com.