Confidentiality agreement wise under new trade secrets act

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act, which expands the Economic Espionage Act of 1996 by giving private employers the right to file lawsuits for trade secrets theft or misappropriation under federal law. Previously, companies could only bring civil cases under state law.

Labor and employment attorney Phil Bruce was interviewed by The Oklahoman about the new law and what it means for employers who are concerned about protecting their trade secrets.

The most significant and controversial portion the law, he explained, is an ex parte civil seizure provision that allows the court, in exceptional circumstances, to order law enforcement to seize the property of an employee without first giving him a hearing if it is likely that the employee will disseminate or destroy the property, and if the employer can prove they are likely to succeed in a lawsuit. Another significant provision “provides whistleblower employees with immunity from DTSA lawsuits when they turn over trade secrets to federal, state or local government officials to expose alleged illegal actions by the employer.”

Because the law goes into effect immediately, Bruce says now is a great time for employers to review whether they have adequate protections in place to protect their trade secrets and confidential information, and also to update or implement confidentiality agreements.

“This is particularly true as more employees now work with more electronic information and can access – and, therefore, take – information through cloud-based programs such as iCloud and Dropbox,” he said.