We in HR know that you need to have your radar on all the time watching for new laws you have to pay attention to in order to be compliant. This new law probably ducked under your radar, unless you are an attorney. Passed with little fanfare and effective immediately it is one of those stealth laws of which HR is most likely unaware.
“the most important intellectual property protection law passed in the last 70 years”
The Defend Trade Secrets Act of 2016 (“DTSA”) is not something that would get your immediate attention. Fortunately for me I have a friend who also happens to be an excellent attorney who pays attention to these things. In a post on Linked In, D. Brian Reider says this law is “…probably the most important intellectual property protection law passed in the last 70 years” on a Federal basis. It applies to all businesses big and small. Brian says “It is actually an extension of a criminal statute, the Economic Espionage Act of 1996, which now allows for civil lawsuits in claims for misappropriation of trade secrets.”
The good news
A good provision of this law is that it allows companies to protect themselves from theft of information that is, or should be, protected as a trade secret. My friend says this law:
“notably include[s] a provision for a party claiming a misappropriation to go to court without notice to the other side to ask for an order for the immediate seizure of property (for example, if you think an employee took a laptop with trade secret information on it, the Judge could order it seized without notice to be held pending a further hearing). It also provides for damages and attorney’s fees.”
That is good news for companies trying to prevent the loss of critical information as employees exit the company.
The bad news
Starting May 12, every such contract (and every employee handbook) must be revised to cover this point.”
As always there is a converse side. There is one important provision which applies to all employers and companies who hire independent contractors. According to Mr. Reider this law has a “provision in the DTSA which provides ‘whistleblower immunity’ to persons who report a business to the government for violations of the law, and in doing so, disclose confidential, trade secret information.”
Additionally if you have someone working in a capacity where they are exposed to such information you have to inform them of this immunity. Reider says “Starting May 12, every such contract (and every employee handbook) must be revised to cover this point.”
So get out those contracts, confidentiality statements and employee handbooks and make sure each of these documents is appropriately revised. You might want to reach out to your council or to D. Brian Reider at Best Best & Krieger LLP in Ontario, California. I can vouch for him I have known him since we were 16.