Take Notice (And Give Notice!): The “Defend Trade Secrets Act of 2016” (DTSA) Requires Immediate Employer Action

May 19, 2016

On May 11, 2016, President Obama signed the Defend Trade Secrets Act of 2016, creating the first federal civil cause of action for misappropriation of trade secrets.

One provision of the DTSA requires immediate action by employers. The DTSA includes a whistleblower provision that provides immunity for disclosure of trade secrets to government officials. Beginning May 12, 2016, employers must give notice of this immunity to employees, consultants and contractors in any future agreement that “governs the use of trade secret or other confidential information.” Employers should also consider revising employee handbooks or any policy that governs the use of a trade secret or confidential information to include a notice of this whistleblower immunity. As a penalty for failing to comply with the notice provisions, employers cannot recover exemplary damages or attorneys’ fees that may otherwise be available under the DTSA.

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