When I joined MegaCorp, I was “asked” (well, told, actually) to sign a nondisclosure agreement that limits what I can do with any trade secrets I may learn while doing my job. That agreement says that I can’t tell a single, solitary soul, and that if I do, MegaCorp will, I guess, come and take my first-born child. I guess that would be OK because (a) he’s a teenager, and you know how they are; and (b) MegaCorp would then have to put him through college, and that’s a lot of money. Here’s the thing, though…If I thought that MegaCorp was doing something illegal, and I had to tell the cops, or a lawyer about it, I would hate to lose Junior. Can you help?
A Fellow Currently Residing in Moscow
You’re in luck…sort of. You see, as part of the new Defend Trade Secrets Act of 2016 (“DTSA”), there are protections for “whistle-blowers” who disclose trade secrets under certain circumstances (18 U.S.C. §1833). The DTSA immunizes you from liability under federal and state trade secret laws if you disclose trade secrets in confidence to government officials and attorneys, “solely for the purpose of reporting or investigating a suspected violation of law.” In addition, employers and contracting parties must provide actual notice of these provisions in any contract governing, “the use of a trade secret or other confidential information.” If they fail to give this notice, then they cannot seek exemplary damages or attorney’s fees in litigation against former employees and contractors (but they can still bring a law suit.) If MegaCorp were to sue you in retaliation for reporting that they violated the law, you would also be entitled to use their trade secrets in your court filings, if you filed them “under seal” (meaning that the judge and lawyers can read them, but not anyone else unless the judge so-orders.)
So you see, Ed, you’ve got some protection under the new law, but like anything in the legal field, it has some gray areas (though maybe not 50 shades of them.) Now…about those massive databases…
If you’re an employer and your employment agreements and contacts don’t contain the required notice under the DTSA, give the attorneys at LW&H a call. They can fix ’em right up.
— Lawrence A. Husick, Esq.
June 8, 2016