The Defend Trade Secrets Act of 2016 signed into law by President Obama on May 11, 2016, creates a private civil cause of action for trade secret misappropriation. This means that there will now be more cases filed in federal court with new provisions that include the right to seek ex parte seizure orders as well as other provisions that protect employees seeking new employment with a direct competitor. There will be a good deal of elaboration on these changes in coming weeks
The changes dictated by the statute in day to day advisory practice will be more modest, although well advised companies will bolster their trade secret management processes. One notable exception which MUST be immediately addressed by all clients is the requirement that an employer create a policy or cross-reference to a policy document that provides notice and procedures for reporting a suspected violation of law (“whistleblowers”). If the employer does not provide this notice and policy statement to employees, the employer cannot seek exemplary damages or attorney fees in a federal court civil action for trade secret misappropriation.
It is essential that the need for immediate change be promptly communicated to HR and other appropriate contacts.