Its been a busy week in H.R. land. We feel you. It’s been a busy week for us too. Well, let’s end things on a high note, and no we’re not talking about weed at work.
Last week the President signed the Defend Trade Secrets Act. I know what you’re thinking: “I just get the payroll people out of my office and now I will have to deal with IP lawyers on Monday?” Well, study up on science fiction references over the weekend, maybe get ready to crack a Jar Jar joke, because the IP folks will be knocking on your door to amend confidentiality agreements and here’s why:
Along with providing a federal forum for claims of trade secret misappropriation, the Defend of Trade Secrets Act allows your company to sue employees for breaching their employment contract’s trade secrets provisions. You can collect exemplary damages AND attorneys fees. The fee-shifting provisions give employers muy muy leverage in threatening lawsuits against former employees who may be tempted to spill the beans over at Brand X.
But there is a catch. In order to protect workers from employers who may threaten ligation against employees tempted to blow the whistle, the new law carves out whistleblower protections to employees who disclose trade secrets to their own lawyers or to government officials for the purpose of blowing the whistle. In order to claim the whistleblower protections, the employee must take certain measures, like disclosing the secrets to the government in confidence or filing legal complaints under seal. So if you want to be able to claim punitive damages and attorneys fees YOU will need to inform employees of their whistleblower rights in advance. Umm, you know all those employment agreements that we (or your attorney) so carefully crafted? Well, we need to change them. Now they need to tell the employee that all the bad stuff that will happen to them, won’t actually happen to them if they are disclosing the secret in a certain way, and for the purposes of blowing the whistle.
Does this mean you need to go back and redo every confidentiality agreement in the company? No (I told you we would end this on a high note). The notice provisions only apply to confidentiality agreements entered into after the statue was passed on May 11, 2016. So take a breath, enjoy the weekend, and bone up on those Star Wars references. Here’s one: When did Luke know that Kylo was turning to the dark side? In the Sith grade. That will kill them, trust me.