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Time to Update Your Employee Non-Disclosure Agreements

By Heath Coffman on January 29, 2017
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In May 2016, the federal government enacted the Defend Trade Secrets Act (DTSA), which provides federal civil cause of action for trade secrets misappropriation.  It is similar to the state-based Uniform Trade Secret Act.  One important difference, though, is the DTSA’s notice provision for non-disclosure agreements (NDAs).  With the enactment of DTSA, all NDAs entered into or amended after May 11, 2016 are expected to provide notice of certain trade secret disclosure immunities to employees, contractors, or consultants.  This immunity provision applies when an employee, contractor, or consultant: (1) discloses a trade secret in confidence to a federal, state, or local official for the purpose of reporting or investigating a suspected violation of law, or (2) discloses a trade secret in a complaint or other document filed in a lawsuit under seal.  If an employer fails to include this notice in its NDAs, the employer will lose the right to recover exemplary damages or attorneys’ fees in subsequent DTSA suits against individuals who did not receive the notice.  Thus, companies who are considering using the DTSA was a possible weapon against misappropriation should include a DTSA notification clause in their NDAs.

Photo of Heath Coffman Heath Coffman

Heath Coffman is a shareholder at Brackett & Ellis, P.C. in Fort Worth, Texas.  His practice includes commercial litigation, intellectual property, collections, professional malpractice defense, fiduciary litigation, and appeals.  You can contact him directly at hcoffman@belaw.com.

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  • Posted in:
    Business and Commercial
  • Blog:
    The Fort Worth Business & Employment Law Reporter
  • Organization:
    Brackett & Ellis, P.C.
  • Article: View Original Source

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