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NEW DEFEND TRADE SECRETS ACT MANDATES SPECIFIC NOTICE PROVISION IN AGREEMENTS REGARDING CONFIDENTIAL INFORMATION AND/OR TRADE SECRETS

September, 2016

In May 2016, Congress passed and President Obama signed the Defend Trade Secrets Act (the “DTSA”). The DTSA includes new whistleblower protections for employees and independent contractors who disclose a trade secret to a federal, state or local official in conjunction with reporting a violation of law or in a lawsuit, filed under seal. This new whistleblower protection effectively provides an exception to most agreements and policies with employees/independent contractors that prohibit them from disclosing trade secrets or confidential information outside the company, or in a manner which is not otherwise authorized by the company. Importantly, the DTSA states that all agreements that govern the use of trade secrets or other confidential information which are entered into between an employer and an employee now must contain a notice to employees regarding their whistleblower rights. Therefore, all employers should update the agreements used with employees or independent contractors to include the mandatory notice. Please contact us for samples of the language that can be added to such agreements to achieve compliance with the DTSA.