- New Federal Law REQUIRES UPDATED RESTRICTIVE COVENANTS
- September 12, 2016 | Authors: Meredith Merry Campbell; Joy C. Einstein; Gregory D. Grant
- Law Firm: Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Potomac Office
- The Defend Trade Secrets Act of 2016 grants federal protection for trade secret misappropriation. It requires that the party bringing a civil action be (1) the owner of the trade secret and (2) that the trade secret be “related to a product or service used or intended to be used in interstate or foreign commerce.”
The new trade secrets law requires any contract or agreement with an employee to include a notice provision addressing the immunity from disclosure of trade secrets to the government or the courts. If an employer does not comply with the notice requirement, it may not be awarded certain damages or fees in a future action against an employee.
It is also worth noting that the new law permits a court, in extreme circumstances, to approve seizure of property by federal law enforcement to prevent further “dissemination of the trade secret.”
The statute was enacted on May 11. It is very important that your restrictive covenants are reviewed to ensure compliance with the new notice requirement.