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The New Defend Trade Secrets Act – Employers Can Now Sue an Employee Under Federal Law for Taking Trade Secrets

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A click of the mouse, forwarding an email, downloading a file – in just seconds you can take, copy, share, or post your employer’s confidential information, otherwise known as “trade secrets.” But be aware, those few seconds can be costly under the new federal Defend Trade Secrets Act, which became effective May 11, 2016. As employees, you need to be aware that almost any type of information can qualify as a “trade secret” if:

  • The information is actually secret;
  • Your employer made reasonable efforts to protect that secrecy; and
  • The information derives value from being secret.

Under the new federal Defend Trade Secrets Act, if you take or acquire your employer’s trade secret, or use or reveal a trade secret, it can cost you a boatload of money, because if the court determines you violated the Act, you MUST compensate your employer for its losses and for your unjust benefits, otherwise known as “compensatory damages.” Moreover, if the court finds you acted willfully or maliciously in stealing, using, or revealing your employer’s trade secrets, even if you feel entitled to the information, you may have to pay double the amount of the compensatory damages AND your employer’s attorneys’ fees.  A federal court may also seize the alleged trade secret or otherwise prevent you from using or disclosing it, until the court decides whether you violated the Act.  On the bright side, the federal Act can require an employer to pay your attorneys’ fees in certain situations, such as if the court finds that your employer sued you “in bad faith.”

Before the new federal Act, an employer could sue an employee in state court for stealing trade secrets under Florida’s Uniform Trade Secrets Act and file with the government criminal charges under various criminal statutes for this theft. But the new federal Act now gives employers the option of suing an employee in federal court. The best way to avoid prosecution under the federal and Florida laws relating to trade secrets is to be very careful not to take, copy, email, post, download, share, reveal or otherwise disclose confidential or proprietary information that might be considered a trade secret of your employer.

Thank you for reading our blog! The information shared here is accurate at the time of posting, but may not reflect changes in the law. Although intended for educational purposes, this content is not legal advice. If you have any questions about your specific employment situation, you should contact an employment attorney.

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