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This Wisdom of the Crowd, compiled from questions and responses posted on the Employment & Labor eGroup,* addresses how to fashion a notice that is to be included in employee agreements and independent contractor agreements to comply with the notice requirement of the Act.
*(Permission was received from the ACC members quoted below prior to publishing their eGroup Comments in this Wisdom of the Crowd resource.)
 
Question:
Looking for comments/suggestions on the wording of a notice to be included in employee agreements and independent contractor agreements to comply with the notice requirement of the Act.
Here's what I've come up with:
You should be aware that the Federal Defend Trade Secrets Act of 2016 provides immunity from civil or criminal liability for any employee or contractor who discloses a trade secret "in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney" where the disclosure by the employee or contractor is "solely for the purpose of reporting or investigating a suspected violation of law" or "is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal." Under proper circumstances this law may provide a limited exception to your obligations of confidentiality to the Company.
Thoughts?
Wisdom of the Crowd:

Response #1: Here is what I included in our employment agreements:

  • Pursuant to the federal Defend Trade Secrets Act of 2016, Employee shall not be held criminally or civilly liable under and federal or state trade secret law for the disclosure of a trade secret that:
  •  is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or
  • o is made to Employee's attorney in relation to a lawsuit for retaliation against Employee for reporting a suspected violation of law; or
  • o is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.1
Response #2: I would make a couple of changes to this. First, I'd change the wording "Employee shall not be held criminally or civilly liable". Even though this is the wording of the statute, many writing experts have noted that the word "shall" is overused and misused by lawyers more than any other word. It's also not a word that's commonly used outside of legal writing. In this context I wouldn't expect the typical employee to understand it.
I think the opening wording in the original post was much clearer: "the Federal Defend Trade Secrets Act of 2016 provides immunity from civil or criminal liability for any employee or contractor who".
Also, it isn't clear that the required notice includes the anti-retaliation part of the law since the reference is to "notice of the immunity." I think you can incorporate the sense of the anti-retaliation provision into the second bullet without explicitly mentioning anti-retaliation lawsuits.
So I would reword it as:
The federal Defend Trade Secrets Act of 2016 provides immunity from state and federal civil or criminal liability for [you] if [you] disclose a trade secret:
  •  in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, but in either case only if the disclosure is solely for the purpose of reporting or investigating a suspected violation of law; or
  •  in a complaint or other document filed with a court in a lawsuit or other proceeding, if the filing of that document is made under seal, and any other disclosure of the trade secret [you] make is only as allowed by the court.2
Response #3: Note that the law also specifically provides an alternate way to satisfy the immunity notice, codified at, 18 U.S.C. § 1833(b)(3)(B), which states:
(B) POLICY DOCUMENT. An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
Thus, rather than drawing out a roadmap for permitted disclosure to a potential rogue employee, we refer instead to our Code of Conduct (which is provided to the employee with an acknowledgement of receipt), which sets out our reporting policy.3
_________________________ 1Eric Rogers, IP Counsel, AGC Automotive Americas R&D, Inc., Michigan (Employment & Labor Law, June 6, 2016). 2David Munn, General Counsel, Pramata Corporation, Minnesota (Employment & Labor Law, June 9, 2016). 3Melissa Yoon, General Counsel, Ambry Genetics Corporation, California (Employment & Labor Law, June 9, 2016).
Region: United States
The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.
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