Businesses have a significant interest in protecting not only their intellectual property in the form of federal patents, trademarks, and copyrights, but also in the day-to-day information that fuels their business. This can be customer lists, the specifics of transactions, plans for the future, and so on. Broadly, these are called “trade secrets” and businesses take great measures to prevent employees from divulging these trade secrets to others, out of a search for profit, carelessness, or even retribution. And both state and federal law gives employers the ability to take legal action against employees who improperly give away trade secrets.
In fact, the federal Defend Trade Secrets Act (DTSA), signed into law by President Obama in 2016, gives a federal cause of action to employers to sue employees for misappropriating trade secrets, and greatly expands the definition of what a trade secret is beyond what is contained in many state trade secret protection statutes. While you may think of things like recipes, blueprints, and designs as trade secret (e.g. the formula to Coca-Cola), the DTSA defines trade secrets to include “all forms and types of financial, business, scientific, technical, economic, or engineering information…if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”
When an employee becomes aware of illegal conduct occurring in the workplace – whether it be fraud carried out against the government, SEC violations, IRS fraud, or similar illegalities – there may be a worry on that employee’s part that sharing that information with others will expose them to federal trade secret theft liability, especially given the broad language of the DTSA. But the DTSA also provides specific protections for whistleblowers who seek to expose illegal conduct that could be considered “trade secrets,” provided the whistleblower share this information through the proper channels.
How the DTSA Protects Whistleblowers From Trade Secret Theft Liability
In 18 USC 1833, the DTSA specifically states that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any trade secret that is made:
- In confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and
- Made solely for the purpose of reporting or investigating a suspected violation of law; or
- Is made in a complaint filed in a lawsuit or other proceeding, if such a filing is made under seal.
The DTSA goes on to state that, should a whistleblower face retaliation from an employer, the whistleblower may also divulge any trade secrets to an attorney which are necessary to bring a retaliation lawsuit against the employer for its illegal retaliation.
The takeaway here is that a whistleblower can indeed divulge trade secrets from an employer in the process of bringing a whistleblower claim, but who the whistleblower shares this information with and in what context is critical to maintaining that protection. By working with an experienced whistleblower attorney, you can learn what options you have for financial recovery, what steps should be taken next, and how you can protect yourself from retaliation (and win further financial recovery should such retaliation occur).
Reach Out to an Experienced Whistleblower Attorney Today
At Kreindler & Associates, our experienced whistleblower attorneys will work with you every step of the way to determine your appropriate course of action, protect you from retaliation, and collect your much-deserved reward. All of our consultations are 100% confidential. Contact us today for an evaluation of your allegations and potential outcomes.
