Keep Up with Current Employment Law Issues

The Defend Trade Secrets Act of 2016 (“DTSA”) turned five years old on May 11, 2021.  As a follow-up to our last article concerning misappropriation of trade secrets litigation, we are devoting this article to a review of the litigations which have arisen out of this relatively new statute.

Every state has common law or statutory law prohibitions against the theft or disclosure of trade secrets. The Federal law is the Defend Trade Secrets Act of 2016 (the “DTSA”) (18 U.S.C. §1836, et seq.). New York relies on common law which creates civil liability for misappropriation of trade secrets.

Trade secrets are only protected under the DTSA if they are related to “a product or service used in, or intended for use in, interstate or foreign commerce.” (18 U.S.C. § 1836(b)).

The faithless servant rule is grounded in the law of agency and provides a tool that employers can use to try to claw back all compensation paid to a former employee upon demonstrating that the employee repeatedly engaged in disloyal and unfaithful conduct during the term of his or her employment.