President Signs “Defend Trade Secrets Act” – Includes Key Whistleblower Protections

The Government Accountability Project applauds landmark whistleblower protections Defend Trade Secrets Act of 2016 signed yesterday by President Obama, which would create significant safeguards for employees, contractors and consultants who lawfully disclose trade secrets to report illegality. Section 7 of the Act, championed by Senate Judiciary Chair Charles Grassley (R-IA) and Ranking Member Patrick Leahy (D-Vt.), establishes criminal and civil immunity for employees who make disclosures to the government or to an attorney and strengthens “anti-gag” notice requirements.

Specifically, under the Act:

• An individual cannot be held criminally or civilly liable for disclosure of a trade secret made in confidence to a federal, state or local government official, or to an attorney for the sole purpose of reporting or investigating a suspected legal violation.
• An individual cannot be held liable for disclosure of a trade secret in a complaint or other lawsuit related document if the filing is made under seal.
• An employer is required to provide notice of the immunity relating to lawful disclosures in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
• An employer must provide the notice of whistleblowing immunity to maintain eligibility for exemplary damages or attorneys' fees in litigation for unprotected disclosures.

In response to these protections, GAP legal director Tom Devine commented, “This is a significant whistleblower-based reform law because it prevents the trade secrets doctrine from being used to cover up corporate misconduct. It is a landmark breakthrough for whistleblowers, because it protects them from any form of harassment, including civil 'slap suits' or criminal actions to retaliate. Until now, U.S. whistleblower laws have been limited to protection against workplace harassment.”