The Defend Trade Secrets Act (DTSA) is a federal law that provides companies and individuals with the ability to protect their trade secrets and confidential information from theft or misappropriation. In order to take advantage of the protections afforded by the DTSA, it is important to include a DTSA notice in your non-disclosure agreement (NDA). This article will provide an overview of DTSA notices and how to include one in your NDA.
What is the DTSA?
The DTSA was enacted in 2016 and provides companies and individuals with a federal cause of action (i.e., the right to sue) for the theft of trade secrets. Prior to the DTSA, trade secret protection was only available under state law, which could be difficult to enforce in cases where the defendant had moved to another state. The DTSA provides a uniform standard for trade secret protection and allows companies and individuals to pursue trade secret theft in federal court.
What is a DTSA notice?
A DTSA notice is a statement in your NDA that informs individuals (e.g., employees and independent contractors) of the rights and remedies available under the DTSA. The following is an example DTSA notice you can include in your NDA:
“Defend Trade Secrets Act. Pursuant to the Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) 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. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.”
Why is a DTSA notice important?
If you fail to include a DTSA notice in an NDA between your company and an individual who is receiving confidential information under the NDA, the damages your company can receive in court in the event of a breach of the NDA may be limited. Additionally, including a DTSA notice in your NDA is important because it provides employees and contractors with the knowledge of their rights under the DTSA. This information can be helpful in cases where an employee or contractor may be considering reporting suspected illegal activity, as they will be aware of the protections afforded to them under the DTSA. Additionally, the DTSA notice serves as a reminder to employees and contractors of their obligations under the NDA and the importance of maintaining the confidentiality of your trade secrets and confidential information.
Does the Defend Trade Secrets Act apply to independent contractors?
Yes, the DTSA applies to independent contractors in the same manner as it applies to employees. Independent contractors are often hired to perform services that involve access to trade secrets or confidential information, and the DTSA provides them with the same protections and remedies as employees.
It is important to include a DTSA notice in your NDA with independent contractors, as this will ensure that they are aware of their rights and obligations under the DTSA and the NDA. This can help to prevent any misunderstandings or disputes regarding the confidentiality of your trade secrets and confidential information.
Additionally, it is important to include language in your NDA with independent contractors that explicitly defines their obligations with respect to maintaining the confidentiality of your trade secrets and confidential information. This will help to ensure that the independent contractor understands their obligations and is able to fulfill them properly.
SixFifty can help
Sixfifty’s Employment Agreements platform allows users to generate a customized NDA by taking them through a simple Q&A just like a lawyer would. SixFifty pairs easy-to-use technology with actual legal expertise to provide the best legal document generators out there. Our NDA tool includes the appropriate DTSA notice so you don’t even have to think about whether or how to include it.
Ready to protect your confidential information? Schedule a product demonstration with SixFifty to see the document generator in action. Create your own customized NDA today with a Business Docs subscription or à la carte in the SixFifty Marketplace.