Defend Trade Secrets Act (DTSA) Notice of Immunity Provision

Summary

This non-jurisdictional clause is a Defend Trade Secrets Act (DTSA) Notice of Immunity Provision that can be used as a clause in an employment agreement or contract to inform employees of the DTSA's whistleblower immunity. This clause includes drafting notes and practical guidance. The remedies for employers suing former employees for trade secret misappropriation under the DTSA include punitive damages and attorney's fees. To take advantage of these remedies, however, an employer must advise its employees of the existence of the whistleblower immunity in any contract or other employment agreement entered into after the enactment of the DTSA. 18 U.S.C. § 1833(b)(3). As such, advise employers to strongly consider updating the following documents to include either the required notice or a cross-reference to a policy document that includes a statement about the DTSA's whistleblower immunity: (i) employment contracts and agreements containing trade secret or confidentiality clauses, (ii) confidentiality agreements, (iii) nondisclosure agreements, (iv) company codes of conduct, (v) proprietary agreements, and (vi) noncompetition/nonsolicitation agreements. An employer may not be awarded attorney's fees or punitive damages under this statute in an action against an employee to whom notice was not provided. 18 U.S.C. § 1833(b)(3)(C). The chart below shows the total trade secret damages by type awarded from 2021 to 2023, including punitive damages and attorney's fees. Trade Secret Damages by Damage Award Type in Federal District Court Trade Secret Cases from 2021 to 2023 Source: Lex Machina®, Trade Secret Litigation Report 2024. DFJ = default judgment; CJ = consent judgment; Verdict = jury verdict; Merits = any other decision by the judge, including bench trials and summary judgments. For more information on Lex Machina and to sign up for a live demo, click here. Individuals performing work as contractors or consultants are considered employees. See 18 USC § 1833(b)(4). This clause has not been tailored for any jurisdiction. State laws may have different requirements. For information on state laws concerning trade secrets, see the Trade Secret Protection column in Non-competes and Trade Secret Protection State Practice Notes Chart. For jurisdictional templates and policies concerning trade secrets, see Non-competes and Trade Secret Protection State Expert Forms Chart. For more information on the Defend Trade Secrets Act, see Defend Trade Secrets Act (DTSA) Fundamentals and Defend Trade Secrets Act (DTSA) and Other Legal Claims and Recourse to Protect Employers' Confidential Information and Trade Secrets. For additional non-jurisdictional templates regarding trade secrets, see the landing page for Non-competes and Trade Secret Protection Templates at https://advance.lexis.com/api/permalink/68149141-5e0d-43f8-938c-515905ed4ce7/?context=1000522.