Protection of Employers' Trade Secrets and Confidential Information

by Practical Law Labor & Employment (based on original materials by Joseph W. Hammell, formerly of Dorsey & Whitney LLP)

A Practice Note that discusses best practices for protecting trade secrets and other confidential information in the employment context. This Practice Note defines what constitutes a trade secret under the Uniform Trade Secrets Act (UTSA), the federal Defend Trade Secrets Act (DTSA), and state common law, distinguishing these from other forms of confidential information that may lack statutory protection but still require safeguarding. It explores the legal recourse available to employers when information is wrongfully acquired or misused, including claims for misappropriation, breach of contract, and violations of federal statutes like the Economic Espionage Act (EEA) and the Computer Fraud and Abuse Act (CFAA). The guidance also covers the critical role of contractual and policy protections, such as confidentiality, non-compete, and non-solicitation agreements, while noting employer obligations like the DTSA's immunity notice requirement. Finally, this Practice Note outlines practical strategies for protecting company data, from implementing security measures and training programs to managing generative AI risks and handling employee departures. This Note is jurisdiction-neutral. For information on specific states' laws, see Trade Secret Laws: State Q&A Tool and State Restrictive Covenant Toolkit. For a 50-state comparison of non-compete laws and requirements, see Quick Compare Chart: State Non-Compete Laws.