Trade Secret Exception: Whistleblower Immunity

Trade Secret Exception: Whistleblower Immunity

Federal whistleblower laws (see the Defend Trade Secrets Act, 18 U.S.C. 1833) protect an individual from criminal and civil liability for the disclosure of trade secrets to government officials in connection with reporting a suspected violation of law. Such laws also permit limited use of such trade secret information by an employer in connection with an anti-retaliation lawsuit in which a former employee sues the employer for wrongful termination (or other employment action) based on the allegation that such termination constituted retaliation for reporting legal violations by the employer.

Notice of this statutory exception and immunity from disclosure liability may be incorporated into the NDA as follows:

Exemplar N26B-1

Each Party is hereby given notice of the immunity set forth in 18 USC § 1833(b).

Exemplar N26B-2

Pursuant to the Defend Trade Secrets Act of 2016, 18 USC Section 1833(b), the receiving party is on notice and acknowledges that, notwithstanding the foregoing or any other provision of this Agreement:

a. “Immunity. 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 (A) 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 (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

b.  Use of Trade Secret Information in Anti-Retaliation Lawsuit. 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 (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

Exemplar N26B-3

Notwithstanding anything to the contrary in this Agreement or any other agreement between the Parties, the Parties understand and agree that nothing in this Agreement or any other agreement between the Parties is intended to interfere with or restrain the immunity provided under 18 U.S.C. section 1833(b) for confidential disclosures of trade secrets to government officials, or lawyers, solely for the purpose of reporting or investigating a suspected violation of law; or in a sealed filing in court or other proceeding. Each Party is responsible for its own compliance with the notice of immunity set forth in Section 1833(b) in any agreement, including any updates.

Exemplar N26B-4

Notwithstanding anything to the contrary herein, 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 in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. 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 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 the Disclosing Party 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 files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to the court order.