Katherine E. Perrelli to Speak on Defend Trade Secrets Act for Boston Bar Association
“2016 Legislative Compromise or Defend Trade Secrets Act Preemption?”
Litigation Department chair Katherine E. Perrelli will be a panelist at the Boston Bar Association’s 8th Symposium on Non-Compete Agreements and Trade Secrets. Since 2009, the BBA has hosted this symposium bringing together drafters, sponsors, supporters and critics of state bills to reform the use of employee non-compete agreements (ENCAs) and, separately, alternatively or complementarily, to enact the Uniform Trade Secrets Act (UTSA) adopted by 48 other States.
In 2015, the Massachusetts Senate overwhelmingly approved a BBA-tweaked UTSA along with a compromise mechanism to discourage overreaching ENCAs, but was not supported by the House. On March 2, 2016, Speaker DeLeo announced that he would support certain limitations of ENCA enforcement, which are expected to be negotiated in the final months of the session.
Meanwhile, Congress voted in April nearly unanimously (Senate 87-0, House 410-2) to enact the Defend Trade Secrets Act of 2016 (“DTSA”), creating a federal private right of action for UTSA “misappropriation” of Economic Espionage Act “trade secrets” that are “related to a product or service used in, or intended for use, in interstate or foreign commerce.”
DTSA embraces “employee mobility” (a la California) as a federal policy, and injunctions under it expressly may not:
prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows; or
otherwise conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business;
This panel will explore the possible preemptive effects of DTSA on Massachusetts law and possible responses, including whether suits against misappropriation of trade secrets not currently used or merely threatened (e.g., “inevitable disclosure”), rejected by some Massachusetts courts under the 1939 Restatement of Torts formulation, should be enabled by enactment of the UTSA.
For more information an to register, click here.