January 13, 2012
New Trade Secrets Act Requires Review of Employment Agreements
Written By: David J. Truelove and Christina L. Saveriano
Your most important business asset is that which sets you apart from your competitors. If that asset is protectable, confidential information and/or a "trade secret," reviewing and analyzing recently-passed New Jersey legislation is required reading.
Gov. Chris Christie has recently signed the New Jersey Trade Secrets Act. This law has significant implications for employers that possess information protected under the Trade Secrets Act. This warrants review of any current employment agreements and restrictive covenants currently in place for revision. Likewise, employers should consider entering into such agreements with employees if no such agreements are in place.
As a starting point, employers should review any existing agreements which define the term “trade secret” to confirm that it is consistent with the definition under the Trade Secrets Act. In addition, employers should consider alerting employees to the consequences of misappropriation of the employer’s trade secret which under the Trade Secrets Act include the entry of injunctive relief, imposition of punitive damages and an award of costs and attorney’s fees.
Furthermore, employers should be aware that an action for misappropriation of a trade secret against an employee, under the Trade Secrets Act, must be brought within three years after the misappropriation is discovered. Passage of the New Jersey Trade Secrets Act now creates a statutory right for employers where only case law has existed to date.
We at Hill Wallack LLP stand ready to assist with any questions and assistance needed in view of this new legislation.
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This article provides information of general interest and is not intended, and should not be used, as a substitute for consultation with legal counsel. Any questions regarding the specific issues raised in this article should be directed to the authors or to your contacts at Hill Wallack LLP.