Employment Agreements Will Need to Be Reviewed Upon Passage of New Trade Secrets Act
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 NJ legislation is required reading. The State Assembly has given final legislative approval to the New Jersey Trade Secrets Act leaving only final approval by Gov. Chris Christie before enactment. If passed, there may be significant implications for employers who possess information protected under the Trade Secrets Act. This warrants review of any current employment agreements or 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 need to 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 need to 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 will create a statutory right for employers where only case law has existed to date. We at Hill Wallack stand ready to assist with any questions and assistance needed in view of this new legislation.