Employers Get New Tools to Prevent Trade Secrets Theft

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New Jersey has enacted the New Jersey Trade Secrets Act ( The “Act”) which provides employers with strong remedies to protect against the theft or threatened theft of trade secrets by employees or others. The Act prohibits:

(1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

(2) Disclosure or use of a trade secret of another without express or implied consent of the trade secret owner by a person who:

(a) used improper means to acquire knowledge of the trade secret; or

(b) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was derived or acquired through improper means; or

(c) before a material change of position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired through improper means.

In general, a "trade secret" is information that has economic value because it is kept secret, not known to others outside an organization, and cannot be derived through such proper means as through license agreement, independent invention, reverse engineering and public observation. Rather, the Act prohibits the acquisition of trade secrets through such "improper means" as theft, bribery, misrepresentation, and breach of an express or implied duty to maintain the secrecy of, or to limit the use or disclosure of, the trade secret.

Among very important remedies, the Act authorizes a court to stop both actual and threatened misappropriations. 

While the Act clearly provides a powerful legal weapon for employers to prevent trade secret theft by employees and competitors, it is still advisable for employers to continue their use of confidentiality and non-competition agreements and policies.