Trade Secrets & Employee Mobility

As we all await rulings on the lawsuits challenging the FTC’s Noncompete Rule (one of which may be decided later today), we provide an update on the Knicks/Raptors trade secret case that we previously discussed on EBG’s Spilling Secrets Podcast Series and blogged about here.  Although the Knicks had a successful year on the court, they suffered an in court loss last week to the Toronto Raptors.    

In the March 2024 edition, Bracket-Busting Trade Secret and Non-Compete Disputes in Sports, we discussed the Knicks’ federal court action against the Toronto Raptors for theft of trade secrets.  We noted that the Knicks sought neither a Temporary Restraining Order nor a Preliminary Injunction and that the defendants filed a motion to dismiss or, alternatively, to stay the case pending arbitration before the Commissioner of the NBA.      

In a lawsuit filed in the United States District Court for the Southern District of New York, the Knicks alleged that their former employee and now current Raptors employee, Ikechukwu Azotam, misappropriated the Knicks’ confidential and proprietary information at the behest of the Raptors, in violation of the Defend Trade Secrets Act (“DTSA”), Computer Fraud and Abuse Act (the “CFAA”), as well as various common law claims.  The defendants moved to dismiss or, alternatively, to compel arbitration pursuant to the NBA’s Constitution and By-Laws, which provide that the NBA Commissioner shall have complete and final jurisdiction over any dispute involving two or more members of the NBA. 

Effective as of October 1, 2018, Massachusetts will become the 49^th state to adopt a version of the Uniform Trade Secrets Act (leaving New York as the only holdout). Massachusetts did so as part of a large budget bill recently signed into law, which also resulted in the adoption of the Massachusetts Noncompetition Agreement Act. (The text of the Massachusetts version of the Uniform Trade Secrets Act is set out on pages 47-52 of the bill, H. 4868, while the effective date is set out on page 117. Here is a link to the entire budget bill.)

While there are differences from existing Massachusetts ...

As the law’s first anniversary approaches, federal courts continue to adjudicate claims arising under the Defend Trade Secrets Act (“DTSA”).  Enacted on May 11, 2016, DTSA provides the first private federal cause of action for trade secret misappropriation, allowing parties to sue in federal court for trade secret misappropriation.  Although the law is in its infancy, employers and legal practitioners filing complaints that assert DTSA claims must nevertheless adhere to longstanding rules of pleading set forth by the Supreme Court and the Federal Rules of Civil Procedure ...

David Clark, contributor to this blog and Senior Counsel at Epstein Becker Green, is featured on Employment Law This Week, discussing the Defend Trade Secrets Act of 2016 (DTSA).

Under the DTSA, employers can now sue in federal court for trade secret misappropriation. Though there is some overlap with the Uniform Trade Secrets Act—adopted in some version by 48 states—the DTSA marks a notable change in how these cases are litigated, creating a federal civil cause of action. The new law contains broad whistleblower protections and new requirements for employers to give notice ...

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (“DTSA”), which became effective immediately. The DTSA provides the first private federal cause of action for trade secret misappropriation, and it allows parties to sue in federal court for trade secret misappropriation—regardless of the dollar value of the trade secrets at issue.

Although the DTSA’s remedies largely overlap with those in the 48 states that have adopted some version of the Uniform Trade Secrets Act, the DTSA will nevertheless significantly alter how trade secret ...

After years of stops and starts in Congressional efforts to pass a law creating a federal claim for misappropriation of trade secrets that can be pursued by private citizens and companies (as opposed to federal prosecutors), the last few weeks have produced an astonishing acceleration of those efforts.  This month, the Defend Trade Secrets Act has been approved by both houses of Congress in resounding fashion.  It is on the brink of being enacted into law.

On April 27, 2016, the House of Representatives voted 410-2 to pass the Defend Trade Secrets Act.  That vote came quickly on the heels of ...