WHERE THE TRADE SECRET SITS: HOW THE ECONOMIC ESPIONAGE ACT IS INFLAMING TENSIONS IN THE EMPLOYMENT RELATIONSHIP, AND HOW SMART EMPLOYERS AND EMPLOYEES ARE RESPONDING ADAM WAKS * The dawning of the information age, coupled with a greater understanding of the value of intellectual property, has increased the quantity of proprietary information businesses choose to keep as trade secrets. An oftenunderappreciated cost of trade secrets is the effect they have on the employment relationship – they frequently result in employers and employees involving themselves in convoluted legal and contractual relationships beyond their own expectations or comprehension. Further complicating the matter is the Economic Espionage Act (“EEA”), which increases the stakes of employer-employee conflict by criminalizing the misappropriation of trade secrets. This note provides a primer to help both employers and employees deal with the specific issues trade secrets frequently create in the employment relationship, first by outlining the current status of trade secrecy law, then by examining how the EEA is changing the trade secrecy landscape, and finally by providing a practical summary of best practices.
INTRODUCTION ........................................................................................................393 I. THE CURRENT STATUS OF TRADE SECRECY LAW .........................................394 A. Civil Law: The Uniform Trade Secrets Act ............................................394 B. Criminal Law: Enter the Economic Espionage Act ...............................397 C. The Impact of the Economic Espionage Act on Trade Secrets Generally ................................................................................................................398 II. TRADE SECRECY LAW IN THE EMPLOYMENT CONTEXT ................................399 A. Trade Secrecy and the Employment Relationship: Policy .....................399 B. Trade Secrets or “Know-How” v. General Knowledge and Skill .........401 C. How the EEA Increases Conflict in the Employment Relationship........403 Adam Waks is a 2014 J.D. candidate at the New York University School of Law. He received a B.A. in Psychology and in English and Creative Writing from the George Washington University in 2007. He would like to thank Professors Rochelle Dreyfuss and Harry First for their comments and editing during the Innovation Policy Colloquium, for which this note was originally written. He would also like to thank Molly Ryan, Leah Rosenbaum, and the rest of the JIPEL editorial team for their thoughtful assistance. *
391