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The author discusses three implications for private funds after the Defend Trade Secrets Act (DTSA), a federal statute, recently went into effect. Specifically, the author argues that DTSA will broaden the scope of documents protected under state Open Records Acts, protect more information from disclosure under non-disclosure agreements, and may require employers to comply with certain whistleblower provisions that protect whistleblowers from liability for disclosing confidential information in specific circumstances.

Key Takeaways:

  • The DTSA provides trade-secret protections on the federal level that are similar to those available through the Uniform Trade Secrets Act (UTSA) adopted (with variations) in 48 States.
  • Second, the DTSA independently may provide further protections for fund documents as “trade secrets” under its broader definition.
  • Third, the DTSA may affect a private fund’s disclosure strategy and litigation options when unauthorized disclosure occurs.

“With the passage of the DTSA, private funds should be cognizant of their obligations regarding whistleblower immunity, and of potential new grounds to assert trade-secret protection and seek additional enforcement options where misappropriation occurs.”