Misconstruing Whistleblower Immunity Under the Defend Trade Secrets Act

In crafting the Defend Trade Secrets Act of 2016 (DTSA), Congress went beyond the federalization of state trade secret protection to tackle a broader social justice problem: the misuse of nondisclosure agreements (NDAs) to discourage reporting of illegal activity in a variety of areas. The past few decades have witnessed devastating government contracting abuses, regulatory violations, and deceptive financial schemes that have hurt the public and cost taxpayers and investors billions of dollars. Congress recognized that immunizing whistleblowers from the cost and risk of trade secret liability for providing information to the Government could spur law enforcement. But could this … Read more

Deterring Corporate Fraud from the Inside: Encouraging Whistleblowing Without Jeopardizing Trade Secrecy

Since 2000, the financial world and global economy have been shaken by two catastrophic and entirely avoidable waves of financial scandals. At the turn of the millennium, accounting fraud at Enron, Worldcom, Tyco, and several other large enterprises rocked financial markets and the U.S. economy. In response, Congress enacted the “Public Company Accounting Reform and Investor Protection Act of 2002,” commonly known as the Sarbanes-Oxley Act (SOX). SOX imposed stronger reporting requirements and stiffer criminal penalties to prevent corporate fraud. SOX also established a whistleblower program to pierce the “corporate code of silence” by encouraging well-placed insiders to assist in … Read more