President Obama signed a bill into law on Wednesday that grants corporate whistleblowers new legal tools to fight back against bosses who retaliate.
The legislation explicitly states that federal and state trade secret law must exempt disclosures made by employees to government officials “reporting or investigating a suspected violation of law.”
The bill, called the Defend Trade Secrets Act, simultaneously makes it easier to sue in federal court for alleged unauthorized disclosures of confidential information.
Previously, those alleging an illegal breach of trade secrets could only seek relief in state courts–or in federal courts with special permission from the FBI and US Attorneys.
Transparency advocates hailed the provisions guaranteeing immunity for whistleblowers. Tom Devine, the legal director of the Government Accountability Project (GAP), said the law will protect them “from any form of harassment, including civil ‘slap suits’ or criminal actions to retaliate.”
“Until now, US whistleblower laws have been limited to protection against workplace harassment,” he said.
In a statement released Thursday, GAP noted the bill also forces employers to let workers know they have the right to disclose trade secrets for the purposes of reporting criminal activity.
“An employer must provide the notice of whistleblowing immunity to maintain eligibility for exemplary damages or attorneys’ fees in litigation for unprotected disclosures,” the advocacy group stated.
The whistleblower provisions of the Defend Trade Secrets Act were championed by the leaders of the Senate Judiciary Committee, Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.).
“It is important that whistleblowers have strong and effective avenues to come forward without fear of intimidation or retaliation,” they said in January, after the committee approved of the legislation.
The bill itself was initially proposed by Sens. Orrin Hatch (R-Utah) and Chris Coons (D-Del.).
While the whistleblower provisions have been hailed by pro-transparency groups, others have decried the Defend Trade Secrets Act for creating secretive legal avenues for asset seizure.
The law allows for litigants to launch an “ex parte application…for the seizure of property” to stop trade secret dissemination. “Ex parte” is a Latin term to describe a legal procedure in which one party is absent—and, therefore, unable to challenge it.
Language in the legislation only allows for the motions in “extraordinary circumstances.” The procedural reform, nonetheless, has worried some observers and academics.
“Unfortunately, it creates substantial opportunity for competitive abuse,” intellectual property law writer Eric Goldman noted in Forbes.
When President Obama signed the legislation into law on Wednesday, he made no mention of its whistleblower provisions. He primarily hailed it for deterring people from “stealing trade secrets from our American innovators,” and used the signing ceremony to tout his trade agenda.
“I should add that Congress could do even more if we get the Trans-Pacific Partnership passed, because TPP contains additional enforcement tools for us,” he said.
