Defend Trade Secrets Act of 2016
This newly signed law strengthens the protections for whistleblowers who report illegal practices to the government, particularly with regards to trade secrets. In the past, employees who signed “gag orders” or non-disclosure agreements were hampered in their ability to report malfeasance, particularly in the realms of military contractors and pharmaceuticals, two of the industries that are most commonly sued by whistleblowers in qui-tam lawsuits.
There are a few key provisions of the law, designed to close loopholes used by these companies.
- An individual cannot be held criminally or civilly liable for disclosure of a trade secret made in confidence to a federal, state or local government official, or to an attorney for the sole purpose of reporting or investigating a suspected legal violation.
- An individual cannot be held liable for disclosure of a trade secret in a complaint or other lawsuit related document if the filing is made under seal.
- An employer is required to provide notice of the immunity relating to lawful disclosures in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
- An employer must provide the notice of whistleblowing immunity to maintain eligibility for exemplary damages or attorneys’ fees in litigation for unprotected disclosures.
By strengthening whistleblower protections and asserting the primacy of those protections over non-disclosure agreement, the law helps defend whistleblowers and ensure that people come forward when they are aware of wrongdoing by healthcare providers, contractors, pharmaceutical companies, and other entities that work with the government. However, it is vitally important that potential whistleblowers contact an attorney who handles qui-tam cases. Reporting information and retaining whistleblower protections can be a complicated process, and an attorney can help you avoid waiving your rights when you report wrongdoing.
The False Claims Act, which has been in place since the Civil War, allows individuals to sue companies that are defrauding the government. To qualify as a qui-tam litigant, a person must have information not available to the public, which puts them in a unique position to blow the whistle on corrupt or fraudulent practices. These whistleblowers act on behalf of the government, and generally are allowed to keep about 10% of any recovery the government makes.
Since whistleblowers are in invaluable tool to help prevent companies from defrauding the government, they are offered significant legal protection from retribution from their employers. They cannot be harassed or fired as a result of their whistleblowing actions, and are allowed to retain anonymity to protect against biased decisions in promotions and other matters.
Industries that are frequent subjects of qui-tam lawsuits often claim that these protections, and the frequent use of what they claim are overly burdensome judgements, are detrimental to their industries, and have long sought to curb the power of the False Claims Act. However, lawmakers have recently done the opposite, with the passage of the Defend Trade Secrets Act of 2016.
To speak with one of the California qui-tam/whistleblower attorneys at Evans Law Firm, please contact out office at (415) 441-8669, or by email at info@evanslaw.com. Our lawyers have a great deal of experience in steering False Claims Act actions, as well as a deep understanding of the healthcare industry, nursing facilities, and caregiving services.
