Every employer should be aware of how to address discrimination claims, an issue that may arise when employees are required to sign contractual covenants. Pursuant to N.Y. Gen. Oblig. Law § 5-336(2), the law requires employees or potential employees to be notified that an employment agreement or contract provision, entered into on or after January 1, 2020, does not prevent them from cooperating with law enforcement or participating in an investigation with (1) a self-retained attorney duly permitted and admitted to practice law, (2) a local human rights commission, (3) the New York State Division of Human Rights, (4) or the Equal Employment Opportunity Commission (EEOC).
Whistleblowing Exceptions in Confidential Covenants/Agreements
With the country becoming more litigious every day, employers should be careful to address key employment issues, such as whistleblowing, that may have a significant impact on employee rights. For this reason, employers should ensure that employees have been provided with proper notice of their rights when confidentiality covenants/agreements are being drafted.
For instance, an employer should, as a best practice, make sure that language through which “whistleblowing,” in every sense of the concept, has been explicitly excepted when provisions concerning confidentiality require being included in agreements, as well as in other covenants by which whistleblowing could be deterred.
Pursuant to 18 U.S.C. § 1833, the Defend Trade Secrets Act (DTSA) requires exceptions and provisions that explicitly state that employees are allowed to participate in government investigations and/or cooperate with government agencies, even if it requires them to disclose trade secrets or confidential information, to be carved out in confidentiality covenants.
As codified under the statute, as long as a disclosure of trade secrets is made solely with the intention to investigate or report a law violation or made in confidence to government investigators, the exception or provision in a confidentiality covenant should make it clear that the employee involved in the disclosure would neither be civilly nor criminally liable.
In our last blog post under this series titled “N.Y. Law on Determining if Information Constitutes Trade Secrets,” we will review several factors that are considered by New York courts when determining whether information, which may be allegedly stolen, misappropriated, disclosed, or used, constitutes a trade secret.
As usual, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always Rising Above the Bar,
Isaac T.,
Legal Writer, Author, and Publisher.