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Pennsylvania Federal Court Explores the Contours of the DTSA

Pennsylvania Federal Court Explores the Contours of the DTSA

By: Kelly Muensterman

Recently, the U.S. District Court for the Eastern District of Pennsylvania determined a former employee did not violate the Defend Trade Secrets Act (“DTSA”) where she disclosed confidential information of her former employer to her husband and her attorney.

In Christian v. Lannett Company, Inc.,[1] plaintiff Wendy Christian sued her former employer, Lannett, alleging violations of Title VII, the ADA, and the FMLA. In response, Lannett counterclaimed, alleging Christian violated the DTSA by misappropriating Lannett’s trade secrets.  The DTSA defines a misappropriation of trade secrets where one discloses or uses another’s trade secret without the consent of the trade-secret owner.  However, the DTSA also provides immunity for the disclosure of a trade secret “in confidence…to an attorney…solely for the purpose of reporting or investigating a suspected violation of law.”[2]

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Planning for International Trade Secret Protection

Planning for International Trade Secret Protection

By Jon J. Olafson

Your company has worked hard to ensure that its trade secrets are protected under the applicable state laws, and modified its contracts and policies to reflect the new federal trade secret protection standards. When your company has grown internationally, what happens then to trade secret protection? What can your company do to ensure that secrets fundamental to your business remain protected, even internationally?

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Is Ignorance Bliss When it Comes to Restrictive Covenants?

Is Ignorance Bliss When it Comes to Restrictive Covenants?

By Gillian McKean Bidgood

In Acclaim Systems, Inc. v. Infosys, Ltd, et al., the Third Circuit demonstrated that ignorance can sometimes be bliss when it comes to restrictive covenants. In that case, a large cable provider contracted with Acclaim Systems to provide information technology consulting services for a customer relations platform. Partway through the project, the cable provider transferred the work to Infosys. One Acclaim Systems employee and three subcontractors followed the project to Infosys. Each of the four workers had non-competes that prohibited them from working for another company on the cable project. Infosys never learned of those agreements despite asking the workers (including a question on the job application) and asking the staffing company providing the subcontractors. The Third Circuit affirmed summary judgment for Infosys because it could not intend to interfere with non-competition covenants of which it was unaware. This case highlights four important employment practices.

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3 Steps for Employers to Preserve Rights and Remedies Under the Recently Enacted Defend Trade Secrets Act

3 Steps for Employers to Preserve Rights and Remedies Under the Recently Enacted Defend Trade Secrets Act

By Christopher L. Johnson

On May 11, 2016, President Obama signed into law the federal Defend Trade Secrets Act (DTSA), which now provides a federal claim for misappropriation of trade secrets. Under the new law, owners of trade secrets may seek remedies, including damages, for any loss incurred by the misappropriation; court orders allowing civil seizure to recover stolen trade secrets; injunctive relief forbidding additional misappropriation; and, in certain cases, double damages and attorneys’ fees.

The DTSA also provides immunity to whistleblowers from liability for confidential disclosure of a trade secret to the government or in a court filing. To have the full range of remedies available under the DTSA, employers must give notice of the whistle blower immunity to employees in “any contract or agreement with the employee that governs the use of trade secret or other confidential information,” including existing contracts that were updated on or after May 12, 2016. Employers must also advise employees that an individual who has filed suit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret under certain conditions. Thus, employers should begin taking action now to preserve rights and remedies under the DTSA.

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