Judge Throws Out Trade Secret Theft Claims Based on Whistleblower Immunity

In what is believed to be a first-time occurrence under the Defend Trade Secrets Act, a U.S. District Judge tossed out claims against a person accused of stealing trade secrets based on the DTSA’s rules for immunity for confidential disclosures to attorneys while investigating suspected legal violations.

Under the DTSA, trade secret disclosures made in confidence to a federal, state or local official or to a lawyer are exempt from both criminal and civil liability, so long as that disclosure is made only for the purpose of investigating or reporting a suspected violation of the law.

In this particular case, Christian v. Lannett Co. Inc., an employer filed a counterclaim against a former employee who filed a lawsuit against the company on the basis of gender and disability discrimination. Wendy Christian, the employee in question, kept a company laptop for some time despite being required to return all company property. She eventually returned the laptop after supposedly erasing its hard drive, but did keep some company documents.

This happened before the DTSA went into effect on May 11, 2016. After the DTSA went into effect and during discovery in the case, Christian handed over more than 22,000 pages of documents from her job, which included trade secret material, to her attorneys.

Lannett sued her under the DTSA and other laws, but the U.S. District Judge ultimately ruled the disclosures were protected under that same law.

Stronger whistleblower protections

This case is just the latest example of the strong protections that are now afforded to whistleblowers across the United States. People who are aware of company wrongdoing are able to report that wrongdoing to their attorneys or to investigators and enforcement agencies without having to fear they will lose their job or will be otherwise retaliated against.

For more information on how to proceed with a whistleblower claim, consult a skilled Dallas attorney with Kardell Law Group.