The Defend Trade Secrets Act (DTSA) is a federal law enacted in 2016 to protect trade secrets from theft and misappropriation. One of the ways in which businesses can protect their trade secrets is through a separation agreement.

A separation agreement is a legal document that outlines the terms and conditions of an employee`s departure from a company. It includes provisions that prevent the employee from disclosing confidential information about the company, including trade secrets.

Under the DTSA, businesses can use separation agreements as an additional layer of protection for their trade secrets. If an employee breaches the confidentiality provision of the separation agreement and misappropriates trade secrets, the company can take legal action.

To ensure that a separation agreement is effective in protecting trade secrets under the DTSA, it should include the following:

1. Confidentiality provisions: The separation agreement should include clear and specific language that prohibits the employee from disclosing confidential information about the company, including trade secrets. It should also outline the consequences of breaching this provision.

2. Definition of trade secrets: The separation agreement should define what constitutes a trade secret for the company. This can include customer lists, formulas, or other proprietary information that is not known to the public and provides a competitive advantage.

3. Acknowledgment of the DTSA: The separation agreement should include a statement that the employee is aware of the DTSA and agrees to comply with its provisions.

4. Remedies for breach: The separation agreement should outline the remedies available to the company in the event of a breach, including injunctive relief, damages, and attorney`s fees.

It is important for businesses to consult with legal counsel when drafting separation agreements to ensure that they comply with state and federal laws, including the DTSA.

In conclusion, separation agreements can be a useful tool for businesses to protect their trade secrets under the DTSA. By including clear confidentiality provisions, defining trade secrets, acknowledging the DTSA, and outlining remedies for breach, businesses can strengthen their legal position in the event of trade secret misappropriation.