Earlier this year, I did a blog post on the status of the Uniform Trade Secrets Act (UTSA). In the blog, I noted that the UTSA has been enacted in 48 states, as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands, with New York and Massachusetts being the lone holdouts. At the time, the legislatures of both New York and Massachusetts were working on legislation that would enact the UTSA, but it did not appear likely that either state would enact it anytime soon.
Everything changed in September in Massachusetts when that state became the forty-ninth state to pass legislation to enact the UTSA. The UTSA was passed as part of a $1.1 billion economic-development bill that was signed into law on Aug. 10, 2018.
Two bills are pending in New York that would result in the adoption of the UTSA. However, both bills are stuck in committee and are unlikely to be passed this year.
The adoption of the UTSA in Massachusetts will enable businesses to enjoy enhanced protection for trade secrets. The UTSA eliminates a requirement in prior Massachusetts law that the trade secret be used continuously in the trade-secret owner’s business. The UTSA provides enhanced remedies for actual and threatened trade-secret misappropriation in that state.
Massachusetts has also enacted legislation in October that was directed at reforming the law relating to non-competition agreements between employees and employers. These agreements represent an important intersection between trade-secret law and employment law because they can be used to prevent employees from misappropriating trade secrets that they may learn about during the course of their employment.