A bill to adopt the Uniform Trade Secrets Act (“UTSA”) has been pending in the Massachusetts Legislature since late January. Forms of the UTSA have been adopted in 46 states, as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Only New York, Texas, North Carolina, and Massachusetts have not adopted the UTSA.
The bill would supersede the definitions, procedures, and remedies applied in Massachusetts chapter 93A actions (regulating unfair and deceptive trade practices) for trade secret misappropriation. The UTSA expands the definition of “trade secret” to include information that has not been “continuously used in one’s business.” It leaves in place contractual remedies (i.e., non-disclosure agreements) so long as, to the extent contracts rely on confidentiality of information, such confidentiality be determined according to the definition of “trade secret” in the UTSA. This addresses an anomaly in Massachusetts created by an overly restrictive definition of trade secrets which requires “continuous use” of the trade secret and employers’ need to protect by contract “confidential information” that does not meet the restrictive definition.
The last action on the bill was a hearing before the Massachusetts Joint Committee on the Judiciary on February 28, 2012. Testimony before the Committee and a copy of the bill with both official comments on the UTSA and comments specific to the version proposed in Massachusetts, which is slightly different, are available here.
A more detailed discussion of the USTA, and its impact on non-competes, is available on our Non-Compete blog.