Employment agreements generally include non-disclosure provisions (“NDAs”).  Without an NDA, an employer may not be able to stop an employee from misappropriation of company trade secrets or other confidential information. By signing an NDA, an employee agrees to keep the details of his or her work confidential.

But what about illegal activity that employees may witness? Are they prevented from reporting that too, for fear of breaching their NDAs? Under the Defend Trade Secrets Act 2016 (“DTSA”), signed into law by President Obama on May 13, 2016, the short answer is “No.” 

The DTSA expressly states that an individual cannot be held criminally or civilly liable under any federal or state trade secret law if they disclose a trade secret “(A)…in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.”(18 U.S.C. § 1833.) In other words, DTSA provides immunity to “whistle-blowers.”

The DTSA requires employers to alert their employees about the trade secret "whistle-blower immunity" clauses in any employee contract or agreement that is entered into or updated after May 13, 2016.  In practice, this means employers should revise employment agreements, alert anyone who has signed one (e.g., employees, third-party contractors, and consultants) about the new law, and have them sign a revised agreement.  Each company will need to determine its own appropriate revised NDA language.  There is no particular penalty per se for non-compliance, but failure to comply may prevent the employer from recovering exemplary damages or attorney fees in an action brought under the DTSA for theft of trade secrets against an employee to whom no notice was provided.

While the full impact of DTSA on the area of trade-secrets law remains to be seen, one thing is clear: Employers should ensure that their NDAs comply with the new law. And that means changing employment agreements - right now. 

The U.S. Department of Labor (DOL) recently filed an amicus brief in support of a group of interns who brought a class action suit against the Hearst Corporation.  The plaintiffs worked in unpaid internship posts at a number of the defendant’s magazines, and then alleged that they were entitled to minimum wages and overtime.  They claim that their work earned them the protection under the Fair Labor Standards Act (FLSA).  The DOL points to its Wage and Hours Division (WHD) Fact Sheet #71, which outlines six specific criteria to determine whether or not an intern or trainee is considered a full employee under the law.  The DOL asserted that the six-part test more accurately “captures the economic reality of the relationship,” as it provides more objectivity in its definition of what does or does not constitute an employee, and “ensure[s] that the agency applies a consistent standard across the country.”

In addition to those six criteria, there are other factors to determine the legality of an unpaid internship in the “for-profit” private sector.  When an internship is structured more as an extension of an individual’s educational environment than as an integral part of the employer’s operations, there may be more room to justify an unpaid internship. But once an intern’s responsibility shifts towards filling more productive roles normally handled by salaried employees, compensation may be required.  Similarly, if the employer takes on an intern for a “trial period” in anticipation of possibly hiring the individual as a full employee (essentially treating the internship as an extended job interview), that intern would generally be entitled to the same benefits as an employee under the FLSA.

In an increasingly competitive job market, internships serve as a particularly attractive “foot-in-the-door” for students who want to improve their chances of securing a job once they graduate.  However, as valuable as that experiential learning is, “the hope for a better ‘someday’ should not come at the cost of working without pay today,” according to WHD deputy administrator Laura Fortman.  For this reason, many legal and career service professionals believe that unpaid internships are unfair.  Interns may be unaware of their legal rights under employment law, and thus not know enough to demand fair compensation.  Also, an unfortunate result of the oft-cutthroat race to job placement and success is an uneven playing field.  Says Mikey Franklin, co-founder of the Washington, D.C.–based Fair Pay Campaign: “People who can afford to work for free get ahead.  People who can't afford to work for free fall behind.”  Franklin initiated his grassroots organization last year, and is working to develop it into a national campaign to end unpaid internships.  After all, he quips, one “cannot pay for groceries with college credit.”