Can a Workforce IP Training Program Limit Liability Under the Uniform Trade Secrets Act?

When a lower-level employee uses a former employer's trade secrets after taking a new job, the plaintiff often sues the new employer itself and demands exemplary damages under the Uniform Trade Secrets Act ('UTSA') — even if the new employer was unaware of, and disapproves of, the employee's conduct. Taking a page from the law of employment discrimination, we believe that companies that provide intellectual property training for their workforce can use the fact of such training during litigation to avoid exemplary damages for the solitary wrongdoing of non-executive-level employees and perhaps avoid vicarious liability altogether. Companies, especially technology startups, can reduce trade secret litigation and liability risks by implementing such programs — programs which today are very rare, even in Silicon Valley.