Seyfarth continues to be at the forefront of issues involving the Defend Trade Secrets Act (“DTSA”). On March 17, 2017, two Seyfarth attorneys, Andrew Boutros and Alex Meier, published the first-ever in-depth analysis of the intersection between the DTSA and the Racketeer Influenced and Corrupt Organizations Act (“RICO”) in Bloomberg’s White Collar Crime Report.
The article, “An Endangered Claim Reemerges: The Defend Trade Secrets Act Breathes New Life Into Trade-Secrets-Based RICO Claims,” examines how the DTSA, in certain circumstances, may create liability under RICO for the misappropriation of trade secrets. Pre-DTSA, courts were hesitant to impose RICO liability based on trade-secrets misappropriation, because even fraudulent acts with the end goal of misappropriating trade secrets did not present a threat of ongoing criminal activity (“continuity,” in RICO parlance). With the DTSA’s passage, however, the misappropriation, copying, disclosure, and use of trade secrets constitute “predicate acts” that may satisfy RICO’s continuity requirement. The article analyzes two scenarios that may create civil RICO liability: First, a coordinated departure involving multiple employees defecting to join the same competitor; and, second, when a company repeatedly hires key employees in an attempt to acquire its competitors trade secrets.
“An Endangered Claim Reemerges: The Defend Trade Secrets Act Breathes New Life Into Trade-Secrets-Based RICO Claims” is reproduced with permission from White Collar Crime Report, 12 WCR 243, 03/17/2017. Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.