Minnesota's Trade Secrets Act protects secret information, not what you learned how to do — and the element employers most often fail is one of their own

Two elements, and one of them is the employer’s

Minnesota’s Uniform Trade Secrets Act is Minn. Stat. §§ 325C.01 to 325C.07 — § 325C.08 supplies the short title. It was not touched by the 2023 noncompete ban, and it does not require you to have signed anything. What it requires is a trade secret, and § 325C.01, subd. 5 defines that in full:

“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The existence of a trade secret is not negated merely because an employee or other person has acquired the trade secret without express or specific notice that it is a trade secret if, under all the circumstances, the employee or other person knows or has reason to know that the owner intends or expects the secrecy of the type of information comprising the trade secret to be maintained.

Read the two clauses as separate hurdles, because they are. Clause (i) is about the information: valuable because others do not have it, and neither generally known nor readily ascertainable by proper means. Clause (ii) is about the employer’s own conduct before the dispute existed. The closing sentence is the employer’s counterweight — the absence of a “CONFIDENTIAL” stamp does not by itself defeat the claim where the person knew or had reason to know secrecy was expected.

What the supreme court held the Act will not reach

Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890 (Minn. 1983), is the Minnesota Supreme Court’s leading application of the Act to departing employees, and it reversed a judgment for the employer. A motor manufacturer sued a former national sales manager, four other employees who left with him, and the company they formed. The employees had signed confidentiality agreements. None of the agreements contained a noncompetition clause. Id. at 895.

The court began by refusing to let the Act do general work: without a proven trade secret, “this court would come dangerously close to expanding the trade secrets act into a catchall for industrial torts.” Id. at 897. It then drew the line an employee needs to know about, at 900:

This is not to suggest that ECC could make out a claim for trade secret status for the entire class of ECC moving coil motors, or even for the ECC 1125 in general. If a new customer devised an application for the ECC 1125 and CMI modified its 440 motor to meet those new specifications, ECC could not object. In that case ECC would be trying to protect, not a specific combination of features, but the design process of trial and error, (including the talent of ECC’s employees), by which those features are adapted to a given use. The law of trade secrets will not protect talent or expertise, only secret information.

The court was explicit that employee mobility was one of the interests it was weighing. In footnote 11, at 900, it acknowledged that by allowing possible protection for the features of the motor at issue it risked “stifling the ability of employees to leave their employment and compete with their former employers (in the absence of a valid non-competition agreement) using ‘state of the art’ knowledge,” and in the next paragraph of the same footnote it listed the factors it thought would mitigate that danger — among them “the courts’ duty to fashion a remedy which will balance employers’ rights to protect secrets with employees’ rights to compete using ‘state of the art’ knowledge.”

The element on which the employer’s case usually turns

The second clause of subdivision 5 is the employer’s burden, and in Electro-Craft it decided the case. At 901 the court wrote: “(c) Reasonable efforts to maintain secrecy. It is this element upon which ECC’s claim founders.” The district court had found that the employer “showed an intention to keep its data and processes secret” despite having no “meaningful security provisions,” and the supreme court held that finding beside the point — the statute asks for “efforts that are reasonable under the circumstances,” and “even under the common law, more than an ‘intention’ was required — the plaintiff was required to show that it had manifested that intention by making some effort to keep the information secret.” Electro-Craft, 332 N.W.2d at 901.

What followed is a catalogue of things that were not enough. Screening the company handbook and publications for confidential information and requiring some employees to sign a confidentiality agreement were “minimal precautions” and “were not enough.” Id. at 901–02. A 1977 memorandum from the company president restricting laboratory tours failed because “[t]here was no showing that [it] had ever been enforced,” and the signed confidentiality agreements failed because they “were too vague to apprise the employees of specific ‘secrets.’” Id. at 903. Exit interviews conducted ten days before the litigation began were “little more than attempts to intimidate or threaten employees, to prevent them from leaving ECC and engaging in legitimate competition using their skill and expertise,” and did not “qualify as ongoing efforts to maintain the secrecy of specific information.” Id. The court’s summary, on the same page: “ECC has not met its burden of proof in establishing the existence of any trade secrets. The evidence does not show that ECC was ever consistent in treating the information here as secret.”

The same failure took down the relationship half of the claim. At 903 — after saying that “[s]ince no trade secrets existed to be misappropriated, we technically need not reach the issue of whether misappropriation occurred,” and that it discussed the tort anyway because the two concepts “are so interrelated” — the court said the employer’s failure to make reasonable efforts “was fatal to its claim of a confidential relationship,” because “[t]he employees were never put on notice of any duty of confidentiality,” and that the agreements’ “vague language prohibiting the employee from taking ‘secrets’ did not create a duty of confidentiality in the employee, and no misappropriation occurred.”

No case-law search was run for this page. CourtListener’s daily quota was exhausted on September 8, 2026, and Electro-Craft was read in full from the Caselaw Access Project’s archive of 332 N.W.2d. Whether any later Minnesota decision has narrowed or distinguished it is [UNVERIFIED] here; no citator was consulted, and none of the propositions above is represented as current beyond what the 1983 opinion itself says.

Misappropriation, and “improper means”

Section 325C.01, subd. 3, defines misappropriation in two branches — acquisition, and disclosure or use:

“Misappropriation” means:

(i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret; or

(B) at the time of disclosure or use, knew or had reason to know that the discloser’s or user’s knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it;

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or . . . .

Subdivision 2 defines the operative phrase: “‘Improper means’ includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” The subdivision introduces its list with “includes” rather than “means,” and states no exclusions. The federal definition does, and the contrast is worth knowing: 18 U.S.C. § 1839(6)(B) provides that improper means “does not include reverse engineering, independent derivation, or any other lawful means of acquisition.” The Minnesota statute has no counterpart sentence.

Branch (ii)(B)(II) is the clause that does the work in most departing-employee cases: it does not require that you acquired the information improperly at all. It requires that you knew or had reason to know your knowledge of it was acquired “under circumstances giving rise to a duty to maintain its secrecy or limit its use.” Whether such circumstances existed is exactly what Electro-Craft held the employer had failed to prove on that record.

What follows a claim: the machinery, not the advice

Section 325C.02 is the reason these cases move quickly. “Actual or threatened misappropriation may be enjoined” — threatened, not only completed. An injunction “shall be terminated when the trade secret has ceased to exist,” but may be continued “for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation,” and paragraph (c) allows a court to compel “affirmative acts to protect a trade secret.” Paragraph (b) permits, “[i]n exceptional circumstances,” an injunction conditioning future use on a reasonable royalty.

Section 325C.03 sets the money. Paragraph (a) allows “both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss,” or in the alternative a reasonable royalty. Paragraph (b) is the multiplier, and it is quoted here in full because it is short and frequently misdescribed:

If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award made under paragraph (a).

Twice the compensatory award, at the court’s discretion, and only on willful and malicious misappropriation. Not treble; not automatic.

Section 325C.04 is one sentence and it points both ways:

If (i) a claim of misappropriation is made in bad faith, (ii) a motion to terminate an injunction is made or resisted in bad faith, or (iii) willful and malicious misappropriation exists, the court may award reasonable attorney’s fees to the prevailing party.

Clause (i) is the employee-side clause: a claim brought in bad faith exposes the employer that brought it. Clause (iii) runs the other way. All three are discretionary.

Section 325C.05 requires the court to “preserve the secrecy of an alleged trade secret by reasonable means,” listing protective orders, in-camera hearings, sealing, and orders not to disclose. Section 325C.06 supplies the deadline — three years “after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered,” with “a continuing misappropriation constitut[ing] a single claim.” That row also appears in the deadline table, and it is the one deadline on that page that belongs to a claim an employer brings against you.

Section 325C.07 decides what other theories survive. Paragraph (a) provides that the Act displaces “conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.” Paragraph (b) preserves three things: “contractual remedies, whether or not based upon misappropriation of a trade secret”; “other civil remedies that are not based upon misappropriation of a trade secret”; and “criminal remedies, whether or not based upon misappropriation of a trade secret.” An employer’s breach-of-contract claim on the confidentiality agreement you signed is not displaced, and it is tested on the agreement’s own terms rather than on whether the information was a trade secret.

The federal statute adds a second layer

The Defend Trade Secrets Act does not replace chapter 325C; it adds a federal claim alongside it. 18 U.S.C. § 1836(b)(1) allows an owner of a misappropriated trade secret to sue “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce,” and § 1836(c) gives the federal district courts original jurisdiction.

Three of its provisions matter to a departing employee. Section 1836(b)(3)(A)(i)(I) limits the injunction a federal court may enter: the order must not “prevent a person from entering into an employment relationship,” and “conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows.” Subclause (II) adds that the order must not “otherwise conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business.” Section 1836(b)(3)(C) allows exemplary damages “in an amount not more than 2 times the amount of the damages awarded under subparagraph (B)” for willful and malicious misappropriation — the same multiplier as § 325C.03(b) — and § 1836(b)(3)(D) tracks § 325C.04 on fees. Section 1836(d) sets the same three-year period as § 325C.06.

The immunity that belongs to the employee

18 U.S.C. § 1833(b) is the provision an employee-facing page exists to point at, because it is rarely quoted and it is quoted here in full:

(1) Immunity.—An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—

(A) is made—

(i) 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.

Paragraph (2) covers the retaliation plaintiff: an individual who sues for retaliation “for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding,” provided the individual “files any document containing the trade secret under seal” and “does not disclose the trade secret, except pursuant to court order.”

The conditions inside those sentences are doing work. Disclosure to a government official must be “in confidence” and “solely for the purpose of reporting or investigating a suspected violation of law.” A court filing must be “under seal.” Paragraph (5) forecloses reading the immunity as a general license: “nothing in this subsection shall be construed to authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.” Immunity for disclosing is not immunity for how the material was obtained.

Paragraph (3) puts a duty on the employer and a penalty on the employer that ignores it. Subparagraph (A): “An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.” Subparagraph (B) allows compliance by cross-reference to a policy document. Subparagraph (C) supplies the consequence:

If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.

Subparagraph (D) limits the notice duty to “contracts and agreements that are entered into or updated after the date of enactment of this subsection” — May 11, 2016, per the Cornell note recording the date of enactment of Pub. L. 114–153. And “employee” for this purpose “includes any individual performing work as a contractor or consultant for an employer.” § 1833(b)(4).

Two boundaries on that immunity are worth stating as boundaries. It reaches liability “under any Federal or State trade secret law.” It does not by its terms reach a breach-of-contract claim, and § 325C.07(b)(1) preserves contractual remedies. It also does not by its terms reach the criminal remedies § 325C.07(b)(3) preserves, though § 1833(a) separately provides that chapter 90 of title 18 “does not prohibit or create a private right of action for” a disclosure made in accordance with subsection (b).

Where § 181.988 sits in this

Minnesota made employment noncompetes void for agreements entered into on or after July 1, 2023, and the same subdivision that defines the ban writes trade-secret protection out of it. Minn. Stat. § 181.988, subd. 1(a), closes:

A covenant not to compete does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information. A covenant not to compete does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.

Subdivision 2(c) adds that “[n]othing in this subdivision shall be construed to render void or unenforceable any other provisions in a contract or agreement containing a void or unenforceable covenant not to compete.” So the ban removes one clause and leaves the confidentiality clause, the nonsolicit, and chapter 325C exactly where they were. What limits those is worked through in the NDA and nonsolicit guide; the ban itself is in its own guide.

Currency, and what this page does not do

The revisor’s History lines were read on every section cited: § 325C.01, “1980 c 594 s 3; 1985 c 196 s 1; 1986 c 444”; § 325C.02, “1980 c 594 s 4; 1987 c 1 s 1”; § 325C.03, “1980 c 594 s 5; 1987 c 1 s 2”; § 325C.04, “1980 c 594 s 6”; § 325C.05, “1980 c 594 s 7”; § 325C.06, “1980 c 594 s 8”; § 325C.07, “1980 c 594 s 9; 1987 c 1 s 3”; § 325C.08, “1980 c 594 s 10”; and § 181.988, “2023 c 53 art 6 s 1.” The revisor’s table of Minnesota Statutes affected by the 2026 Regular Session was queried one exact section at a time for each of them. Every section of chapter 325C returned “No Records Found”; § 181.988 returned one record, its 2023 enactment. No 2026 session law touches any section on this page. The federal sections were retrieved from Cornell’s Legal Information Institute on September 8, 2026; § 1836, § 1839, and § 1833 each carry a 2016 amendment credit to Pub. L. 114–153 and nothing later.

This page describes the machinery. Whether a particular file, list, drawing, or database is a trade secret is a question about that information and about what the employer did with it before you left, and answering it for your documents is not what this page does.