The New Mexico Uniform Trade Secrets Act (“NMUTSA”; N.M. Stat. Ann. § 57-3A-2), and the federal Defend Trade Secrets Act (“DTSA”; 18 U.S.C. § 1839(3)), both provide legal frameworks for protecting against the misappropriate of trade secrets, differing in scope and application.

The NMUTSA is a state law that governs trade secret misappropriation within New Mexico. It defines a trade secret similarly to the DTSA, requiring that the information derive independent economic value from not being generally known and that reasonable efforts are made to maintain its secrecy. However, remedies under NMUTSA do not include certain federal protections.

Misappropriation occurs when said trade secret information is wrongfully acquired, disclosed or used without permission. One can sue under the DTSA and/or the NMUTSA for misappropriation.

The DTSA, enacted in 2016, provides a federal cause of action for trade secret misappropriation and applies across state lines, allowing cases to be brought in federal court. It offers additional remedies not available under NMUTSA, such as civil seizure to prevent dissemination of stolen trade secrets and enhanced damages for willful or malicious misappropriation. Importantly, the DTSA includes a whistleblower immunity provision that protects individuals from liability when disclosing trade secrets to report a violation of law. Businesses operating in New Mexico should be aware that the DTSA and NMUTSA can be applied concurrently, allowing plaintiffs to seek remedies under both state and federal law. The question of whether to sue in state court or federal court is a separate question, turning on the circumstances and strategy.

In some circumstances, one trying to protect their trade secrets may wish to do so in state court only under the NMUTSA. The cases in New Mexico courts finding misappropriation of trade secrets under the NMUTSA are relatively rare and far and few between. But one example, Rapid Temps Inc. v. Lamon, 144 N.M. 804 (2008), provides an interesting teaching point.

In that case, Rapid Temps Inc. (RTI) was a staffing company based in Albuquerque that provided placement services for medical professionals throughout the United States. It sued its former employee, Lamon, and her new employer, alleging that she misappropriated RTI’s client database. Evidence at trial showed that Lamon had copied dozens of RTI computer files to her home computer with the intent of using it to compete with RTI. After a judgment was entered against Lamon by the trial court, she appealed, arguing that the information had no trade secrets requiring protection. In particular, she argued that the information was of general skills and knowledge, that an employee’s recollection of customer needs, preferences and business habits cannot be considered a trade secret, and that it can be easily ascertained by consulting a directory.

The appellate court ruled in favor of RTI, holding that the database, developed over many years and at significant expense, qualified as a trade secret under the NMUTSA. Lamon’s use of the database went beyond her general skills and knowledge or memory of client relationships or that one could easily obtain by consulting a phone directory. The trial court appropriately determined that there was no evidence showing that RTI’s database was not the product of such time and expense. The appellate court affirmed the trial court’s judgment that the RTI database was trade secret protected information. RTI was awarded injunctive relief and damages, including exemplary (punitive) damages, finding that monetary compensation alone would be inadequate and harm would be irreparable, as well as attorney’s fees.

The intellectual property attorneys at Peacock Law advise both employers and employees regarding the trade secret status of information and the risks of misappropriation thereof. Whether it is to protect your business, or to determine what your risk is as a departing employee, we can guide you each step of the way.