Does Montana's Uniform Trade Secrets Act limit or displace our confidentiality / trade-secret clause?
No: the Act expressly preserves contract remedies even though it displaces the overlapping tort law. Montana has adopted the Uniform Trade Secrets Act (§§ 30-14-401 to 409, MCA, “MUTSA”), defining a “trade secret” as information or software that “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 “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (§ 30-14-402(4)). “Misappropriation” covers both improper acquisition and unauthorized disclosure or use by someone who knew the information came from a breach of a duty of secrecy (§ 30-14-402(2)). The term the whole definition turns on is itself defined, and narrowly: “‘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” (§ 30-14-402(1)). Reverse engineering, independent development and anything a competitor could have worked out by proper means are not on that list. MUTSA's displacement section is narrow and reader-friendly: “Except as provided in subsection (2), this part displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret” (§ 30-14-408(1)), BUT subsection (2) carves your contract right straight back out: “This part does not affect…(a) contractual remedies, whether or not based upon misappropriation of a trade secret.” Associated Mgmt. Servs., Inc. v. Ruff confirms Montana courts apply the statutory definitions as written, holding “MUTSA defines actionable ‘misappropriation’ of a trade secret as the ‘disclosure or use…of a trade secret of another without express or implied consent by a person who…used improper means to acquire knowledge of the trade secret.’”
The trap
Your confidentiality clause almost certainly covers MORE than “trade secrets” as MUTSA narrowly defines them: the statute reaches only information with independent economic value from being secret AND subject to reasonable secrecy efforts. For information that does not meet that two-part test (a customer's identity alone, routine business terms, information that is or becomes public), MUTSA's displacement of overlapping tort law is irrelevant because the tort claim was never available in the first place, and your contract's confidentiality obligation is exactly the tool that reaches that broader category, since § 30-14-408(2)(a) leaves contract remedies untouched regardless of whether the leaked information rises to a trade secret at all. MUTSA also preserves criminal remedies and other civil remedies not based on misappropriation (§ 30-14-408(2)(b)-(c)). Where the information IS a trade secret, the statute offers something a contract claim usually will not: § 30-14-404 lets the complainant recover “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 lieu of either “a reasonable royalty for a misappropriator's unauthorized use”, and adds exemplary damages where the misappropriation was willful and malicious. Pleading only breach of the confidentiality clause gives those up. Remember § 30-14-406's separate procedural protection: in any MUTSA action a court “shall preserve the secrecy of an alleged trade secret by reasonable means” (protective orders, in-camera hearings, sealed records), which matters for how you litigate a breach even where MUTSA does apply.
9 authorities
- statuteMont. Code Ann. § 30-14-402enactment date not established
The words that state the rule
"Trade secret" means information or computer software, including a formula, pattern, compilation, program, device, method, technique, or process, that: (a) 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 (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- statuteMont. Code Ann. § 30-14-408enactment date not established
The words that state the rule
Except as provided in subsection (2), this part displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.
- statuteMont. Code Ann. § 30-14-408enactment date not established
The words that state the rule
This part does not affect: (a) contractual remedies, whether or not based upon misappropriation of a trade secret;
The words that state the rule
MUTSA defines actionable "misappropriation" of a trade secret as the "disclosure or use ***166 of a trade secret of another without express or implied consent by a person who ... used improper means to acquire knowledge of the trade secret."
- statuteMont. Code Ann. § 30-14-406enactment date not established
The words that state the rule
In an action under this part, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.
- statuteMont. Code Ann. § 30-14-402enactment date not established
The words that state the rule
"Misappropriation" means: (a) 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 (b) disclosure or use of a trade secret of another without express or implied consent by a person who: (i) used improper means to acquire knowledge of the trade secret; (ii) at the time of disclosure or use, knew or had reason to know that the person's knowledge of the trade secret was: (A) derived from or through a person who had used improper means to acquire it; (B) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (C) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or (iii) before a material change of the person's position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
- statuteMont. Code Ann. § 30-14-408enactment date not established
The words that state the rule
(b) other civil remedies that are not based upon misappropriation of a trade secret; or (c) criminal remedies, whether or not based upon misappropriation of a trade secret.
- statuteMont. Code Ann. § 30-14-402enactment date not established
The words that state the rule
"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.
- statuteMont. Code Ann. § 30-14-404enactment date not established
The words that state the rule
Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation. Damages may include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized use of a trade secret.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.