Recent changes in two Florida statutes exempt financial information that is a trade secret from mandatory disclosure under Florida’s otherwise broad Sunshine Laws. Florida has amended statute § 812.081, Florida’s criminal trade secret act, to expressly include “financial information” among the examples of trade secrets. Citing to such new definition, Florida also amended several other statutes resulting in the exemption of financial information from mandatory disclosure under the Florida Sunshine Laws.
The broadening of the public disclosure exclusion was the result of lobbying from private companies involved in “P3s” – public, private partnerships. In a P3 arrangement, a private company bids to provide goods or services to an agency of the Florida government. The agency will often require the bidder to submit financial information that could be both confidential and very damaging to the bidder in the hands of the bidder’s competitors. The legislation stands for the proposition that government transparency under the Sunshine Laws should not cost a private company its trade secrets.
The implications of the amendments extend beyond the P3 context. Even though the Florida legislature did not make corresponding changes to the definition of “trade secrets” in Florida’s Uniform Trade Secret Act, Sec. 688.001, et seq., Fla. Stat. (the “UTSA”), it is reasonable to assume that financial information could constitute a trade secret under the UTSA, given the legislature’s inclination to protect such information. A possible counter-argument, however, is that financial information is not protected under the civil UTSA since financial information is not included in the definition of “trade secret” whereas it is expressly included in the criminal statute that is incorporated into the Sunshine Laws.
The impact of these changes could be blunted somewhat by the Florida legislature’s failure to clearly define “financial information,” thus leaving a potential interpretation question for the courts. After all, in many cases, a company’s financial information will include some information that is within the public domain and thus not likely to qualify as a trade secret. Also, it should be noted that “financial information” is not always going to be a trade secret, even if it is confidential; the information still has to meet the specific criteria set out in Sec 812.081to have “trade secret” status.
There are four key takeaways:
For companies doing business in Florida, consider expressly including “financial information” in any contractual definition of “trade secrets” or “confidential information.”
Other states, particularly those that are actively promoting P3s, might find Florida’s recent approach to balancing the competing interests of trade secret holders and public transparency instructive.
Despite the recent changes in Florida law, financial information will not constitute a “trade secret” if the multi-part test of Section 812.081 Florida Stat. is not met.
In the civil context, financial information may still not be included in the UTSA definition of a trade secret except to the extent that it otherwise meets the definition of a trade secret.