# Unum Group v. Loftus: The First Test of DTSA Whistleblower Immunity

> The first court to read the DTSA's whistleblower immunity treated it as an affirmative defense, not a pleading-stage shield, and let the suit proceed.

Topic: Trade Secrets  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/unum-group-v-loftus-dtsa-whistleblower-immunity/


When Congress enacted the Defend Trade Secrets Act of 2016, it bolted onto federal trade-secret law something no prior statute had contained: a whistleblower immunity provision, codified at 18 U.S.C. § 1833(b), that promises an individual "shall not be held criminally or civilly liable under any Federal or State trade secret law" for disclosing a trade secret in confidence to the government or to an attorney solely to report or investigate a suspected violation of law. The provision was meant to reassure employees that reporting corporate wrongdoing would not expose them to a misappropriation suit. Within months, a federal court had to decide how that promise operates in practice, and its answer disappointed the provision's architects.

That decision is *Unum Group v. Loftus*, 220 F. Supp. 3d 143 (D. Mass. 2016), No. 16-cv-40154-TSH, decided December 6, 2016, by Judge Timothy S. Hillman of the United States District Court for the District of Massachusetts. It is the first reported opinion to construe § 1833(b). The court held that whistleblower immunity functions as an affirmative defense, one that can be adjudicated on a motion to dismiss only where the facts establishing it are definitively ascertainable from the complaint, and it let the employer's misappropriation claims go forward while ordering the employee and his counsel to deliver the documents he had taken to the court. The ruling set the early template for how the DTSA's most novel feature would be litigated, and it drew immediate criticism from scholars who helped design the safe harbor.

## At a glance

- **Case:** *Unum Group v. Loftus*, 220 F. Supp. 3d 143 (D. Mass. 2016), No. 16-cv-40154-TSH.
- **Decided:** December 6, 2016, by Judge Timothy S. Hillman (D. Mass.); motion to dismiss denied, preliminary injunction granted ordering the documents delivered to the court.
- **Holding:** DTSA whistleblower immunity under 18 U.S.C. § 1833(b) is an affirmative defense, adjudicable on a motion to dismiss only where the facts establishing it are definitively ascertainable from the complaint and suffice to establish it with certitude; because the record lacked those facts, the misappropriation claims survived.
- **Significance:** The first judicial construction of § 1833(b), placing the practical burden on the employee to develop a factual record supporting immunity rather than treating the statute as an automatic bar.

## The safe harbor Congress built

Trade-secret law had long left would-be whistleblowers in an uncomfortable position. An employee who copied internal documents to hand to a regulator, or to a lawyer while deciding whether to report suspected fraud, risked a misappropriation claim for the very act of gathering evidence. The confidentiality obligations that protect legitimate trade secrets do not, on their face, distinguish theft from disclosure in the public interest.

Section 1833(b) addresses that gap directly. It provides immunity from liability under any federal or state trade-secret law in two circumstances. First, a disclosure "made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney" that is made "solely for the purpose of reporting or investigating a suspected violation of law." Second, a disclosure "made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal." The statute also protects individuals who file retaliation suits from liability for disclosing the employer's trade secrets to their own attorney and using them in the litigation, provided the material is filed under seal and not disclosed except by court order.

Congress paired the immunity with a notice mechanism. Under § 1833(b)(3), employers must give employees notice of the immunity in any contract or agreement governing trade secrets or confidential information, and an employer that fails to do so cannot recover exemplary damages or attorney fees under the DTSA against an employee who did not receive notice. The design reflects a deliberate policy choice: encourage reporting of illegality by removing the trade-secret club that employers could otherwise wield against internal critics.

## The facts and the removal of documents

Timothy P. Loftus began working for Unum, a provider of disability benefits, life insurance, and accident coverage, in 1985, and in 2004 was promoted to Director of Individual Disability Insurance Benefits. On September 21, 2016, Unum's in-house counsel interviewed Loftus as part of an internal investigation into claims practices. Days later, Loftus made a series of after-hours trips to Unum's Worcester facility. Surveillance video captured him leaving on a Sunday afternoon with two boxes and a briefcase, returning on a weeknight around 7:45pm and exiting an hour later with a shopping bag full of documents, and departing days after that with his company laptop and another full shopping bag. Loftus returned the laptop to Unum on October 24, 2016, after both sides agreed its contents would be preserved. The documents he never returned, and his counsel made copies of those in counsel's possession.

Unum sued under the DTSA, 18 U.S.C. § 1836, along with state-law theories including conversion, and moved for a preliminary injunction requiring return of the materials. Loftus moved to dismiss, invoking § 1833(b). Through counsel he represented that the documents concerned potential regulatory violations and governmental inquiries into Unum's practices, and he argued that his removal of them was therefore immunized as a matter of law. The immunity question thus arrived at the earliest possible moment in the litigation, on a motion to dismiss, before any discovery into what Loftus actually did with the documents or why.

## Why the court refused to dismiss

Judge Hillman declined to treat § 1833(b) as a pleading-stage bar. The court characterized whistleblower immunity as an affirmative defense, and applied the First Circuit's standard from *Rodi v. Southern New England School of Law*, 389 F.3d 5, 12 (1st Cir. 2004): "a properly raised affirmative defense can be adjudicated on a motion to dismiss so long as (i) the facts establishing the defense are definitively ascertainable from the complaint and the other allowable sources of information, and (ii) those facts suffice to establish the affirmative defense with certitude." That framing matters. The court did not say immunity can never be decided on the pleadings. It said the facts supporting immunity have to be apparent with certitude from the complaint, and here they were not.

The court found that the statutory elements were not established on the pleadings. Section 1833(b) protects a disclosure made "solely for the purpose of reporting or investigating a suspected violation of law," and made to a government official or to an attorney. In the court's words, "the record lacks facts to support or reject his affirmative defense at this stage of litigation." There had been no discovery into the significance of the documents taken or their contents, and it was "not ascertainable from the complaint whether Loftus turned over all of Unum's documents to his attorney, which documents he took and what information they contained, or whether he used, is using, or plans to use, those documents for any purpose other than investigating a potential violation of law." The court also noted that Loftus "has not filed any potential lawsuit that could be supported by information in those documents," which undercut the inference that his motive in removing them was to pursue a legal claim about the employer's conduct. Taking the complaint's allegations as true, the court found a plausible misappropriation claim and declined to dismiss Counts I and II.

The preliminary injunction rested on separate footing. The court expressly declined to address the likelihood of success on the trade-secret claims, holding that Unum's conversion claim alone was sufficient to warrant the relief sought. It then ordered Loftus, his attorney, or anyone acting on his behalf to deliver the documents taken from Unum to the court, ordered them to destroy their copies and make no further ones, barred delivery to any third party without the court's express permission, and required an affidavit under the pains and penalties of perjury setting out whether the documents had been given to anyone else. The documents went to the court's custody rather than straight back to Unum: only after an index was prepared and filed under seal could Unum move to have them returned.

The upshot is a burden-of-proof allocation. By labeling immunity an affirmative defense, the court placed on the employee the practical task of developing evidence that his disclosure fit the safe harbor. The employer needed only to plead a plausible misappropriation claim to get past the motion to dismiss; the employee could not short-circuit the case by pointing to the statute alone.

## The scholarly pushback

The ruling drew a sharp response from Professor Peter Menell of Berkeley Law, a principal drafter of the immunity concept. In commentary published on the CLS Blue Sky Blog and in an accompanying paper, Menell argued that the court misconstrued the provision by treating it as a defense the employee must prove rather than a shield that neutralizes liability. In his view, forcing whistleblowers to litigate through discovery to vindicate immunity recreates the very chilling effect Congress sought to eliminate. The cost and career risk of defending a misappropriation suit, he contended, deter reporting regardless of who ultimately prevails, so a rule that lets such suits proceed past the pleadings undermines the statute's purpose. He urged that employers should bear the burden of proving an improper disclosure, and that courts should be prepared to resolve clear immunity cases early.

The criticism identifies a genuine tension in the statute's text. Section 1833(b) is phrased as immunity, which sounds like a bar to liability, yet its elements (purpose, recipient, confidentiality) are fact-intensive and often disputed. Whether such a provision behaves like jurisdictional immunity that ends a case at the threshold, or like an ordinary affirmative defense proven with evidence, is not spelled out. *Loftus* chose the latter reading, and its choice has framed the debate ever since.

## Open questions

*Loftus* answered less than it raised. Its *Rodi* framing leaves open the possibility that an employee wins dismissal where the complaint itself establishes with certitude that the disclosure went only to counsel for a reporting purpose, but the court had no occasion to say what such a complaint would look like. It did not address the summary-judgment standard for immunity, where a developed record might resolve the purpose and recipient questions without trial. It left open how courts should treat an employee who retains copies for personal use alongside disclosures to counsel, a common fact pattern that may defeat the "solely for the purpose of reporting" element. And because the decision predates most of the case law now interpreting § 1833(b), whether other courts would follow its affirmative-defense framing or adopt Menell's burden-shifting approach remained unsettled as the doctrine developed. As of July 2026, the affirmative-defense characterization has proven influential, but the boundary between pleading-stage and evidence-stage resolution continues to be worked out case by case.

## Implications for employers and employees

- **Immunity is real but rarely automatic at the pleadings.** An employee relying on § 1833(b) should expect to prove, not merely assert, that a disclosure went in confidence to counsel or the government solely to report suspected illegality. Contemporaneous documentation of who received the material and why is the difference between an early exit and a full case.
- **Purpose and channel are everything.** The safe harbor is narrow. Taking documents "in case they are useful," keeping personal copies, or routing them anywhere other than an attorney or a government official can push a disclosure outside the statute. Employees who suspect wrongdoing are safest reporting through counsel or a regulator and filing any court submission under seal.
- **Employers must give the § 1833(b)(3) notice.** Failing to include the immunity notice in confidentiality agreements forfeits exemplary damages and attorney fees under the DTSA against employees who did not receive it. Reviewing template agreements is a low-cost compliance step with real downside if skipped.
- **Filing an underlying claim strengthens the immunity story.** The *Loftus* court held it against the employee that he had brought no whistleblower or retaliation suit. An employee whose document handling is tied to an actual reporting or litigation posture presents a far more coherent immunity defense than one who merely removed materials.

## Frequently asked questions

**What is DTSA whistleblower immunity?** Under 18 U.S.C. § 1833(b), an individual cannot be held liable under any federal or state trade-secret law for disclosing a trade secret in confidence to a government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

**Why did the immunity defense fail in Unum Group v. Loftus?** The court treated § 1833(b) as an affirmative defense rather than a pleading-stage bar. Under the First Circuit's *Rodi* standard, such a defense supports dismissal only where the facts establishing it are definitively ascertainable from the complaint. Because Loftus had filed no lawsuit and the complaint did not establish that he took the documents solely to report a suspected violation, the record could not support or reject the defense at that stage.

**Does Loftus mean whistleblowers are unprotected under the DTSA?** No. It means immunity ordinarily must be proven with evidence rather than assumed from the pleadings. An employee who documents that a disclosure went only to counsel or a government official, solely to report suspected illegality, can still establish immunity, but may have to litigate to do so.

## Authorities and sources

- [*Unum Group v. Loftus*, No. 16-cv-40154 (D. Mass. Dec. 6, 2016), opinion via GovInfo](https://www.govinfo.gov/app/details/USCOURTS-mad-4_16-cv-40154)
- [18 U.S.C. § 1833 (immunity provision), Cornell Legal Information Institute](https://www.law.cornell.edu/uscode/text/18/1833)
- [18 U.S.C. § 1836 (DTSA civil remedies), Cornell Legal Information Institute](https://www.law.cornell.edu/uscode/text/18/1836)
- [Seyfarth Shaw, "Federal Court Rejects DTSA Whistleblower Immunity Defense on a Motion to Dismiss," Trading Secrets blog](https://www.tradesecretslaw.com/2016/12/articles/dtsa/federal-court-rejects-defend-trade-secrets-act-whistleblower-immunity-defense-on-a-motion-to-dismiss-and-orders-employee-to-return-stolen-trade-secrets/)
- [Peter S. Menell, "Misconstruing Whistleblower Immunity Under the Defend Trade Secrets Act," CLS Blue Sky Blog](https://clsbluesky.law.columbia.edu/2017/01/03/misconstruing-whistleblower-immunity-under-the-defend-trade-secrets-act/)
- [Peter S. Menell, "Misconstruing Whistleblower Immunity Under the Defend Trade Secrets Act" (SSRN paper)](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2893181)
- [Alto Litigation, "Evolving Whistleblower Immunity Under the Defend Trade Secrets Act of 2016"](https://www.altolit.com/blog/whistleblower-immunity)
- [*Unum Group v. Loftus*, Memorandum and Order (Docket No. 16), full slip opinion PDF via GovInfo](https://www.govinfo.gov/content/pkg/USCOURTS-mad-4_16-cv-40154/pdf/USCOURTS-mad-4_16-cv-40154-0.pdf)