Must Suppliers Disclose Trade Secrets on MSDSs/WHMIS Labels?

A supplier develops a new solution for cleaning machine parts. The formula for the solution contains an ingredient that the supplier’s competitors haven’t yet discovered. But the solution is a “controlled product” under WHMIS. Under the WHMIS regulations, suppliers of controlled products are required to list the products’ ingredients on the MSDS and, in some cases, on the supplier label. The supplier has made a sizeable investment to develop the new formula and fears that listing the ingredient on the MSDS and/or the supplier label will compromise its “trade secret.”

QUESTION 1
The supplier can unilaterally decide not to disclose the secret ingredient on the product’s MSDS/label.

True or False?

ANSWER
False.

EXPLANATION
The WHMIS laws balance workers’ right to know what’s in the products they handle with suppliers’ need to protect confidential business information. This scenario illustrates how the balance is struck.

The statement is false because the supplier can’t decide on its own not to disclose the trade secret ingredient on the product’s MSDS/label. But what it can do is apply to a body called the Hazardous Materials Information Review Commission (Commission) for a trade secret exemption to the WHMIS regulations. The exemption would let the supplier refrain from disclosing either the chemical identity or concentration of any ingredient of a controlled product or the name of any toxicological study that identifies any ingredient of a controlled product. The Commission considers four criteria in deciding whether to grant a supplier’s claim for a trade secret exemption:

• The information to be protected must be known only to designated persons;
• The supplier must have taken reasonable care to maintain the confidentiality of that information;
• The information must have economic value to the supplier or its competitors; and
• It must have cost the supplier a significant amount of money and resources to develop the information.

QUESTION 2
If the supplier gets a trade secret exemption, it will never have to disclose the secret ingredient on the MSDS/label.

True or False?

ANSWER
False

EXPLANATION
The answer is false because a trade secret exemption doesn’t last forever. The supplier doesn’t have to disclose the secret ingredient on the controlled product’s MSDS/label while the Commission considers its claim for a trade secret exemption. If the Commission grants the claim, the supplier doesn’t have to disclose the secret ingredient for three years. But once the exemption expires, it will have to disclose the ingredient.

QUESTION 3
Even if the supplier gets a trade secret exemption, it must make a limited disclosure about the secret ingredient.

True or False?

ANSWER
True.

EXPLANATION
The answer is true because under WHMIS requirements, suppliers must make what’s called “a generic disclosure” about ingredients protected by the trade secret exemption. While the Commission assesses the supplier’s claim for a trade secret exemption, the supplier must disclose on the product’s MSDS/label the date on which it filed the exemption claim and the registry number assigned to the claim. If the claim is granted, the supplier must then disclose:

• A statement that an exemption was granted;
• The date the exemption was granted;
• The registry number; and
• The “generic chemical identity of the controlled product or ingredient with as much precision as is consistent with the exemption” [Sec. 16 of the Hazardous Products Act].