Six Ways to Make a Trade Secrets Claim in Texas

May 13, 2016 / By Robert Wood

As an employer, your trade secrets are the heart of your business.  Knowing every manner available to protect those trade secrets could make a big difference in future of your business.  A claim for misappropriation of trade secrets is one way an employer can protect its interests.

Under Texas law, a misappropriation of trade secrets claim not only can be made for the improper acquisition of trade secrets, but it can also be made for unauthorized use in general.

Section 134A of the Texas Civil Practices and Remedies Code defines misappropriation as follows:

(3) “Misappropriation” means:

From the plain reading of the statute, the use of the disjunctive “or” demonstrates that there are six different ways to make a trade secrets misappropriation claim.  These six misappropriation definitions can be separated into three categories based on how the trade secret is acquired.  The first, and most predominate, involves the acquiring of trade secrets by improper means.  This category includes the definitions contained within (3)(A), (3)(B)(i), and (3)(B)(ii)(a).  Each of these involve some type of issue with the manner in which the trade secrets were actually acquired.

The second category of misappropriation deals with the acquisition of the trade secret by mistake or accident.  Under (3)(B)(iii), it is considered misappropriation if the trade secret was acquired by accident or mistake, the person had reason to know that it was a trade secret, and the person used or disclosed the trade secret without consent.

The third category involves misappropriation stemming from the proper and even invited acquisition of trade secrets.  This category contains those definitions within (3)(B)(ii)(b) and (3)(B)(ii)(c).  This category includes claims that arise often in the employment context.  In the context of their employment, employees often receive varying degrees of confidential and propriety information from their employers.  While it is always wise for employers to protect this information through covenants not to compete, non-solicitation agreements, and non-disclosure agreements, this third category provides some degree of protection against the misuse of an employer’s trade secrets by an employee or ex-employee.

Thus, even if an employer’s employees have not signed non-compete or nondisclosure agreements, an employer has various ways under the Texas trade secrets statute to protect itself.

At Lindquist Wood Edwards, LLP, our attorneys have years of experience protecting employers’ confidential information and trade secrets.    Whether or not you have a non-compete or nondisclosure agreement in place, we will use all avenues available to protect your interests.  Our attorneys can also advise and assist you in drafting non-compete and nondisclosure agreements that will better protect you should any employee ever use your confidential information outside of his employment.

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About the Author

Robert Wood has been a Texas trial lawyer since 1993. During that time, he has represented small, mid-sized, and Fortune 100 companies in business and employment litigation matters all over Texas and the United States. He has also advised and represented hundreds of individuals in employment litigation matters. Read more about Robert Wood