In BCOWW Holdings, LLC v. Collins, SA-17-CA-00379-FB, 2017 WL 3868184 (W.D. Tex. Sept. 5, 2017), the district court denied injunctive relief to the plaintiff who alleged its former employee was using its trade-secret information.  Plaintiff alleged that defendant misappropriated, among other things, its confidential drawings (engineering plans) and pricing information.   The court observed that these are certainly protected by the Texas Uniform Trade Secret Act (TUTSA)—if the information is kept a secret.  Plaintiff argued that it took reasonable efforts to maintain the secrecy of its information by only disclosing it to persons under an implied obligation not to use or disclose it and only on a limited basis.

The court rejected this argument.  Under TUTSA, a company must take affirmative steps to preserve the secrecy of information for it to qualify for trade secret protection.  Reasonable efforts to maintain the secrecy of information may include advising employees of the existence of a trade secret, limiting disclosure on a need-to-know basis, having employees or third parties sign non-disclosure agreements, encrypting data files, and marking files as confidential.  Because plaintiff took none of these steps to protect the secrecy or confidentiality of its information, the Court found that it was not entitled to trade secret protection.

Under the Court’s analysis, an employer must take some steps to preserve the secrecy of its information. What is unclear, however, is how much effort an employer must take to protect the secrecy of its information.  Courts obviously will consider an employer’s efforts on a case-by-case basis to determine if the steps taken to preserve secrecy were reasonable under the circumstances.  Accordingly, if an employer takes at least some affirmative steps to maintain the secrecy of its information, it may be able to protect its information as a trade secret under TUTSA.