The Texas Uniform Trade Secret Act (TUTSA) displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret. Recently, the Corpus Christi Court of Appeals issued an opinion in Super Star International interpreting this provision. The Western District of Texas expanded on this opinion in Embarcadero Technologies, Inc. v. Redgate Software, Inc., No. 1:17-CV-444-RP, 2018 WL 315753 (W.D. Tex. Jan. 5, 2018). Like the plaintiff in Super Star International, the plaintiffs in Embarcardero Technologies asserted a breach of fiduciary duty claim that was based on the accessing of confidential and proprietary information. However, the plaintiffs in Embarcardero Technologies made a different argument to avoid preemption by TUTSA, contending that the breach of fiduciary duty claim could be based on the improper taking of confidential information that does not qualify as a trade secret.
The Western District of Texas disagreed. Relying on Super Star International and Uniform Trade Secret Act case law from other jurisdictions, the Court held that “TUTSA’s preemption provision encompasses all claims based on the alleged improper taking of confidential business information.” Narrowing the preemption provision’s application exclusively to information that qualifies as a trade secret under the statute would frustrate the purpose of the statute. Thus, because the plaintiffs’ breach of fiduciary duty claim was based on the misappropriation of confidential information, it was preempted. The Court did note, however, that it could be possible to maintain a breach of fiduciary duty claim and a TUTSA claim if the breach of fiduciary duty claim was based on facts unrelated to the misappropriation of confidential information—such as “continuing to work for an employer for a month after violating an agreement, deletion of potentially incriminating emails, and submission of a false declaration to the court stating that the employee delivered a formal resignation letter.”
The court applied similar reasoning to dismiss plaintiffs’ Texas Harmful Access by Computer Act claim.