The Texas Uniform Trade Secret Act (TUTSA) allows for injunctive relief based on both “actual” and “threatened” disclosure of trade secrets. One the major unresolved issues of TUTSA, though, is the meaning of “threatened” disclosure. The Eastern District of Texas briefly addresses this meaning in AHS Staffing, LLC v. Quest Staffing Grp., Inc., No. 4:18-CV-00402, 2018 WL 3870067 (E.D. Tex. Aug. 15, 2018).
AHS Staffing involves the familiar situation of departing employees allegedly taking and using their former employer’s trade secrets. The court explains that “threatened disclosure” requires a plaintiff to show that disclosure of specific trade secrets would benefit an employee’s new employer. In other words, it must be “probable that the former employee will use the confidential information for his benefit (or his new employer’s benefit) or the detriment of his former employer.” Here, the court reasoned that the two employers were direct competitors and the confidential information in the former employer’s database would be helpful to the new employer. Therefore, the former employer established its case for injunctive relief for threatened misappropriation.
AHS Staffing, though, should not be viewed as establishing the meaning for “threatened disclosure” under TUTSA. Instead, AHS Staffing repeats the common law standard from Conley v. DSC Commc’ns Corp., Cause No. 05-98-01051, 1999 WL 89955 (Tex. App.—Dallas Feb. 24, 1999, no pet.), which states that an employee could be enjoined from using a former employer’s confidential information “when it is probable that the former employee will use the confidential information for his benefit (or his new employer’s benefit) or to the detriment of his former employer.” Also, it should be noted that there was ample evidence in AHS Staffing that the employees had taken and were using their former employers trade secrets. Thus, it is unclear why the court chose to analyze the case under the “threatened” disclosure prong instead of the “actual” disclosure prong.