For years, it was not uncommon for misappropriation of trade secrets claims to be accompanied by a variety of other common law causes of action such as breach of fiduciary, fraud, and conspiracy. The Texas Uniform Trade Secrets Act (TUTSA), however, states that it “displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.” Generally, this provision means that all common law or non-contractual claims based on “the alleged improper taking of trade secret and confidential business information” are preempted. Some cases, though, hold that TUTSA “does not preempt causes of action stemming from the misappropriation of confidential information that is not a trade secret.” The Eastern District of Texas explored this split in the case law in BKL Holdings, Inc. v. Globe Life Inc., No. 4:22-CV-00170, 2023 WL 2432012 (E.D. Tex. Mar. 9, 2023). Continue Reading Eastern District of Texas Explores TUTSA’s Preemption Provision
In the case of Scientific Machine & Welding, Inc. v. Rose, No. 03-20-00564-CV, 2022 WL 850409 (Tex. App.—Austin Mar. 23, 2022, no pet.), the Texas Court of Appeals determined (1) if the steps taken by the plaintiff amounted to a “reasonable measure” of keeping the relative information a trade secret, (2) whether Scientific came forth with legally sufficient evidence to support claims of breach of fiduciary duty and breach of contract, (3), whether Scientific’s claim of a “breach of implied contract of confidentiality” existed under Texas Law. Continue Reading Texas Court of Appeal Evaluates What Actions Constitute “Reasonable Measures” to Keep a Trade Secret
For the last few years, defendants in trade secrets and other commercial litigation claims have used the previous version of Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) as a defense to those claims. Langley v. Insgroup, Inc., No. 14-19-00127-CV, 2020 WL 1679625 (Tex. App.–Houston [14th Dist.] Apr. 7, 2020, no pet. h.) is another example of this strategy. In Langley, an insurance salesman left his employer to work for a competitor. The former employer accused the salesman of violating his non-compete agreement, tortious interference with the employer’s contracted clients, breach of fiduciary duty, and violation of the Texas Uniform Trade Secret Act. The new employer was also a defendant to several of those causes of action.
Continue Reading TCPA’s Commercial Speech Exemption Applies to Employer’s Claims Against Former Employee
Beginning with the Texas Supreme Court decisions in Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015) and ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) and continuing with the Austin Court of Appeals 2017 decision in Elite Auto Body LLC, d/b/a Precision Auto Body v. Autocraft Bodywerks, Inc., Texas courts had taken the position that Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) had almost unlimited application to commercial litigation cases such as those involving misappropriation of trade secrets. Beginning in 2019, though, certain courts of appeal have begun to reject or limit those holdings.
Continue Reading Dallas Court of Appeals Continues its Efforts to Restrict the Application of the TCPA
Through most of 2019, the Dallas Court of Appeals has refused to apply the Texas Citizens Participation Act (TCPA) to commercial litigation claims. Goldberg v. EMR (USA Holdings) Inc., No. 05-18-00261-CV, 2019 WL 3955771 (Tex. App.–Dallas Aug. 22, 2019, no pet. h.) reverses that trend in part. Goldberg is too complex of a case to summarize here. Therefore, I’ll just hit the highlights:
Continue Reading Dallas Court of Appeals Explores the TCPA in Complex New Decision
Most cases that have evaluated the Texas Citizens Participation Act (TCPA) have focused on whether the TCPA applied to the claims. This isn’t the issue in Neurodiagnostic Consultants, LLC v. v. Nallia, No. 03-18-00609-CV, 2019 WL 4231232 (Tex. App.—Austin Sept. 6, 2019, no pet. h.). Instead, Nalia focuses on whether the non-movant offered sufficient proof to defeat a TCPA motion to dismiss.
Continue Reading Austin Court of Appeals Issues Opinion on the TCPA and Conspiracy
Damages for misappropriation of trade secrets are generally understood as (1) lost profits, (2) defendant’s profits, or (3) a reasonable royalty. These are damages traditionally sought against a competitor. But that does not mean that a departing employee who takes trade secrets to a competitor is immune from a damage award.
Continue Reading Another Reason Employees Should Think Twice Before Taking Their Employer’s Trade Secrets
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).
Continue Reading Western District of Texas Issues Opinion Interpreting TUTSA Preemption Provision
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. In Super Starr International, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829 (Tex. App.—Corpus Christi July 20, 2017, no pet.), the Corpus Christi Court of Appeals offered perhaps the first interpretation of the section.
Continue Reading Corpus Christi Court Issues Opinion Interpreting Preemption Provision of the Texas Uniform Trade Secret Act