People who design security measures to protect the confidentiality of business information often face a tension between security and ease of use. When employees view a security measure as an annoying obstacle to getting the job done, they often find a work around to avoid the annoyance. This can create a new risk of disclosing the information that the security measure was designed to protect.
Texas Trade Secrets
Author: Patrick Keating (Page 6 of 10)
The Dallas Morning News issued an interesting article last weekend. The article discusses how the Texas Supreme Court has demonstrated an interest in reviewing the extent to which lawyers representing plaintiffs should be permitted to share trade secret information obtained from a defendant in lawsuit discovery with lawyers representing other plaintiffs who may have claims against the same defendant. The article notes that the Texas Supreme Court decided to review three separate appeals involving this issue over the last decade, but all three cases settled before the court could issue a decision.
You can view the article here.
I have worked on multiple theft of trade secrets lawsuits where it is apparent that the plaintiffs never took the time before filing their case to identify their trade secrets. This was not fatal to the plaintiffs’ cases, but it did have ramifications. For example, because the plaintiffs never created an inventory list of their trade secrets, they did not have a precise plan in place to protect the trade secrets from disclosure to competitors. Access to the trade secrets was not strictly limited to those who needed access to perform their jobs. Those employees who did have access had not signed confidentiality agreements specifically tailored to protect the trade secrets. Instead, the plaintiffs relied upon their general business practices, confidentiality clauses in employment agreements and employee handbooks as evidence of the plaintiffs’ reasonable efforts to maintain the secrecy of their trade secrets.
It seems self-evident that it is easier to protect a secret if you know what you are trying to protect. Continue reading
Although it is a good practice for employers to require their employees to sign confidentiality agreements covering trade secrets, failure to do so is not fatal to a theft of trade secrets claim. This is because Texas law places a duty on employees not to use trade secret information acquired during the employment relationship. No written confidentiality contract is required. This duty survives termination of the employment relationship.
Do not assume employees are free to use their employer’s trade secrets just because there is no signed confidentiality agreement.
Here are two cases applying this rule of law: Lamont v. Vaquillas Energy Lopeno, Ltd., 421 S.W.3d 198, 211 (Tex. App.—San Antonio 2013, review denied); Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc., 374 S.W.3d 488, 499 (Tex. App.—Dallas 2012, review denied).
Photograph pursuant to the license located at: https://creativecommons.org/licenses/by/2.0/legalcode
Another saga fit for a television series plot line is playing out in a Texas courthouse. Private investment firm TPG Global, LLC (“TPG”) is based in Fort Worth, Texas. Until the last day of 2014, Adam Levine (“Levine”) was an employee of TPG. Levine was previously a White House deputy press secretary during George W. Bush’s presidency. TPG filed a lawsuit in late January 2015 claiming that Levine attempted to extort millions of dollars from TPG after Levine learned that TPG would not make Levine a partner in the firm.
Patrick Keating
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