Texas Trade Secrets

Category: Secrecy (Page 1 of 2)

Confidentiality Restrictions and Customer Relationships

A lawsuit that I worked on last year involved an interesting issue.  May a business plaintiff use a confidentiality agreement to prevent its former salesperson from continuing business relationships with the plaintiff’s customers?  Yes, an employer can use a properly crafted non-competition agreement to achieve this goal.  But if there is no such agreement, can a plaintiff achieve the same end by relying upon a confidentiality agreement? Continue reading

When Security Backfires

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.

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Employees Don’t Have to Sign Confidentiality Agreements

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

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