Many defendants facing a theft of trade secrets claim in Texas are about to lose one of the tools in their toolbox. Over the last two years, it has become an increasingly common defense strategy at the outset of a case to file a motion to dismiss under the Texas Citizens Participation Act (the “TCPA”).
The TCPA is often called the Texas SLAPP statute. SLAPP stands for Strategic Lawsuits Against Public Participation. The statute was designed to prevent the use of lawsuits as a punitive tool to deter people from exercising their First Amendment rights to freedom of speech, freedom of association or the right to petition the government. The TCPA provides a defendant who is sued for exercising any of those rights the ability to file a motion to dismiss the lawsuit at the beginning of the case. Without the statute, the defendant would typically have to wait until much later in the life of the case to obtain a ruling on a motion for summary judgment.
Over the last two years, a growing number of Texas courts held that the TCPA can apply to a plaintiff’s claim for theft of trade secrets. This is about to come to an end in the most common types of trade secret cases.
On September 1, 2019, an amendment to the TCPA will become effective. That amendment changes the statute to exclude from the TCPA’s scope theft of trade secrets lawsuits arising from an officer-director, employee-employer or independent contractor relationship. Those are the majority of theft of trade secret cases.
Trade secrets are more often stolen by business insiders. These insiders could be officers of the company, directors, employees or independent contractors. Although it happens, it is a more unusual scenario for someone outside of the business to break in to steal trade secrets. Starting September 1, 2019, in the most common theft of trade secret cases – even if the cases involve defendants exercising First Amendment rights – the defendant will have to defend the lawsuit the old-fashioned way. There will be no early TCPA motion to dismiss option.
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