Protection of Employer Trade Secrets, Even in the Absence of an Enforceable Confidentiality or Non-Disclosure Agreement

Protection of Employer Trade Secrets, Even in the Absence of an Enforceable Confidentiality or Non-Disclosure Agreement

by Erick Escamilla

Texas law can protect from unauthorized use or disclosure an employer’s trade secrets, even in the absence of a confidentiality or non-disclosure agreement. Generally, Texas courts recognize as a trade secret any formula, pattern, device or compilation of information which is used in one’s business and presents an opportunity to obtain an advantage over competitors who do not know or use it. Customer lists, pricing information, client information, customer preferences, buyer contacts, and market strategies have repeatedly been held to be protectable trade secrets. Texas courts also recognize a common law duty, created at the formation of an employment relationship, which can prohibit an employee from using in a manner adverse to his or her employer confidential or proprietary information acquired during that employment relationship. This common law duty has been held to be ongoing, and to survive termination of the employment relationship.

As such, even in the absence of an enforceable confidentiality or nondisclosure agreement, a former employee may be prohibited from using, for his or her own advantage and to the detriment of his former employer, confidential information or trade secrets acquired by or imparted during the course of the employment relationship.

No information in this article is intended to constitute legal advice. For specific legal advice, please contact an attorney.

If you have any questions or would like more information about trade secrets in the employment context, please contact Melissa Nicholson Sternfels at 713.220.9185 or msternfels@hirschwest.com.