Trade Secrets & Non-Compete Litigation

The unauthorized use or disclosure of confidential information—including proprietary formulas, customer lists, pricing data, or business strategies—can give rise to claims under the Texas Uniform Trade Secrets Act (TUTSA) and the federal Defend Trade Secrets Act (DTSA). Courts may award injunctive relief, actual damages, unjust enrichment, and in cases of willful and malicious misappropriation, exemplary damages and attorney’s fees. To obtain protection, the owner of the trade secret must have taken reasonable measures to maintain its secrecy.

When an employee departs for a competitor, the departure can raise urgent concerns about the misappropriation of trade secrets and the violation of post-employment obligations. Swift action is often necessary, including seeking a temporary restraining order (TRO) to prevent further misappropriation and preserve the status quo while litigation proceeds. Courts consider factors such as the employee’s access to confidential information, suspicious activity prior to departure—such as mass downloading of files—and whether the new employer is in direct competition.

In Texas, non-compete agreements are enforceable under the Texas Covenants Not to Compete Act if they are ancillary to an otherwise enforceable agreement and contain reasonable limitations as to time, geography, and scope of activity. Texas courts will reform overly broad provisions rather than void them outright, and injunctive relief is available where a breach is threatened or ongoing. Employers must act promptly to seek enforcement, as delay can undermine claims of irreparable harm required to support temporary injunctive relief.

Non-solicitation agreements restrict a former employee from soliciting a company’s clients or employees after departure. Although generally viewed as less restrictive than non-compete clauses, non-solicitation agreements must still meet Texas enforceability standards and are scrutinized for reasonableness in scope. When violated—particularly where the former employee uses confidential customer information to solicit business—these breaches can support claims for injunctive relief, lost profits, and damages for unjust enrichment.