Despite Texas Uniform Trade Secrets Act, Establish Strong Policies to Protect Information

Chris Hanslik, Kasi Chadwick

June 6, 2017

Now is the time to update your personal electronic device usage policy to establish protection for your company’s trade secrets.

There are a number of ways to best protect your company’s trade secrets; however—even with the recent amendments to Texas trade secret law—relying exclusively on Texas law is not one of them. The best offense for the protection of your trade secrets is a good defense through contractual protections with your employees.

Recently, the Texas Legislature lent more clarity to the Texas Uniform Trade Secrets Act (TUTSA)—the statute through which modern trade secret claims are brought in Texas. While the amendments shed light on previous ambiguities in the TUTSA, under Texas law, the owner of a trade secret is still expressly tasked with protecting it.

As background, in 2013, Texas trade secret law was materially changed with the adoption of the Texas Uniform Trade Secrets Act. The TUTSA created a new statutory scheme for misappropriation of trade secret claims that displaced the common law, and alongside this new statutory scheme, the TUTSA brought with it new statutory definitions for thinking about trade secret misappropriation. For more on the TUTSA click here. This month, the Texas Legislature fine-tuned the TUTSA definitional scheme.

While the amendments introduced new definitions to help parties navigate a trade secret claim, perhaps more interesting, the Texas Legislature both expanded and bounded the definition of a trade secret. While the new trade secret definition expressly includes more categories of protectable trade secrets, it also expressly requires the owner of the trade secret to take reasonable measures under the circumstances to keep the information secret. Unfortunately, the Legislature has not defined a “reasonable” protective measure. Accordingly, whether an owner has taken reasonable steps to protect a trade secret will likely continue to be a litigation hotbed in trade secret cases.

So what can you do now to protect your trade secrets? Requiring your employees to execute confidentiality agreements is a good first step. Another, often less considered step is a personal device usage policy.

As more and more employers allow their employees to use personal electronic devices to access the employer’s trade secret information, personal device usage policies can better protect your trade secrets.

Personal device usage policies typically include an express extension of the employee’s protection obligations to information contained on the employee’s personal electronic device. These policies also typically include a procedure for return of any trade secret information contained on an employee’s personal electronic device upon separation from the company. Some policies even allow for remote wiping of the employee’s personal electronic device upon separation.

For now, though the law is evolving, for employers wishing to protect their trade secret information, having the proper agreements in place with your employees is still an employer’s best bet.