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Restrictive covenants and trade secrets — Texas

Employers, particularly in the area of manufacturing, often have chemical formulas, production techniques or processes that they consider to be confidential “trade secrets.” In order to protect the confidentiality of trade secrets, employers should familiarize themselves with the laws governing the designation of and methods for safeguarding, confidential and proprietary business information.

The definition of a trade secret

In 2014, Texas adopted the Uniform Trade Secrets Act, providing a number of protections for trade secrets in the state of Texas. Under Texas statute, trade secrets are business information that meets all of the following criteria:

  • is valuable
  • is not generally known to and not readily ascertainable by proper means by others
  • is subject to reasonable efforts to maintain its secrecy.

This new statute provides companies with greater protection for their trade secrets and will expand the available legal remedies to address actual and possible future harm.

One of the most signification changes under the Act is the definition of “trade secret” itself. The Act changes the definition to include financial information and client and supplier contact, information that was...

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