On May 2, 2013, Governor Perry signed the Texas Uniform Trade Secrets Act into law. So, let’s cut right to it. What does it do different for employers? The most notable feature is that the law allows the “prevailing party” to recover fees in certain circumstances.
This is a nice feature. Trade secret litigation is expensive and it is often difficult to prove that the employer has really suffered loss due to their theft. Employers can spend an arm and a leg trying to stop the employee who stole the secrets only to fall short when it comes to showing how much money they lost. Damages from stolen trade secrets can sometimes be difficult to prove. Perhaps (we won’t know until cases start interpreting the new law) the threat of paying the employer’s fees will become at least some kind of stick against the former employee under those circumstances.
Employers need to be careful though. Because fees can be awarded to the “prevailing party” there is a chance that the employee can recover fees if the theft of trade secret claim is made in “bad faith.”
The act takes effect on September 1, 2013, and applies to misappropriations after that date.