Texas Non-Compete Law: Confidentiality, Just Like Beauty, Is In the Eye of the Beholder

Recently, a Texas Court of Appeals addressed an issue that arises in almost every non-compete dispute in the Lone Star State – whether an employee has been provided confidential information in return for signing a non-compete agreement. In that case, the court refused to dismiss the lawsuit early and ruled that the issue would have to go to the jury because there was conflicting evidence as to whether the employee received any confidential information from her employer.

This result is not surprising as employers often argue that everything that they provided to employees is confidential, while employees argue that nothing that was provided to them is confidential.  As the result, the issue of confidentiality often ends up being an ultimate “fact issue” that must be resolved by a judge or a jury. 

TAKEAWAY: Employers seeking to enforce non-compete agreements or employees fighting the enforceability of such agreements should early on in the dispute go through a detailed case-law based questionnaire to dig deeper beyond the usual proclamations made by both parties regarding what is and is not confidential in their industry.  

I have found that using such a questionnaire in the pre-litigation stage or early in litigation, whether on employer or employee side of the case, can save parties a lot of money in determining whether a certain claim or a defense should be pursued and how it should be shaped through evidence.

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice. Her practice includes commercial, intellectual property and employment litigation. You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.  

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