Firm News – March 2014

Attorney Clayton Bailey has been recognized as a Client Service All-Star by The BTI Consulting Group of Wellesley, Mass. Attorney Bailey is one of only 330 attorneys nationwide to be recognized as a Client Service All-Star based on independent interviews with corporate counsel.

Attorney Alex Brauer has been recognized as a 2014 Texas Rising Star by Thompson Reuters. This marks the fifth consecutive year that attorney Brauer has been recognized as a Rising Star.

On February 14, 2014, attorney Brauer was quoted on alternative fee agreements in the Texas Lawbook.

In December 2013, attorney Ben Stewart was interviewed by KLIF-AM’s Kurt Gilchrist regarding the lawsuit pitting Snuffer’s Restaurants, Inc. against Pat Snuffer.

Attorney Paul Green was recently admitted to the United State District Courts for the Southern and Western Districts of Texas.

No Confidentiality Agreement? You May Still Be Protected.

One of your key employees just left and went to a competitor. Unfortunately, you never had her sign a confidentiality agreement. Is your confidential information in jeopardy? Maybe not.

A best practice is to have employees working with your company’s confidential information (customer lists, bid processes, secret formulas, etc.) sign a confidentiality agreement. Even if this did not occur, however, your confidential information may still be protected.

Under Texas law, a former employee may not divulge the trade secrets of his former employer. This is true even when there is no contract between the employee and employer prohibiting such disclosure. The primary issue then becomes whether your company’s confidential information qualifies as a trade secret.

Many items may fall within the definition of a trade secret: customer lists; pricing information; customer preferences; and manufacturing processes to name a few. In determining whether an item qualifies as a trade secret, courts look to see whether the information gives the company an advantage or potential advantage over competitors who do not have or use the information. Courts consider the following factors in making this determination: (1) the extent to which the information is known outside the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the employer to guard the secrecy of the information; (4) the value of the information to the employer; (5) the amount of effort or money expended by the employer in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

For example, courts have found that a company’s confidential information (including customer contact information and pricing policies) constituted a trade secret when: (1) the company did not publicize the information; (2) the company’s offices were not open to the public and computers were password protected; and (3) employee manuals emphasized the confidential nature of the company’s business. In contrast, courts have found that a company’s formulas for its cleaning products were not trade secrets when: (1) the company made no effort to keep the formulas secret; (2) the formulas were kept in unlocked file cabinets where various people had access to them; and (3) the components of the formulas were a matter of common knowledge and general use within the industry.

In sum, if your company truly treats information as confidential, courts most likely will as well and former employees will be prohibited from disclosing or using your confidential information to compete with your business.