On May 2, 2013, Texas Governor Rick Perry signed into law the Texas Uniform Trade Secrets Act, which is substantially similar to the model Uniform Trade Secrets Act (UTSA). Texas is the 48th state to adopt the UTSA (New York and Massachusetts are the only states that have not yet adopted it).

The Texas UTSA creates Chapter 134A of the Texas Civil Practice and Remedies Code, and replaces existing Texas law governing the misappropriation of trade secrets (see State Q&A, Trade Secret Laws: Texas). However, it does not affect contractual remedies for trade secret disclosures.

The Texas UTSA, like the model UTSA itself, prohibits the unauthorized acquisition, disclosure and use of a trade secret. The Texas UTSA defines trade secrets more broadly than the model UTSA by including a process, financial data, or list of actual or potential customers. The definition also includes, like the model UTSA, a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers, that:

However, the Texas UTSA allows authorized reverse engineering.

The new law provides that there is a presumption in favor of granting protective orders to preserve the secrecy of trade secret information. Courts may enjoin actual or threatened misappropriation. Normally, the injunction ends when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time to eliminate a commercial advantage that otherwise would result from the misappropriation.

A court may also order affirmative acts to protect the secrecy of trade secrets. The law authorizes courts to use reasonable means to protect a trade secret in litigation, and protective orders may:

In addition to injunctive relief, claimants under the new law can seek damages for the actual loss caused by the misappropriation, as well as for unjust enrichment. The court can also impose a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret. Exemplary damages and attorneys' fees are available for the wilful and malicious misappropriation of trade secrets. Attorneys' fees are also available if a claim of trade secret misappropriation is made in bad faith.

The Texas UTSA provides that it will be interpreted and construed in the same way as the UTSA is interpreted in other states, to effectuate the goal of uniformity in trade secret laws across the states.

The Texas UTSA takes effect on September 1, 2013 and applies to trade secret misappropriation that occurs on or after that date. Trade secret misappropriation that occurs before the effective date, or a continuing act of misappropriation that began before the effective date, is governed by Texas law in effect immediately before that date.

Employers in Texas should familiarize themselves with the Texas UTSA because it replaces the long-standing common law governing trade secrets. Employers that operate in Texas and other states that have adopted UTSA should benefit from the relative uniformity of trade secret laws across jurisdictions.