Shhhhh It’s a (Trade) Secret

Just about every business or industry has its secrets. They also want to keep those secrets from getting out.

When you stop to think about it, it makes sense that most businesses and enterprises have secrets; secrets that protect how they do business, how they make their product, what methods are used and not used, and what inventions they may have. These are the things that they want to hold close to their chest, because if the information got out, they’d be competing against themselves with another company who acquired their information.

Rather than lose their competitive edge, companies with trade secrets make every effort to keep them and have been known to sue people who knowingly sell or accidentally give away critical information about how they do business. This deliberate subterfuge or accidental gaff is a form of unfair competition and those that are doing business in the marketplace are expected to do so fairly – meaning not resort to stealing another’s secrets. If you don’t understand how this works, talk to a seasoned Dallas business lawyer and find out. Better safe than sorry later.

Thankfully there is an Act in place that provides protection against those who get product formulas, techniques, devices, methods and secrets by less than honest means; means which include theft, spying via some form of electronic wizardry, spying by other means (perhaps the old-fashioned way), breach of duty, convincing someone else to breach their duty, misrepresentation, and forking over pots of money to bribe someone for the secret(s). This is where the Uniform Trade Secrets Act comes into play.

The basic kernel of the Act is that if someone profits from ill-gotten information, then unfair competition may exist. Keep in mind that this Act will also mete out punishment if the economic benefit is potential or real; and furthermore, this applies even if the person who stole the secret(s) doesn’t attempt to take advantage of that knowledge.

This is another area of the law that will allow punitive damages, much like some cases in the area of personal injury. For personal injury, punitive damages are awarded for really gross negligence; when dealing with stolen trade secrets, punitive damages may include financial damages, royalties and shared profits. In other words, stealing someone’s secrets is a serious matter and the law doesn’t mess around to make its point when it comes time to own up.

Courts may even grant injunctions to force a company to stop selling an item or service that came about as the result of a stolen secret. These are the things you need to know before you breach an agreement, either on purpose or unwittingly, and any Dallas business lawyer will tell you that right up front on consultation.

Another way that companies work to keep their secrets secret is to ask that workers and contractors sign a confidentiality agreement and spell out in that contract what will happen (including punitive measures) if those secrets are stolen. If a worker breaches the agreement, the company may be able to launch a lawsuit against the person to stop their information from getting out.

When in doubt about what is and what is not a trade secret, or what your agreement says and means, take the time to talk to highly qualified Dallas business lawyer and get the real scoop on what you need to know.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit

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