Coe v. DNOW LP Case Win

The Houston Court of Appeals reversed a multi-million judgment against 13 former employees, reducing the award to just $11,250 against a single defendant. The appellate court also rendered judgment for $1.9 million in attorney’s fees for the former employees. This decision fundamentally reshapes Texas law governing departing employees and trade secrets. Andrews Myers shareholder Mark J. Levine represented one of the successful appellants in the suit. Our client faced claims under three theories after leaving their employer to join a competitor: conspiracy to misappropriate trade secrets; civil theft; and breach of fiduciary duty. After a 32-day trial, the jury rejected the former employer’s case and found Mr. Levine’s client responsible for $0 damages on the employer’s trade-secrets claim.

Over defendants’ objections, the trial court nonetheless entered judgment for the employer and against our client based on the jury’s finding that our client participated in a civil conspiracy. At trial and again on appeal, the defense team argued that the Texas Uniform Trade Secrets Act (“TUTSA”) preempted a conspiracy finding based on allegations of misappropriated trade secrets and that our client therefore prevailed on the TUTSA claim.In a matter of first impression, the appellate court agreed with the appellants and held that TUTSA preempted claims of conspiracy to misappropriate trade secrets. The Court of Appeals adopted a new rubric for evaluating TUTSA preemption: claims requiring proof of the “same facts” as trade secret misappropriation are preempted. Because the former employer could not rely on its defective conspiracy claim, the Court of Appeals rendered the very judgment that our client earned at trial. The Court also found that our client did not violate the Texas Theft Liability Act and awarded substantial attorney’s fees as a prevailing party.