In late June of 2025, the Court of Appeals of Texas, Houston, issued a landmark ruling that expands the scope of preemption for trade secret misappropriation claims brought under the Texas Uniform Trade Secrets Act (“TUTSA”). The Court held in Coe v. DNOW LP that TUTSA preempts claims that are based on the same facts as the underlying trade secrets misappropriation claim. This ruling may close the door for parties looking to artfully plead both trade secret misappropriation and other claims like civil conspiracy and breach of fiduciary duty.
DNOW sued its competitor Permian Pump & Valve and former DNOW employees for misappropriating trade secrets and civil conspiracy, and lodged claims of breach of fiduciary duty against ex-employees. DNOW alleged in its complaint that the former employees copied 32 boxes of confidential information of the Company and then exited en masse to work for Permian, a competitor.
The lower trial court found in favor of DNOW on all claims, awarding damages, attorney’s fees, and ordering certain ex-employees to forfeit their compensation earned from DNOW in 2022.
On an issue of first impression, the Texas Court of Appeals reversed the trial court’s judgment for DNOW, holding that common law claims based on the same facts are preempted under TUTSA. The Court of Appeals ruled that, “if proof of some other theory of liability would also prove misappropriation of a trade secret [under the statute], then the claim is preempted.” The Court also noted that three federal appellate courts follow a “compare-the-facts” test that preempts claims for civil conspiracy to misappropriate trade secrets. In other words, “a claim that the appellants were part of a conspiracy to misappropriate trade secrets is preempted, because it requires proof of the misappropriation.”
The decision demonstrates that businesses and employers may not be able to plead additional common law claims (like civil conspiracy and breach of fiduciary duty) that rely on largely the same facts of the underlying trade secret misappropriation claim. The Coe decision is especially important, given that forty-nine states have adopted the Uniform Trade Secrets Act.