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TUTSA Preemption: Texas Court of Appeals Clarifies the Reach of Trade Secret Claims

August 20, 2025 | Client Alert | 2 minute read

Coe v. DNOW LP,__ S.W.3d __, No. 14-23-00410-CV, 2025 WL 1759382 (Tex. App.—Houston [14th Dist.] June 26, 2025, no pet. h.).
Chief Justice Christopher, Justice Wise 

The Texas Uniform Trade Secrets Act (TUTSA) has long been the primary vehicle for civil claims involving misappropriation of trade secrets in Texas. But just how far does TUTSA’s reach extend? The Houston Fourteenth Court of Appeals recently tackled that question head-on in Coe v. DNOW LP, holding that TUTSA preempts any claim that relies on the same facts as a trade secret misappropriation claim—including conspiracy, civil theft, and certain breach of fiduciary duty claims. 

Background: A Mass Exodus and a Trade Secrets Showdown

DNOW, a pump seller, faced a mass departure of employees—around thirty in all—who left to join a direct competitor, Permian Pump & Valve. DNOW alleged that thirteen of those former employees, along with Permian and its owner, not only misappropriated trade secrets but also conspired to do so, committed civil theft, and (for some) breached fiduciary duties. The jury sided with DNOW, and the trial court awarded damages and attorney’s fees on all fronts. On appeal, the defendants argued (among other things) that TUTSA should preempt the duplicative theories. 

The Court’s Analysis: “Same Facts” Means Preemption

The Fourteenth Court of Appeals made clear that TUTSA’s preemption provision is not just window dressing. To this end, it adopted the “compare-the-facts” or “same conduct” test: if a claim is based on the same conduct as a trade secret misappropriation claim, it is preempted by TUTSA. Simply adding an extra element (like an agreement in a conspiracy claim) cannot save a claim from preemption if the underlying facts are the same. 

The court was explicit: “if proof of some other theory of liability would also prove misappropriation of a trade secret, then a claim under that other theory of liability is preempted.” This effectively prevents “artful pleading” that would otherwise allow plaintiffs to sidestep TUTSA’s preemption framework by re-labeling their claims. 

However, the court drew a line between trade secrets and mere confidential information. Claims based on the misuse of confidential information that does not meet the statutory definition of a trade secret are not preempted by TUTSA and may proceed. But if the claim is, at its core, about trade secret misappropriation, TUTSA is the exclusive remedy. 

Impact: Conspiracy, Civil Theft, and Fiduciary Duty Claims Narrowed

  • Conspiracy: Claims for conspiracy to misappropriate trade secrets are preempted. Plaintiffs cannot use conspiracy as a workaround to impose joint and several liability for trade secret misappropriation. 
  • Civil Theft (TTLA): Claims under the Texas Theft Liability Act that are based on the same facts as a TUTSA claim are preempted (the court also clarified that mere copying of information, without intent to deprive the owner of its use, does not constitute theft under the TTLA).
  • Breach of Fiduciary Duty: To the extent these claims are based on trade secret misappropriation, they are preempted. However, claims based on misuse of confidential information that fall short of trade secret status can still be brought.

Bottom Line

Coe v. DNOW LP is a significant development for Texas trade secrets litigation. The decision reinforces TUTSA’s role as the exclusive civil remedy for trade secret misappropriation and sharply limits the ability to pursue overlapping claims based on the same facts. For businesses, this means careful attention must be paid to how claims are pleaded and to the distinction between trade secrets and other confidential information. Plaintiffs and defendants alike should expect courts to scrutinize the factual basis of each claim and to enforce TUTSA’s preemptive effect with rigor.