Dallas Employment Lawyer Blog
Dallas Employment Trial Lawyer Riley Carter
Most employees sign a proprietary information or trade secret agreement on their first day, somewhere in a stack of onboarding paperwork handed over between the tax forms and the direct deposit authorization. Very few employees read it closely, and almost no one keeps a copy. The document usually resurfaces only at the moment it matters most, when the employee has accepted a new position and the former employer sends a letter reminding them of “continuing obligations.” Understanding what these agreements actually require, and what they cannot lawfully require, is essential for any employee considering a move.
These agreements travel under a variety of names, including confidentiality agreement, nondisclosure agreement, proprietary information and inventions agreement, or employee agreement regarding confidential information. The label matters far less than the contents. A single document may contain several distinct promises, including a duty not to disclose or use confidential information, an assignment of inventions and work product to the employer, a promise to return all company property and delete company data, a promise not to solicit customers or clients, a promise not to recruit former coworkers, a covenant not to compete, a notice period before resignation, and a forfeiture or clawback provision affecting bonuses, commissions, or equity. Each of these operates differently, and each carries a different level of enforceability under Texas law.
The controlling principle is simple: the document controls. Texas courts enforce the written language of a restrictive covenant as written. What a recruiter said during the interview, what a supervisor promised informally, and what an HR representative described as “standard” carry very little weight against the text of a signed agreement. This is why the first step in evaluating any post-employment obligation is obtaining the actual signed document, along with any employee handbook provisions, equity plan documents, bonus plan documents, or offer letters that incorporate restrictive covenants by reference. Employees who never received a copy should request one in writing before resigning. Employers are generally willing to provide it, and the request itself is not evidence of anything improper.
Certain obligations do survive the end of employment, and they survive whether or not the employee remembers signing anything. Genuine trade secrets are protected by statute independent of any contract. The Texas Uniform Trade Secrets Act, found in Chapter 134A of the Texas Civil Practice and Remedies Code, and the federal Defend Trade Secrets Act both prohibit the misappropriation of trade secrets regardless of whether an agreement exists. Contractual confidentiality provisions typically run indefinitely as to trade secrets and for a defined term as to other categories of confidential information. Return-of-property and data-deletion obligations are triggered at separation and are almost always enforceable. Invention assignment provisions continue to operate as to work created during employment.
Other obligations are far more limited than the document suggests. Texas law does not permit an employer to lock away an employee’s general skills, knowledge, training, and professional experience. The ability to do the work is the employee’s own, and it leaves with the employee. There is an important line, however, between carrying general expertise to a new role and carrying documents, files, customer lists, pricing models, or downloaded data. The first is lawful. The second is where most litigation begins.
Covenants not to compete occupy a category of their own. Under Section 15.50 of the Texas Business and Commerce Code, a non-compete is enforceable only if it is ancillary to an otherwise enforceable agreement and contains limitations as to time, geographic area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than necessary to protect the employer’s legitimate business interest. Overbroad covenants are subject to judicial reformation, which means a court may narrow rather than void the restriction. Employees should also know that the federal landscape shifted and then settled. The Federal Trade Commission’s 2024 rule banning most non-competes never took effect, was vacated by a federal court in Texas, and was formally removed from the Code of Federal Regulations in February 2026. The Commission has since confirmed it will address non-competes through individual enforcement actions rather than a nationwide ban. Texas law therefore controls. One significant exception applies to healthcare: Senate Bill 1318, effective September 1, 2025, imposes caps on duration, geographic scope, and buyout amount for non-competes covering physicians, dentists, nurses, and physician assistants, and applies to agreements entered into or renewed on or after that date.
Several provisions deserve particular scrutiny before an employee resigns. Definitions of “confidential information” are frequently drafted to sweep in publicly available information, general industry knowledge, and the employee’s own professional contacts. Duration provisions sometimes impose perpetual confidentiality on information that is not a trade secret at all. Invention assignment clauses in Texas may reach personal projects developed outside working hours, because Texas has not adopted the statutory carve-out that some states provide for inventions created on an employee’s own time with the employee’s own resources. Non-solicitation provisions barring contact with any customer or prospective customer can function as de facto non-competes and are analyzed as restraints of trade. Forfeiture and clawback provisions buried in equity or bonus plan documents can impose real financial consequences for competing even where a traditional non-compete would fail. Choice of law and venue clauses may attempt to route any dispute to a jurisdiction more favorable to the employer. Provisions awarding attorney’s fees, liquidated damages, or automatic injunctive relief to the employer significantly raise the stakes of any disagreement.
Employees should also be aware of what an agreement cannot do. No confidentiality provision can lawfully prevent an employee from filing a charge with the Equal Employment Opportunity Commission or the Texas Workforce Commission, participating in an agency investigation, or reporting suspected illegal conduct to a government official. The Defend Trade Secrets Act provides express immunity for confidential disclosures of trade secrets made to an attorney or to a government official for the purpose of reporting or investigating a suspected violation of law. If an agreement purports to bar all disclosures without qualification, that language does not override those protections.
The most avoidable problem arises in the final weeks of employment. Forwarding files to a personal email account, copying material to a personal drive, downloading customer or pricing data, or deleting activity in an effort to be discreet can transform a straightforward departure into a trade secret lawsuit, and can create counterclaim exposure that complicates an otherwise strong discrimination or retaliation case. Employees who believe they need documentation to protect their rights should speak with an attorney about lawful preservation before taking anything. Likewise, a demand letter from a former employer, including one sent directly to a new employer, is not a court order. Such letters are frequently broader than the underlying agreement permits, and Texas law allows an employee to recover attorney’s fees in certain circumstances where an employer sought to enforce a covenant to a greater extent than was reasonably necessary.
If you have been asked to sign a proprietary information or trade secret agreement, have received a letter accusing you of violating one, or are weighing a new opportunity and want to understand what your current agreement actually permits, you may have more room to move than the document suggests. Please reach out to me in the Dallas office for a consultation or one of my talented colleagues in Houston or Austin. Our firm focuses exclusively on protecting employee rights and holding employers accountable under the law.