Can a plaintiff “plead around” TUTSA preemption by alleging misappropriation of confidential information that is not a trade secret?

For regular people, or even lawyers if they don’t handle trade secrets lawsuits, that may sound like some real inside baseball, but it’s an important issue that often comes up in my Texas litigation practice.

I’ll explain.

Let’s take the typical case where a company sues a former employee for taking super-secret documents to a competitor. The company will allege misappropriation of trade secrets under the Texas Uniform Trade Secrets Act (TUTSA). But the company will rarely stop there. It will also allege a number of common law torts.

The usual suspects? Breach of fiduciary duty, knowing participation in breach of fiduciary duty, tortious interference with contract or prospective business relationships, conversion, and conspiracy.

Why does the plaintiff need to assert these extra claims? For reasons. For now, let’s just consider whether the claims are preempted.

Often these common law claims will be based—at least in part—on the same conduct that the trade secrets claim is based on, i.e. taking the company’s confidential stuff. In that case, the problem for the plaintiff is that TUTSA preempts common law claims based on misappropriation of trade secrets.

In other words, if your factual claim is that your employee took your trade secrets, then you get one claim: misappropriation of trade secrets. You can’t relabel the claim as some common law tort, such as breach of fiduciary duty or conspiracy.

But clever lawyers know how to get around this. They will allege an alternative theory: if the documents the employee stole from the company are not trade secrets, they are still confidential information, and TUTSA’s plain text doesn’t preempt claims for misappropriation of non-trade-secret confidential information.

Or does it? That’s the question.

The Houston Court of Appeals Adopts the “Factual Basis As Pleaded” Rule

In Reynolds v. Sanchez Oil & Gas Corp., No. 01-18-00940-CV, 2023 WL 8262764 (Tex. App.—Houston [1st Dist.] Nov. 30, 2023, no pet.), the court looked at the statute and the case law applying it and said no, the plaintiff’s allegation of misappropriation of confidential information did not escape TUTSA preemption.

In a detailed opinion by Justice Farris, the court summarized the preemption provision of TUTSA as follows:

• TUTSA “displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.” Id. at *17.
• TUTSA does not preempt contractual remedies. Id.
• TUTSA does not preempt “other civil remedies” that are not based on misappropriation of trade secrets. Id.

The court set then set out these principles of TUTSA preemption established by Texas case law:

• A common law claim is preempted when the “gravamen” of the claim duplicates a TUTSA claim. Id. at *17.
• A common law claim duplicates a TUTSA claim “if the factual basis of the common law claim, as pleaded, would not exist without the use of the alleged trade secrets.” Id. (emphasis added).
• Preemption eliminates alternative theories of common law recovery premised on misappropriation of a trade secret. Id.
• TUTSA “does not preempt a common law claim that addresses harm separate from the trade secret misappropriation.” Id.

Note the emphasized language “as pleaded.” We’ll come back to that.

First let’s see how these principles applied in Reynolds. The “Sanchez parties” asserted claims including misappropriation of trade secrets and knowing participation in breach of fiduciary duty. The knowing participation claim was based on both misappropriation of confidential information and solicitation of employees. Id.

Everyone agreed that the solicitation part of the claim was not preempted. The question was whether TUTSA preempted the part of the based on non-trade-secret confidential information. See id. at *17-18.

The court said yes, the claims were preempted. The rationale: “As pleaded by the Sanchez parties . . . even the confidential and proprietary information at issue in this case falls within TUTSA’s definition of a trade secret.” Id. at *18 (emphasis added).

Here’s what the Sanchez parties pled that put the confidential information within the definition of a trade secret:

• The confidential information gave them a “competitive advantage.”
• The value of the confidential information was “difficult to overstate,” particularly to a startup competitor.
• They employed various methods to protect the secrecy of the information. Id. at *18.

Accepting these allegations as true, the court said guess what, that sounds like a trade secret:

“These allegations show that even the confidential and proprietary information at issue in this case derives independent economic value from not being generally known or readily ascertainable by proper means and is the subject of reasonable efforts to maintain its secrecy.” Id.

In other words, the allegations met the TUTSA definition of a trade secret.

Thus, the Sanchez parties were hoisted by their own petard. By alleging that the non-trade-secret confidential information [1] was valuable, [2] provided a competitive advantage, and [3] was kept secret, they effectively pled themselves into TUTSA preemption.

Hmm. I smell a three-element test.

Could they have avoided this problem? Suppose the Sanchez parties simply pled “defendants knowingly participated in breach of fiduciary duty by receiving from the former employees information that was confidential but not a trade secret.” Would that claim be preempted?

The Fifth Circuit Adopts the “As Pleaded” Rule in Trinseo

Before we get to that, let’s look at how the Fifth Circuit handled TUTSA preemption in Trinseo Europe GmbH v. Kellogg Brown & Root, LLC, 165 F.4th 399 (5th Cir. 2026).

In that case, the court framed the issue as “the extent to which TUTSA preempts misappropriation of confidential information claims premised on the same information as misappropriation of trade secret claims.” Id. at *420.

Applying Texas law, the Fifth Circuit adopted the Reynolds rule and looked to whether the confidential information “as pleaded” fell within TUTSA’s definition of a trade secret. Id. at 422.

Plaintiff Trinseo asserted its trade secret and confidential information claims in the alternative, basing both claims on the same information. Trinseo alleged that it used the information in its business to gain a competitive advantage, and that it took reasonable steps to keep the information substantially secret. Id.

Applying the Reynolds rule to these allegations, the Fifth Circuit found that preemption applied, because “as pleaded” by Trinseo, the confidential information fell within the definition of a trade secret, and regardless of the labels chose by Trinseo, the substance of its common law claims duplicated its trade secret claims, relying on the same facts. Id.

Application of Trinseo by Federal District Courts

Federal district courts in Texas now apply the Reynolds preemption rule adopted in Trinseo.

One of the first cases to apply Trinseo was Benchmark Towing Systems, LLC v. Weingart, No. SA-24-CV-652-FB (HJB), 2026 WL 1122377 (W.D. Tex. Mar. 23, 2026). In that case, the court ruled that the part of the breach of fiduciary duty claim based on misappropriation of confidential information and trade secrets was preempted, but the part based on other conduct—such as soliciting the plaintiff’s employees—was not. Id. at *7-8.

That was a fairly straightforward application of Trinseo.

It would be a harder question if the plaintiff alleged that some of the confidential information at issue was a trade secret, but other confidential information was not. In that case, one could argue that a claim based on the distinct non-trade-secret confidential information would not be preempted.

If only we had a recent case testing this proposition.

Application of Trinseo in Universal Plant Services

In Universal Plant Services, Inc. v. Meier, No. H-22-2364, 2026 WL 1483548 (S.D. Tex. May 27, 2026), the plaintiff was UPS (but not the one with the brown shirts). UPS argued that its common law tort claims were not preempted because they were based on misappropriation of non-trade-secret confidential information that was “entirely separate” from the information it claimed was a trade secret. Id. at *5.

In theory, this argument could work under Trinseo. Remember, in Trinseo the plaintiff alleged that the same information was either a trade secret or, alternatively, non-trade-secret confidential information. Arguably, the result could be different if the plaintiff alleged two sets of distinct information.

The problem for UPS was that its own allegations did not support this argument. The defendants’ sage counsel argued that UPS treated the confidential information and trade secrets as the same in both its pleading and its damages expert’s report. Therefore, “as pleaded,” the facts did not support UPS’s attempt to distinguish Trinseo.

The district court agreed. The pleading’s definition of “trade secrets” expressly included UPS’s confidential information. Plus, UPS’s damages expert’s report expressly stated he was asked to assume that UPS’s confidential information was, in fact, a trade secret. Id. at *4.

Thus, the court concluded that “as pled, Plaintiffs’ claims for misappropriation of confidential information and trade secrets are based entirely on information that Plaintiff allege constitute ‘trade secrets.’ The part of the claim for breach of fiduciary duty based on misappropriation of confidential information was therefore preempted.”  Id. at *5.

The claims for knowing participation in breach of fiduciary duty, tortious interference with contract, and conspiracy were preempted for similar reasons. Id. at *5-7.

Would the result be different if UPS had pled two distinct categories of confidential information, one with trade secret status and another without?

Maybe. But in that case, there would still be a “workability” problem.

This was pointed out by the defendants’ counsel in Universal Plant Services: He argued: “Allowing UPS to submit common law tort theories based on information UPS itself contends is a trade secret is a recipe for jury confusion. For the common law tort claims, the jury would have to be instructed to consider only information that it finds is confidential but not a trade secret.” Id. at *2.

The district court noted the argument but did not find it necessary to resolve it, considering Trinseo’s “facts as pleaded” rule was dispositive. So we’ll have to wait for another opinion to address my “workability” argument.

Keep in mind, most trade secrets lawsuits don’t involve any real trade secrets. But don’t get me started.

Will Plaintiffs Just Plead Around Reynolds and Trinseo?

I expect savvy counsel for trade secrets plaintiffs will now be more careful to try to plead around the Reynolds rule adopted in Trinseo.

At the risk of giving my future adversaries free advice, a plaintiff could simply allege “defendant breached his fiduciary duty by misappropriating a separate category of plaintiff’s information that was confidential but not a trade secret.” That would make it difficult for the defendant to argue that the claim “as pleaded” was preempted.

The problem, of course, will be the facts. Not every case will have facts that support alleging two distinct categories of confidential information. And the plaintiff’s lawyers won’t want to weaken their case by expressly alleging that some of the information is not a trade secret.

Plus, as Universal Plant Services illustrates, if you allege that some of the confidential information is not a trade secret, then you need two separate damage theories, and the last thing a “damages expert” wants to deal with is nuance.

So, while Reynolds and Trinseo leave the door open to “pleading around” TUTSA preemption, plaintiffs in Texas trade secrets lawsuits will need to be careful what they wish for.

The better approach, as some federal district courts recognized before Trinseo, would be a blanket rule that all claims based on misappropriation of confidential information are preempted by TUTSA. See, e.g., Alexandra Lozano Immigration Law, PLLC v. Meneses Law Firm PLLC, No. 4:24-CV-2190, 2025 WL 606970, at *4 (S.D. Tex. Feb. 25, 2025) (adopting more persuasive “majority” approach that the UTSA “preempts noncontractual legal claims protecting business information, whether or not the business information is a Uniform Act trade secret”).

This rule is more consistent with the purpose of preemption, and it solves the workability problem.

But of course, I don’t make the rules, I just make the arguments.

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Zach Wolfe (zach@zachwolfelaw.com) is a Texas trial lawyer who defends noncompete and “trade secret” lawsuits at Zach Wolfe Law Firm (zachwolfelaw.com). Thomson Reuters has named him a Texas “Super Lawyer”® for Business Litigation every year since 2020.

These are his opinions, not the opinions of his firm or clients. Reasonable people can disagree. Every case is different, so don’t rely on this post as legal advice for your case.