Eagle Oil & Gas Co. v. Shale Exploration, LLC, 549 S.W.3d 256 (Tex. App.—Houston [1st Dist.] 2018, pet., pet. dismissed) involves the familiar situation where a plaintiff sues for both breach of a confidentiality agreement and for misappropriation of trade secrets. Defendant asserted that plaintiff was limited to a breach of contract claim because the misappropriation claim was barred by the economic loss rule, which bars a recovery in tort for economic losses caused by a breach of contract if the losses are due to the failure to fulfill a contractual obligation. The economic loss rule, however, does not apply if the duty breached stands independent from the contractual undertaking, and the alleged damages are not solely the result of a bargained-for contractual benefit. The court determined such was the case here since the duty not to misappropriate trade secrets stands independently from a party’s contractual obligations, even when the contract requires confidentiality. Thus, the economic loss rule does not apply misappropriation of trade secrets claims.
Heath Coffman has significant experience representing a wide range of clients from individuals and small businesses to large publicly-traded companies in a variety of business and commercial cases and arbitrations. His practice includes representing attorneys and accountants in professional liability cases and in grievance. He frequently handles complex commercial litigation involving intellectual property, trade secrets, fraud, breach of contract, breach of employment agreement, and oil and gas cases in both federal and state district and appellate courts, including the U.S. Court of Appeals for the Fifth Circuit.