Why Texas’ New Business Court Authority Over Trade Secrets Could Reshape Executive Decision-Making

On September 1, 2025, the Texas Legislature expanded the Texas Business Courts’ jurisdiction to include trade secret claims. This development could significantly affect where and how your disputes are resolved.

At Gardner Employment Law, we stay up-to-date with the latest changes in Texas employment and business law so you understand how these developments affect your rights, your career, and your future mobility. Continue reading to learn more about this major shift in the law. 

Why Should Executives Care About the Expansion of the Business Courts?  

Executives should care because the expansion of the Texas Business Courts directly increases the likelihood that disputes about non-competes, confidentiality obligations, or alleged misuse of company information will be routed into a specialized Business Court rather than a traditional district court.   The Texas legal environment tends to favor companies.

Texas created its Business Court system in 2023 to handle complex, high-value commercial disputes to be heard by judges who have specialized business law experience. The Business Courts became operational in September 2024 in five major metro regions: Dallas, Austin, San Antonio, Fort Worth, and Houston.  But – these courts follow different procedures and address only commercial issues.

The newly enacted HB 40 dramatically expands the kinds of cases these courts can hear by adding:

• Trade secret cases, including claims under the Texas Uniform Trade Secrets Act (TUTSA)
• Disputes relating to the ownership or use of intellectual property
• Cases involving $5 million or more in controversy

For executives – whose disputes often involve sensitive data, confidential strategies, or non-compete obligations – this means your future litigation is more likely to land in a Business Court rather than a traditional district court.

Do Texas Business Courts Use Juries?

Yes, but not for everything. Here is the breakdown:

For executives, this setup means:

• Your request for an injunction or emergency relief (often critical in non-compete and trade secret cases) will be decided by a judge from the business world, not a jury.
• If the case proceeds to a full trial, a brand new judge who knows nothing about your case will preside.
• A traditional Texas jury will decide factual issues.

This mixed model may increases predictability early in the case, depending on particular the business court judge.  However, that predictability goes out the window if the case goes to trial.  It will be like “starting from scratch.

What is the Impact of Texas HB 40 on Non-Compete Litigation Against Executives?

The new changes in Texas HB 40 will impact executives especially, who are more likely to face litigation combining non-compete and trade-secret claims.  Although HB 40 doesn’t explicitly expand jurisdiction to non-compete cases, most non-compete issues also fall under TUTSA (Texas Uniform Trade Secrets Act).    TUTSA claims will be heard by judges in the Business Courts.

1. Expect More Cases to Land in Business Courts

Because many non-compete lawsuits also allege misuse of trade secrets (even if only minimally), companies now have stronger incentive to file in Business Courts.

Tactical actions by companies may include adding trade-secret claims to the case to ensure access to these specialized courts and judges who favor businesses.

2. There Is Risk for Companies Which Executives Can Use to Their Advantage

TUTSA requires proof of true “misappropriation,” such as:

• Taking confidential files
• Using proprietary algorithms or customer lists
• Disclosing sensitive internal strategies

A company cannot simply allege a trade-secret violation because an executive left to work for a competitor.

If an employer adds a weak trade-secret claim just to trigger Business Court jurisdiction, executives may push back because:

• TUTSA allows attorney’s fees against a party who brings a trade-secret claim in bad faith.
• Discovery of information in Business Courts is more specific and less prone to fishing expeditions.
• A judge with business expertise may scrutinize whether true misappropriation occurred.

3. Business Court Judges Move Faster

For executives facing aggressive enforcement actions, beware of the likely speed of procedures.

• Injunction hearings may occur more quickly.
• Written rulings are more likely than appearing at oral hearings in court.
• The judge may be more knowledgeable about the realities of executive mobility and competition.

This can be an advantage for executives who have strong defenses or who can prove they did not take or use trade secrets.  It can be disastrous for executives who move slowly or are unprepared.

4. Venue Becomes More Strategic

Where the case is filed makes a difference.  Because Business Courts sit only in five regions, forum-selection clauses (agreeing where the case will be tried) in your employment and equity agreements now matter more than ever.

You should review your signed agreements to see:

• Whether the company selected a Business Court-eligible county
• Whether disputes can be moved into a Business Court even if originally filed elsewhere
• Whether the agreement allows jury trials or waives them

Bottom Line

For senior executives transitioning roles, entering competitive industries, or managing access to sensitive business information, the expanded reach of the Texas Business Courts fundamentally changes the litigation environment.

You may benefit from having early decisions made by a sophisticated business judge – but you must also be aware that companies and their lawyers may be more aggressive in asserting trade-secret claims to bring your case into these courts. If you are interested in how the new Business Courts may affect you, contact us today.