What an NDA Reaches When a Co-Owner Leaves — and What It Does Not

An NDA is a contract, and it has a contract's limits: it binds the person who signed it, on the terms
they signed, for as long as those terms run. When the person leaving your company is a co-owner,
three of those limits usually bite at once — they may never have signed one in their own name, the
information they are using may fall outside the definition, and the term may have expired. Which is why
in a co-owner departure the confidentiality agreement is often the weakest claim available, and the
trade secret theory is the stronger one.

Nobody made the owners sign one. Confidentiality obligations get imposed on employees, contractors
and counterparties. The founders who wrote the business plan on a napkin frequently signed nothing at
all, and if there is an obligation it is in the company agreement rather than in a standalone NDA — so
the first question is not what the NDA says but whether one exists as to this person.

The definition does not cover the thing they took. Most NDAs define confidential information as
what was disclosed by one party to the other, sometimes requiring it to be marked. A co-owner did
not receive the customer list from anybody. They built it, or they had it because they ran half the
company. A disclosure-framed definition may simply not reach material the person generated.

The term has run. Two-year and three-year confidentiality terms are ordinary in agreements signed
at formation. Ten years later, a claim that depends on that clause has a date problem — and the
information may be more valuable now than it was then.

And even where it works, it is a contract claim. Contract damages, contract remedies, and no
statutory apparatus behind it.

With key employees who are not owners, where the disclosure framing fits and the term can be kept
current.

Under a company agreement, where confidentiality obligations attached to membership do not depend on
a separate signature and can be drafted to run for as long as the person holds an interest and beyond.

In a transaction, where an NDA before diligence is standard and the definition is written for the
occasion.

As evidence. Even a flawed NDA helps show the company treated the information as secret — which is
one of the elements of a trade secret claim, and the one most often missing.

The Texas Uniform Trade Secrets Act defines "improper means" to include "breach or inducement of a
breach of a duty to maintain secrecy, to limit use, or to prohibit discovery of a trade secret"
(Tex. Civ. Prac. & Rem. Code § 134A.002).

A duty to maintain secrecy is not the same thing as a signed NDA. The statutory language reaches
the duty however it arises. In TASF, LLC v. Turn2 Specialty Cos., LLC, No. 01-21-00089-CV, 2022 WL
709836, at *11 (Tex. App.—Houston [1st Dist.] Mar. 10, 2022, no pet.) (mem. op.), the court rejected
the argument that the absence of confidentiality agreements defeated protection: trusted roles and
receipt of confidential information for the work supported the duty. And where a co-owner was the
company's agent, Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 200–02 (Tex. 2002) supplies
agency obligations that do not depend on a signature.

But do not read that as "no NDA, no problem, the statute has you covered." Two qualifications
do real work:

The claim still needs an actual trade secret. Information with independent economic value from
being secret, and reasonable measures taken to keep it secret. § 134A.002(2), (6). The company's own
conduct is the evidence — which is the argument for having an NDA even where it is not the theory
you end up running on.

And for a co-owner, the route through the statute is usually USE, not acquisition. A co-owner did
not obtain the client list improperly; they had it because they ran half the company. Title Source,
Inc. v. HouseCanary, Inc., 612 S.W.3d 517, 530–32 (Tex. App.—San Antonio 2020, pet. denied) held that
later confidentiality breaches cannot establish improper acquisition where the information was
supplied voluntarily. The question becomes unauthorised use or disclosure by someone who
received it lawfully under circumstances imposing a duty — a route the statute provides separately,
and the one that fits these facts.

What all of it depends on is the company agreement, which under Tex. Bus. Orgs. Code § 101.401 may
expand, restrict, or — since May 2025 — eliminate those duties outright. As of October 2026 we
have found no Texas appellate decision on whether eliminating fiduciary duties also eliminates the
secrecy duty this claim runs on. They may well be separate duties from separate sources. That is a reason to read
the agreement before relying on the theory, not a reason to assume either answer.

The practical difference: a trade secret claim brings a statutory framework, potential injunctive
relief, and does not require you to prove the person signed something. What it does require is that
the information qualify as a trade secret — which is where the company's own conduct, including
whatever NDAs it did use, becomes the evidence.
When a co-owner leaves with the client list works
through those elements.

A covenant not to compete is governed by
Tex. Bus. & Com. Code § 15.50(a)
and has its own requirements — ancillary to an otherwise enforceable agreement, with reasonable limits
on time, area and activity.
Where Texas non-compete law now stands covers where that has moved.

Three separate claims, three separate analyses, and it is common for one to work when the others do
not. The mistake is assuming the NDA is the whole answer because it is the document you can find.

In a closely held company with more than one entity — an operating company, a holding company, a
property entity — the NDA was frequently signed by whichever one somebody happened to name.

The party to the contract is the only one who can enforce it. If the confidential information
belongs to the operating company and the NDA names the holding company, the claim has a standing problem
before it has a merits problem. The same issue arises after a restructuring: an agreement signed by an
entity that has since been converted, merged, or reorganised may or may not have travelled with the
business, depending on how the transaction was papered.

It is worth ten minutes to check which entity signed, which entity owns the information, and whether
the agreement has an assignment or successor clause. This is also the point at which a company that has
been through a Type F reorganisation or an entity cleanup should re-paper its confidentiality
agreements — and almost none of them do.

Put confidentiality in the company agreement, not only in standalone NDAs, and draft it to survive
the person's departure.

Fix the definition. If your NDAs define confidential information only as what one party disclosed
to another, they do not reach what a co-owner generated. Add material developed by or made available to
the recipient.

Check the terms. An expired obligation is not an obligation.

Behave like the information is secret, because that is what makes the trade secret claim available
when the contract one fails. Access limits, exit procedures, and a record of who could see what.

If someone has already left,
what to do in the first seventy-two hours
is the more urgent page, and this is
our Texas partner dispute practice.

Disclaimer. This publication is provided by Amini & Conant, LLP for educational and informational purposes only and is not intended and should not be construed as legal advice. Should the reader seek further analysis of the subject matter or answers to specific questions about the subject matter, please contact the author at neema@aminiconant.com. This publication is considered advertising under applicable state laws.

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