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Texas Privacy Law Essentials

Privacy law is rapidly evolving across the nation, and Texas is no exception. As businesses increasingly rely on data to drive operations, the legal landscape governing the collection, use, and protection of personal information is becoming more complex. Texas has established its own unique set of privacy regulations, including the Texas Identity Theft Enforcement and Protection Act, the Texas Medical Records Privacy Act, and, more recently, the Texas Data Privacy and Security Act. These laws impose significant obligations on businesses and grant enforcement powers to the Texas Attorney General, making compliance a top priority for companies operating within the state. Understanding Texas privacy law requires recognizing its interplay with federal regulations. Laws such as the Health Insurance Portability and Accountability Act (HIPAA), the Gramm-Leach-Bliley Act (GLBA), and the Children’s Online Privacy Protection Act (COPPA) set nationwide standards for data protection. However, Texas law often supplements and expands on these federal frameworks, creating a layered regulatory environment. For instance, Texas’s medical privacy laws may impose stricter standards than HIPAA in certain contexts. Business lawyers must appreciate these intersections to effectively advise clients on compliance strategies that mitigate legal risk at both the state and federal levels. Privacy is no longer a niche concern reserved for technology companies; it is a fundamental issue that impacts every business sector. From retail and healthcare to financial services and energy, companies are collecting vast amounts of personal data. A single data breach or non-compliance incident can lead to costly litigation, regulatory penalties, and reputational damage. As trusted advisors, business lawyers must be equipped to guide clients through privacy challenges, helping them not only meet legal requirements but also build consumer trust and maintain a competitive edge in an increasingly data- driven economy.

Data Privacy Issues

Due to the increase in cyber attacks and misappropriation of data from companies of all sizes and across all industries, attorneys, both personally and professionally, face increasing responsibilities to understand and implement strong and robust data protection programs. Attorneys should be aware of the relevant and changing data protection standards, understand how to meet such standards and help clients to do the same, and prepare to react effectively when a data breach occurs.

Rights to Information of Owners and Governing Persons of Texas Entities Under the Texas Business Organizations Code

The Texas Business Organizations Code (the “TBOC”) contains various provisions governing the rights of owners and governing persons of Texas entities to review, “inspect” or “examine” the books and records of such entities. This paper focuses on those statutory information rights with respect to for-profit corporations, nonprofit corporations, limited liability companies, limited partnerships and general partnerships. Each Texas filing entity1 is subject to the provisions in Title 1, Chapter 3 of the TBOC granting an explicit right to the entity’s governing persons to examine its books and records for a purpose reasonably related to the governing person’s service as such. On the other hand, the rights of the owners of Texas entities are governed by the different titles of the TBOC governing each different type of entity. This paper first summarizes the provisions of the TBOC requiring the retention of books and records by each different type of entity. Then, this paper summarizes the provisions of the TBOC governing the rights of governing persons to information and the rights of owners to information with respect to the different types of entities.

Protecting Your Client's Proprietary Information

Lawyers and clients often communicate with each other via e-mail and sometimes communicate via other electronic means such as text messaging. The confidentiality of these communications may be jeopardized in certain circumstances. For example, when the client uses an employer’s computer, smartphone or other telecommunications device, or an employer’s e-mail account to send or receive e-mails with counsel, the employer may obtain access to the e-mails. Employers often have policies reserving a right of access to employees’ e-mail correspondence via the employer’s e-mail account, computers or other devices, such as smartphones and tablet devices, from which their employees correspond. Pursuant to internal policy, the employer may be able to obtain an employee’s communications from the employer’s email server if the employee uses a business e-mail address, or from a workplace computer or other employer-owned telecommunications device on which the e-mail is stored even if the employee has used a separate, personal e-mail account. Employers may take advantage of that opportunity in various contexts, such as when the client is engaged in an employment dispute or when the employer is monitoring employee e-mails as part of its compliance responsibilities or conducting an internal investigation relating to the client’s work. Moreover, other third parties may be able to obtain access to an employee’s electronic communications by issuing a subpoena to the employer. Unlike conversations and written communications, e-mail communications may be permanently available once they are created.

"Cloud Computing" and Social Media

Although e-mail and electronic documents may not constitute a part of all litigation matters today, the ever-increasing use of technology in the workplace signals that electronic discovery is a facet of litigation that is here to stay. With changes in technology and the lack of understanding how the technology works, pitfalls (and opportunities) abound for the litigator. Understanding these issues can lead to a better result for clients and—equally important—compliance with appropriate professional obligations. The information contained in this paper represents only the beginning of the process of learning about electronic discovery; but with this information, any lawyer can establish a firm foundation in order to build a more complete understanding of the topic. Such an understanding will assist not only your clients but an entire law firm as well.

Privacy and Data Security Law in Texas, An Overview

The import of this article is, hopefully, to make Texas attorneys aware of just how broad the considerations of privacy and data security can be. As the field grows, lawyers in Texas will inevitably have to take privacy and data security issues into account in many varied business issues, in terms of compliance, transactions, and enforcement of rights. It also seems clear that the federal actions to date indicate that there will not be an over-arching action by the U.S. Congress to address privacy matters to the exclusion of state regulation, or if such an action is taken, that it will only create a floor for minimum protections, and states will continue to be able to regulate as long as it is in a manner that is not contrary to the federal scheme. Consequently, Texas lawyers should anticipate a continuing growth in privacy law and regulation in Texas, as well as an increase in privacy claims being asserted in Texas courts. The transactional lawyer in Texas will have to be aware of, and provide allocations for, these risks in the contracts and other legal documents he or she drafts and negotiates for clients.

Fall, 2015

Includes articles the 84th Session of the Texas Legislature, specifically: "2015 Texas Legislative Update on Entity Law" by Daryl Robertson; "A Series LLC Is Now Included Under The Texas UCC’s Definition Of Person, Removing Uncertainty For Secured Lending Transactions" by James Leeland; "Power of Attorney Bill (HB 3095)" by Jacqueline Akins. There were two non-legislative articles as well, including: "Confidentiality of Email – The Changing Consensus" by Ronald Chichester; and "Texas Crowdfunding Portals Provide Texas Businesses New Access to Investment Dollars" by R. Jason Pierce.

Fall, 2015

New EU Privacy Regulation

If any of your clients have any dealings with European investors or customers, you should be aware of the EU’s massive new data privacy regulation that was published April 27. It is incredibly broad and strict. It treats personal data privacy as a fundamental right under law. This was apparently four years in the making. Here is the EU’s summary page: http://ec.europa.eu/justice/data-protection/data-collection/index_en.htm