RICO and Trade Secrets

In EnvTech, Inc. v. DeBusk, the Fifth Circuit reversed dismissal of a civil RICO claim built on trade secret theft as the predicate act.

The plaintiff alleged that the defendant, a CEO, directed a pattern of hiring competitors’ key employees and stealing their proprietary knowledge. The Fifth Circuit held that the plaintiff plausibly alleged both the predicate offenses and the pattern requirement—relatedness and open-ended continuity—by showing a consistent modus operandi: the defendant personally hired competitors’ employees and directed them to use stolen trade secrets for his company’s gain, triggering multiple lawsuits from 2020 onward.

On continuity, the court found the alleged scheme posed a threat of future repetition. The defendant had declined to discipline employees whose theft led to litigation, continued to push the use of stolen methods even after a lawsuit was filed, and testified that he “never thought about trade secrets” despite running a company that deals in proprietary cleaning technologies—a statement the court treated as a possible false exculpatory that made the modus operandi allegations more plausible. No. 25-40237 (Jun. 9, 2026).