Robert Lasser v. Amistco Separation Products, Inc. ( 2014 )

Opinion issued October 2, 2014
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00432-CV
———————————
ROBERT LASSER, Appellant
V.
AMISTCO SEPARATION PRODUCTS, INC., Appellee
On Appeal from the 125th District Court
Harris County, Texas
Trial Court Case No. 2013-39247
MEMORANDUM OPINION
In this interlocutory appeal, Robert Lasser seeks review of the trial court’s
May 28, 2014 order, which grants Amistco Separation Products, Inc.’s request for
a temporary injunction. Lasser raises three issues on appeal.1 He claims, in two
issues, that Amistco Separation Products has failed to show the elements necessary
to obtain a temporary injunction, and, in a third issue, he asserts that the
temporary-injunction order does not comply with the requirements of Rule of Civil
Procedure 683.
We affirm the May 28, 2014 temporary injunction order, as modified.
Background Summary
In 2002, ACS Industries, LP hired Robert Lasser to work in sales. When he
was hired, Lasser signed an employment agreement with ACS. The Employment
Agreement stated, “Employee’s employment under the Agreement shall be on a
day-to-day basis terminable at the will of either Party without notice.” The
agreement contained non-compete covenants, including confidentiality and non-
solicitation provisions. The agreement prohibited Lasser from copying or using for
his personal benefit ACS’s “confidential information,” as defined in the
employment contract. The non-solicitation provision forbade Lasser from
“directly or indirectly, or by action in concert with others, engaging in the
solicitation of sales of competing goods to customers of ACS” for a period of two
years from the contract’s termination.
1
A party may appeal from an interlocutory order of a district court that grants or
denies a temporary injunction. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 51.014(a)(4) (Vernon Supp. 2014).
2
In 2011, ACS sold certain of its assets to Amistco Separation Products, Inc.
(“AMACS”). The two companies entered into an Asset Purchase Agreement on
December 21, 2011. The agreement identified the assets AMACS purchased from
ACS. One of the assets identified was Lasser’s Employment Agreement with
ACS.
The Asset Purchase Agreement also provided that certain employees,
including Lasser, would remain ACS employees during a leasing period. At the
end of the leasing period, the ACS employee would become an AMACS
employee. The Asset Purchase Agreement also provided that certain ACS
employment agreements “shall be assumed and assigned as of the termination of
the Leasing Period.” One of the ACS employment agreements identified was
Lasser’s employment contract.
During the leasing period, on February 6, 2012, ACS sent Lasser a letter
stating, “This letter serves as notice of termination of your Employment
Agreement, effective as of March 1, 2012.” AMACS sent Lasser a written offer of
employment to be effective March 1, 2012. The letter stated that Lasser’s
employment with ACS “will cease effective February 29, 2012.” The letter also
made clear that it was “not an employment agreement.” Lasser became AMACS’s
employee on March 1, 2012.
3
Lasser remained an employee of AMACS, as a manager of the company’s
product sales, until his resignation on June 3, 2013. Lasser then went to work for
Woven Metal Products, Inc. (“Woven”). At that time, AMACS did not consider
Woven to be a direct competitor, but considered it to be a “sideline” competitor.
Following Lasser’s resignation, AMACS conducted a forensic examination
of Lasser’s company laptop to determine if he had downloaded any of AMACS’s
confidential information before he resigned. Based on the examination, AMACS
filed suit against Lasser on July 2, 2013. AMACS alleged that its forensic
examination revealed that Lasser had accessed and downloaded AMACS’s
confidential and proprietary information before his resignation. AMACS also
alleged that it had learned that Lasser’s new employer, Woven, was opening a new
division that would directly compete with AMACS’s main product line.
AMACS asserted that Lasser had breached the non-solicitation and
confidentiality agreement contained in the ACS employment contract by taking
AMACS’s confidential information and trade secrets to use in his new position
with Woven. AMACS alleged that it had the right to enforce the employment
contract because it had assumed the contract as part of the asset purchase from
ACS. AMACS also asserted causes of action against Lasser for conversion, civil
theft, and misappropriation of trade secrets. AMACS requested the trial court to
issue a temporary and permanent injunction against Lasser ordering him to return
4
AMACS’s confidential and trade secret information, enjoining him from disclosing
and using its information, and preventing Lasser from soliciting its customers.
Lasser denied AMACS’s claims and responded to AMACS’s request for
temporary injunction. Lasser asserted that AMACS had no right to enforce the
ACS employment agreement. Lasser argued that ACS’s assignment of the contract
to AMACS was not valid because Lasser had not assented to the assignment.
Lasser also claimed that language in the employment contract prohibited
assignment.
On July 25, 2013, the trial court conducted an evidentiary hearing on
AMACS’s request for a temporary injunction. At the hearing, AMACS offered the
testimony of two corporate representatives and of the forensic documents examiner
who had examined Lasser’s company laptop. Through the expert, AMACS
introduced evidence showing the files that Lasser had accessed and downloaded
before his departure.
Lasser offered his own testimony in defense of the request for the temporary
injunction. He claimed that the material he had downloaded was information
available to the public or had been used by him in performing his job for AMACS.
At the conclusion of the hearing, the trial court signed a temporary-
injunction order. The order required Lasser not to use or disclose to others
AMACS’s confidential information and trade secrets, prohibited Lasser from
5
directly or indirectly soliciting any of AMACS’s customers, and prohibited Lasser
from deleting electronic messages or files in his possession.
Lasser appealed, challenging the July 25, 2013 temporary-injunction order.
Among his challenges, Lasser asserted that the temporary injunction failed to meet
the requirements of Rule of Civil Procedure 683. We agreed. We sustained
Lasser’s challenge of the order on the ground that it was not sufficiently detailed or
specific to meet Rule 683’s requirement that the injunction “shall be specific in
terms” and “shall describe in reasonable detail . . . the act or acts sought to be
restrained.”2
After we issued our opinion, AMACS amended its petition, asserting claims
against Lasser for breach of the Employment Agreement, for conversion of
AMACS’s proprietary information, and for misappropriation of its trade secrets.
AMACS renewed its request for the trial court to issue a temporary injunction,
seeking to prevent Lasser from using or disclosing AMACS’s confidential
information and trade secrets and requesting that the trial court enjoin Lasser from
soliciting its customers.
The trial court conducted a hearing on AMACS request for a temporary
injunction on May 16, 2014. At the hearing, the trial court took judicial notice of
2
Lasser v. Amistco Separation Prods., Inc., No. 01–13–00690–CV, 2014 WL
527539, at *6 (Tex. App.—Houston [1st Dist.] Feb. 6, 2014, no pet.) (mem. op.);
see also TEX. R. CIV. P. 683.
6
the evidence admitted at the July 25, 2013 temporary-injunction hearing. Lasser
also testified at the May hearing.
The trial court granted AMACS’s request for temporary injunctive relief.
The court signed an order on May 28, 2014, containing the following injunctive
provisions:
It is therefore ORDERED Defendant Robert Lasser desist and refrain
from the following·
(a) Defendant is ordered to return to AMACS, and to cease and desist
from using, any of AMACS’s confidential information and trade
secrets. The terms confidential information and trade secrets are
defined in the Lasser Employment Agreement as including, without
limitation, “(i) the terms of any agreement between ACS and any
employee, customer or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product development
ideas and strategies, (v) personnel training and development
programs, (vi) financial results, (vii) strategic plans and demographic
analysis, (viii) proprietary computer and systems software, and (ix)
any nonpublic information concerning ACS, its employees, suppliers
or customers.” Confidential Information pursuant to this definition
includes, but is not limited to: price lists, customer lists, drawings,
engineering material, costing programs, engineering design programs,
manufacturing process technology, application design, financial
information, as well as the computer files which were introduced as
evidence as Plaintiff’s exhibits 7, 8, and 9 by Plaintiff’s forensic
expert, Mr. Dennis Williams, and that are a part of the court’s record
from the July 25, 2013, oral hearing on AMACS’s temporary
injunction;
(b) Defendant is restrained from directly or indirectly disclosing,
copying or otherwise reproducing, or giving others access to any of
AMACS confidential information and trade secrets;
(c) Defendant is restrained for a period of two (2) years beginning
June 3, 2013, from directly, indirectly, or by action in concert with
7
others soliciting sales of any competing goods to any customers of
AMACS.
Lasser now appeals the May 28, 2014 injunctive order, identifying three
issues. He asserts that the order does not comply with Rule of Civil Procedure 683
and argues that AMACS has failed to show its entitlement to the temporary
injunction because the evidence does not support it.
A. Standard of Review
The only question before the trial court in a temporary injunction hearing is
whether the applicant is entitled to preservation of the status quo of the subject
matter of the suit pending trial on the merits. Butnaru v. Ford Motor Co., 84
S.W.3d 198, 204 (Tex. 2002); Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978).
To be entitled to a temporary injunction, the applicant for such must plead and
prove the following three specific elements: (1) a cause of action against the
defendant; (2) a probable right to the relief sought; and (3) a probable, imminent,
and irreparable injury in the interim. Butnaru, 84 S.W.3d at 204.
Whether to grant or deny a temporary injunction is within the trial court’s
sound discretion. Id. On appeal, we do not review the merits of the underlying
case. Davis, 571 S.W.2d at 861. Instead, we determine whether the trial court
abused its discretion in granting or denying the relief. Id. at 862.
8
Generally, a trial court abuses its discretion only if it reaches a decision so
arbitrary and unreasonable that it amounts to a clear and prejudicial error of law or
if it clearly fails to correctly analyze or apply the law. Intercontinental Terminals
Co. v. Vopak N. Am., Inc., 354 S.W.3d 887, 892 (Tex. App.—Houston [1st Dist.]
2011, no pet.). A trial court abuses its discretion in granting or denying a
temporary injunction when it misapplies the law to the established facts or when
the record fails to reasonably support the conclusion that the applicant has a
probable right of recovery. City of Lubbock v. Coyote Lake Ranch, LLC, No. 07–
14–00006–CV, 2014 WL 2810419, at * 3 (Tex. App.—Amarillo July 10, 2014, no
pet.) (citing State v. Sw. Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975)). Given
the abuse of discretion standard, we review the evidence submitted to the trial
court in the light most favorable to the court’s ruling, draw all legitimate inferences
from the evidence, and defer to the trial court’s resolution of conflicting evidence.
Becker v. BFE Dev. Corp., No. 02–13–00424–CV, 2014 WL 1875850, at *2 (Tex.
App.—Fort Worth May 8, 2014, no pet.) (mem. op.); see EMSL Analytical, Inc. v.
Younker, 154 S.W.3d 693, 696 (Tex. App.—Houston [14th Dist.] 2004, no pet.).
B. Compliance with Rule 683
In his first issue, Lasser avers that the temporary-injunction order should be
reversed because it does not comply with Rule of Civil Procedure 683. See TEX.
R. CIV. P. 683. He asserts that the temporary injunction does not meet Rule 683’s
9
specificity requirement and that the injunction’s third provision, Part (c), prohibits
“lawful activity.” See id.
1. Legal Principles
The law requires that an injunctive order comply with Rule of Civil
Procedure 683. See id.; Interfirst Bank San Felipe, N.A. v. Paz Constr. Co., 715
S.W.2d 640, 641 (Tex. 1986). The requirements of Rule 683 are mandatory and
must be strictly followed. See Interfirst Bank San Felipe, 715 S.W.2d at 641; see
also Indep. Capital Mgmt., L.L.C. v. Collins, 261 S.W.3d 792, 795 (Tex. App.—
Dallas 2008, no pet.) (“A trial court abuses its discretion by issuing a temporary
injunction order that does not comply with the requirements of rule 683.”).
Rule 683 provides, “Every order granting an injunction . . . shall set forth the
reasons for its issuance; shall be specific in terms; shall describe in reasonable
detail and not by reference to the complaint or other document, the act or acts
sought to be restrained.” TEX. R. CIV. P. 683. The purpose of Rule 683’s
specificity requirement is to ensure that parties are adequately informed of the acts
they are enjoined from doing and the reasons for the injunction. Layton v. Ball,
396 S.W.3d 747, 751 (Tex. App.—Tyler 2013, no pet.); El Tacaso, Inc. v. Jireh
Star, Inc., 356 S.W.3d 740, 744 (Tex. App.—Dallas 2011, no pet.). For this
reason, “[A]n injunction decree must be as definite, clear and precise as possible
and when practicable it should inform the defendant of the acts he is restrained
10
from doing, without calling on him for inferences or conclusions about which
persons might well differ and without leaving anything for further hearing.”
Villalobos v. Holguin, 208 S.W.2d 871, 875 (Tex. 1948); see Webb v. Glenbrook
Owners Ass’n, 298 S.W.3d 374, 384 (Tex. App.—Dallas 2009, no pet.) (“The law
demands clear and complete orders granting injunctions.”).
This does not mean, however, that an injunction order must specifically
enumerate every possible act that might constitute an unauthorized practice. See
San Antonio Bar Ass’n v. Guardian Abstract & Title Co., 291 S.W.2d 697, 702
(Tex. 1956). “A court order need not be ‘full of superfluous terms and
specifications adequate to counter any flight of fancy a contemner may imagine in
order to declare it vague.’” Drew v. Unauthorized Practice of Law Comm., 970
S.W.2d 152, 156 (Tex. App.—Austin 1998, pet. denied) (quoting Ex parte
McManus, 589 S.W.2d 790, 793 (Tex. Civ. App.—Dallas 1979, no writ)). Instead,
“[t]he injunction must be in broad enough terms to prevent repetition of the evil
sought to be stopped” even when the conduct takes a “somewhat different form
calculated to circumvent the injunction as written.” Guardian Abstract & Title
Co., 291 S.W.2d at 702.
Nonetheless, “[t]he injunction must spell out the details of compliance in
clear, specific and unambiguous terms so that such person will readily know
exactly what duties or obligations are imposed upon him.” Drew, 970 S.W.2d at
11
156. We have recognized “the general rule that an injunctive decree should inform
a defendant of the acts he is restrained from doing, without calling on him for
inferences or conclusions about which persons might well differ and without
leaving anything for further hearing.” Hellenic Inv., Inc. v. Kroger Co., 766
S.W.2d 861, 866 (Tex. App.—Houston [1st Dist.] 1989, no writ); see Rubin v.
Gilmore, 561 S.W.2d 231, 235–36 (Tex. Civ. App.—Houston [1st Dist.] 1977, no
writ). In addition, an injunctive order “should not be framed so broadly as to
prohibit the enjoyment of lawful rights.” Hellenic Inv., 766 S.W.2d at 866. When
“a party’s acts are divisible, and some acts are permissible and some are not, an
injunctive decree should not issue to restrain actions that are legal . . . .” Id. at 867.
2. Parts (a) and (b): Trade Secrets and Confidential Information
Parts (a) and (b) of the July 25, 2013 order read as follows:
(a) Defendant is ordered to return to AMACS, and to cease and desist
from using, any of AMACS’s confidential information and trade
secrets. The terms confidential information and trade secrets are
defined in the Lasser Employment Agreement as including, without
limitation, “(i) the terms of any agreement between ACS and any
employee, customer or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product development
ideas and strategies, (v) personnel training and development
programs, (vi) financial results, (vii) strategic plans and demographic
analysis, (viii) proprietary computer and systems software, and (ix)
any nonpublic information concerning ACS, its employees, suppliers
or customers.” Confidential Information pursuant to this definition
includes, but is not limited to: price lists, customer lists, drawings,
engineering material, costing programs, engineering design programs,
manufacturing process technology, application design, financial
information, as well as the computer files which were introduced as
12
evidence as Plaintiff’s exhibits 7, 8, and 9 by Plaintiff’s forensic
expert, Mr. Dennis Williams, and that are a part of the court’s record
from the July 25, 2013, oral hearing on AMACS’s temporary
injunction;
(b) Defendant is restrained from directly or indirectly disclosing,
copying or otherwise reproducing, or giving others access to any of
AMACS confidential information and trade secrets . . . .
Lasser asserts that Parts (a) and (b) of the order do not comply with Rule 683
because they are not sufficiently specific to inform him of the prohibited conduct.
Lasser complains that the definitions of “confidential information” and “trade
secrets” are overly broad because they contain the phrases “including, without
limitation” and “includes but is not limited to.” Lasser also asserts that the
definitions do not limit the categories of information to confidential information
that Lasser acquired through his employment with AMACS. We disagree with
Lasser’s assertions.
AMACS brought this suit to prevent Lasser and his new employer from
benefitting from its proprietary information, which AMACS alleges Lasser
acquired through his employment with ACS and AMACS. It is true that the
injunction does not specifically define every item comprising a trade secret or
confidential information; however, under the previously discussed standards, this
level of detail is not required. Lockhart v. McCurley, No. 10–09–00240–CV, 2010
WL 966029, at *4 (Tex. App.—Waco Mar. 10, 2010, no pet.) (mem. op.).
13
To satisfy the requirement that an injunction order be “specific in terms,” the
order “must be as definite, clear and precise as possible and when practicable it
should inform the defendant of the acts he is restrained from doing . . . .”
Guardian Abstract & Title Co., 291 S.W.2d at 702; see TEX. R. CIV. P. 683; Layton
v. Ball, 396 S.W.3d 747, 752 (Tex. App.—Tyler 2013, no pet.). This is balanced
with the practicality that an injunction “must be in broad enough terms to prevent
repetition of the evil sought to be stopped.” Guardian Abstract & Title Co., 291
S.W.2d at 702; see Lockhart, 2010 WL 966029, at *4.
Here, the order makes clear the prohibited conduct by listing and describing
specific categories and examples of information that comprise “trade secrets” and
“confidential information.” The specific examples of the items comprising “trade
secrets” and “confidential information,” when read in the context of the suit,
provided Lasser with adequate notice of the information that he is prohibited from
using or disclosing.3 See IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d
191, 201–02 (Tex. App.—Fort Worth 2005, no pet.) (holding that order which
prohibited defendant from using “Bell trade secrets and confidential information”
was sufficiently specific because injunction as a whole made it clear that this
3
The May 28, 2014 injunctive order stands in contrast to the July 25, 2013 order,
which we held did not comply with Rule 683. While the current order specifically
lists and defines the type of information that comprises trade secrets and
confidential information, the previous order made no attempt to define these
terms. See Lasser, 2014 WL 527539, at *4–5.
14
phrase meant “information pertaining to Bell’s 206B and OH–58 helicopter
blades”). The order leaves nothing to conjecture. See Lockhart, 2010 WL 966029,
at *4 (holding injunction adequately informed defendant of prohibited conducted
even though terminology used in order was not defined).
Lasser also complains that the order improperly defines “confidential
information” to include “the computer files which were introduced as evidence as
Plaintiff’s Exhibits 7, 8, and 9 by Plaintiff’s forensic expert” during the July 25,
2013 hearing. Exhibit 7 identifies the computer files that AMACS’s forensic
computer expert, Dennis Williams, had determined were downloaded by Lasser
from his company laptop. Williams testified that Exhibit 8 shows the “link files”
that he discovered on Lasser’s laptop, which assisted him in determining what data
had been copied from the laptop onto an external USB flash drive. Williams
explained that Exhibit 9 contained the “listing of the index buffer information from
Mr. Lasser’s boot drive” on his laptop. Williams used the index buffer to
determine whether Lasser had moved files from his laptop to an external USB
device. Thus, these three exhibits provided a complete picture of the electronic
information downloaded by Lasser to his laptop and transferred to an external
device. If anything, these exhibits provided more detail than necessary.
Lasser indicates that the computer files identified by these exhibits contain
information that is not confidential because it was not acquired through his
15
employment with AMACS. Lasser asserts that the trial court could not limit his
right to lawfully use such non-confidential information. To support his assertion,
Lasser does not, however, identify what information contained in the more than
one thousand computer files he downloaded from his former employer’s computer
system is not confidential or proprietary. Thus, we cannot determine whether the
trial court’s inclusion of such items in the definition of confidential information is
overly broad. 4 See Noell v. City of Carrollton, 431 S.W.3d 682, 713 (Tex. App.—
Dallas 2014, pet. filed) (“[W]ithout a discussion of the evidence offered at trial, it
is impossible for this Court to appropriately evaluate the scope of the injunction in
the context of the wrong the trial court was attempting to remedy.”)
Lasser also asserts that the orders’ reference to Exhibits 7, 8, and 9 violate
Rule 683’s specificity requirement because the order references the documents
without attaching or incorporating them into the order. See TEX. R. CIV. P. 683.
(providing that a temporary injunction shall be specific in its terms and shall
describe in reasonable detail, not by reference to the complaint or other document,
the act or acts to be restrained). However, courts have held that referencing
4
Lasser asserts that we previously held, in the appeal of the July 25, 2013 order,
that Exhibit 7 contained non-confidential items. Lasser misreads our earlier
opinion. In that appeal, AMACS had requested this Court to modify the
temporary-injunction order for the purpose of crafting a definition of “confidential
information.” AMACS had pointed to Exhibit 7 and other evidence to show what
constituted its confidential information. See Lasser, 2014 WL 527539, at *4 n.2.
We declined the invitation to craft the definition from the evidence admitted at the
temporary-injunction hearing, a task better left to the trial court. See id.
16
documents in an injunction that otherwise reasonably informs of the prohibited
conduct does not violated Rule 683. See, e.g., Noell, 431 S.W.3d at 713–14;
Rugen v. Interactive Bus. Sys., Inc., 864 S.W.2d 548, 553 (Tex. App.—Dallas
1993, no writ).
Here, the injunction reasonably informs Lasser of the type of information
comprising confidential information. The injunction’s reference to Exhibits 7, 8,
and 9 serves only to give additional notice regarding the enjoined conduct. The
inclusion of the documents was not necessary to inform Lasser of the prohibited
conduct. See Noell, 431 S.W.3d at 713–14; Rugen, 864 S.W.2d at 553.
In addition, Lasser is knowledgeable about the documents’ content. The
exhibits identify the computer files and information downloaded by Lasser from
his employer’s computer system. The exhibits were admitted at the temporary-
injunction hearing attended by Lasser and his counsel. They remain part of the
record. Thus, under the circumstances of this case, the injunction’s reference to
the exhibits does not violate Rule 683’s specificity requirement. See Rugen, 864
S.W.2d at 553.
Lasser further asserts that the definition of “trade secrets” and “confidential
information” should be limited to the intellectual property rights acquired by
AMACS from ACS, as defined in the Asset Purchase Agreement. However, in
making this assertion, Lasser does not account for the fact that he was employed by
17
AMACS for over one year before he resigned. The evidence showed that Lasser
had access to AMACS’s confidential and trade secret information during his
employment. The evidence does not show that Lasser’s access was limited to only
ACS-related information nor does the record show that AMACS claims only that
Lasser has taken ACS information.
Moreover, AMACS does not limit its claims to a breach of the
confidentiality provision in the Employment Agreement. AMACS asserts a claim
against Lasser for misappropriation of its trade secrets. It is well established that
“a former employee is precluded from using for his own advantage, and to the
detriment of his former employer, confidential information or trade secrets
acquired by or imparted to him in the course of his employment.” Id. at 551. In
short, AMACS is not limited to protecting only the intellectual property rights it
acquired from ACS.
Finally, Lasser complains that the order fails to comport with Rule 683’s
specificity requirement because it obligates him to return AMACS’s trade secrets
and confidential information when the parties have stipulated that he has returned
such information to AMACS. As stated, an injunction order must balance being
sufficiently specific to inform the defendant of the acts of which he is enjoined
with being sufficiently broad to prevent the repetition of the offending conduct.
See Guardian Abstract & Title Co., 291 S.W.2d at 702; Layton, 396 S.W.3d at
18
752. Including a specific requirement that Lasser has already performed does not
serve to undermine the specificity of the injunction but does serve to prevent the
need to revise the order should it be discovered, pending trial, that Lasser has any
additional confidential information.
We conclude that Parts (a) and (b) of the injunctive order sufficiently satisfy
the requirements of Rule 683. See TEX. R. CIV. P. 683.
3. Part (c): Non-Solicitation Requirement
Lasser also asserts that the non-solicitation order found in Part (c) of the
injunction does not comply with Rule 683. Part (c) provides as follows:
(c) [Lasser] is restrained for a period of two (2) years beginning June
3, 2013, from directly, indirectly, or by action in concert with others
soliciting sales of any competing goods to any customers of AMACS.
Part (c) corresponds to the following non-solicitation provision found in
Section 10 of the ACS Employment Agreement:
10. Nonsolicitation of Customers. For a period of two (2) years after
voluntary or involuntary termination of this Agreement for any reason
the Employee will not, directly or indirectly, or by action in concert
with others, engage in the solicitation of sales of competing good[s] to
customers of ACS.
Lasser avers that Part (c) of the order fails to comply with Rule 683 because
it is too broad in its temporal scope and prohibits Lasser from engaging in the
lawful activity of soliciting customers for a period longer than that required under
Section 10. Lasser asserts that the evidence does not support the start date of June
19
3, 2013 found in Part (c). Lasser acknowledges that June 3, 2013 was the date that
he resigned from AMACS, but he submits that the two-year non-solicitation period
began to run when his employment with ACS was terminated at the end of
February 2012, before he became AMACS’s employee on March 1, 2012.
Lasser relies on the following provision of the Employment Agreement as
governing when the two-year non-solicitation period mentioned in Section 10
began to run:
2. Term and Termination. Employee’s employment under this
Agreement shall be on a day-to-day basis terminable at the will of
either Party [ACS or Lasser] without notice. Upon the effective date
of such termination, Employee’s employment hereunder shall cease. .
. . The rights of the parties to terminate this Agreement as provided
for in this Section 2 shall prevail over any other term or understanding
to the contrary.
Lasser also points to the letter he received from ACS, dated February 6,
2012, which stated, “This letter serves as notice of termination of your
Employment Agreement, effective as of March 1, 2012.” Lasser further relies on
evidence showing that, from December 21, 2011 through the end of February
2012, ACS employees were leased to AMACS under the Asset Purchase
Agreement. During this period, the evidence showed that, although leased to
AMACS, the employees, including Lasser, remained employees of ACS.
In addition, Lasser points to AMACS’s letter, which offered Lasser
employment with AMACS effective March 1, 2014. The letter stated that Lasser’s
20
employment with ACS “will cease effective February 29, 2012.” The letter also
stated that it was “not an employment agreement.”
AMACS counters that the two-year non-solicitation period was not triggered
when Lasser left ACS’s employment at the end of February 2012 because AMACS
had purchased and assumed the ACS Employment Agreement under the Asset
Purchase Agreement, which had been signed on December 21, 2011. For this
reason, AMACS asserts that the Employment Agreement was still in effect when
Lasser resigned from AMACS on June 3, 2013. AMACS avers, “Since the
assignment [of the Employment Agreement] occurred before the purported
termination [by ACS], ACS did not have the power to terminate the contract and
assignment was valid.”
In support of its position, AMACS cites the following provision in the Asset
Purchase Agreement:
1.1 Purchase and Sale. Subject to the terms and conditions of
this Agreement, Sellers shall, or shall cause its Affiliates to, sell,
transfer, assign and deliver to Purchaser, on the Closing Date, free and
clear of any Encumbrance, all of Sellers’ and its Affiliates’ right, title
and interest in and to all of the assets, properties and rights, other than
the Excluded Assets, used or held for use by or in connection with the
Business (collectively, the “Acquired Assets”), including the
following:
....
(d) Assumed Contracts . . . .
21
Section 12 of the Asset Purchase Agreement defines “Assumed Contracts”
to mean “all contracts, agreements, instruments and other arrangements, written or
oral, specifically described on Schedule l.l(d).” Significantly, Schedule 1.1(d)
provides, “The employment agreements listed below shall be assumed and
assigned as of the termination of the Leasing Period . . . .” (Emphasis added.).
The Employment Agreement between Lasser and ACS was listed in the
schedule as an “Assumed Contract.” The evidence showed that the period in
which Lasser was an employee leased to AMACS ended on February 29, 2012.
That was the last date that the established evidence shows Lasser as an ACS
employee.
Under the terms of the Asset Purchase Agreement, the assignment and
assumption of Lasser’s Employment Agreement were not effective when the Asset
Purchase Agreement was signed on December 21, 2011, as AMACS asserts.
Rather, pursuant to Asset Purchase Agreement, the assignment and assumption did
not take effect until the leasing period’s termination. Pursuant to ACS’s letter to
Lasser, the Employment Agreement was terminated when the leasing period
ended. Thus, when the assignment and assumption became effective, the
Employment Contract was already terminated.
For this reason, we conclude that the two-year non-solicitation period, found
in Section 10 of the Employment Agreement, began to run no later than March 1,
22
2012. As a result, the non-solicitation period ended no later than March 1, 2014.
Because it restrains Lasser from engaging in the lawful activity of soliciting
customers beyond the end of the non-solicitation period, Part (c) of the injunction
is impermissibly broad. See Hellenic Inv., 766 S.W.2d at 867 (reversing injunctive
decree that impermissibly limited defendant’s ability to operate lawful business
enterprise); Norton v. Integral Corp., 584 S.W.2d 932, 935 (Tex. Civ. App.—
Austin 1979, no writ) (recognizing that an injunction is too broad if it prohibits
former employee from engaging in business activities in which the employer is not
engaged); see also Tex. R. Civ. P. 683. We hold that the trial court did not have
discretion to render Part (c) of the May 28, 2014 injunctive order. See ICON
Benefit Adm’rs II, L.P. v. Abbott, 409 S.W.3d 897, 902 (Tex. App.—Austin 2013,
pet. denied) (“A trial court abuses its discretion in granting or denying a temporary
injunction when it misapplies the law to the established facts.”)
We overrule Lasser’s first issue as to Parts (a) and (b) of the injunctive order
but sustain the issue as to Part (c).
C. Entitlement to Injunctive Relief
In his second and third issues, Lasser asserts that AMACS has not proven its
entitlement to injunctive relief against Lasser. Because we have held that the trial
court did not have the discretion to render Part (c) of the temporary injunction, we
limit our discussion of issues two and three to Parts (a) and (b) of the order. Those
23
two provisions prohibit Lasser from using or disseminating AMACS’s trade
secrets and confidential information.
On appeal, Lasser correctly points out that an applicant must plead and
prove three specific elements to obtain a temporary injunction: (1) a cause of
action against the defendant; (2) a probable right to the relief sought; and (3) a
probable, imminent, and irreparable injury in the interim time period. Butnaru, 84
S.W.3d at 204. Lasser claims that AMACS’s breach of contract claim cannot
support the temporary injunction because, as he alleges, there was no contract
between Lasser and AMACS. For this reason, Lasser asserts that AMACS cannot
show any of the required elements to obtain a temporary injunction; that is,
AMACS cannot show a breach of contract claim against Lasser, a probable right to
relief under that claim, or that it will suffer a probable, imminent, and irreparable
injury relating to that claim.
In his briefing, Lasser does not address whether AMACS’s other pleaded
causes of action support Parts (a) and (b) of the temporary injunction. See Britton
v. Tex. Dep’t of Criminal Justice, 95 S.W.3d 676, 681 (Tex. App.—Houston [1st
Dist.] 2002, no pet.) (requiring appellant to attack all independent bases or grounds
supporting challenged judgment). In its live pleading, AMACS not only asserted a
breach-of-contract claim against Lasser, it also asserted claims for
misappropriation of trade secrets and conversion. The trial court’s May 28, 2014
24
injunctive order does not expressly base the restraint of Lasser’s use and
dissemination of AMACS’s trade secret and confidential information on
AMACS’s breach-of-contract claim. To the contrary, among its findings, the trial
court stated in the temporary-injunction order, as follows: “The Court finds that
[Lasser’s] misappropriation of [AMACS’s] trade secrets and confidential
information will likely result in damages to [AMACS].”5
Courts have affirmed temporary injunctions that restrain a former employee
from using or disseminating its past employer’s trade secrets and confidential
information based on a misappropriation of trade secrets claim. 6 See, e.g., Hill v.
McLane Co. Inc., No. 03–10–00293–CV, 2011 WL 56061, at *4 (Tex. App.—
Austin Jan. 5, 2011, no pet.) (mem. op.); Skinner v. DVL Holdings, L.L.C., No. 05–
03–00785–CV, 2004 WL 113095, at *2 (Tex. App.—Dallas 2004, no pet.) (mem.
5
Although the trial court’s definition of “trade secret” and “confidential
information” references the Employment Agreement’s definition of these terms,
the complete definition found in the temporary injunction is not limited to that
agreement’s definition. Indeed, AMACS presented evidence of what it considered
to be its confidential information. For example, AMACS’s CEO testified
regarding what comprises AMACS’s confidential information, discussing specific
examples of such information. The CEO also testified that the computer files
downloaded by Lasser, as reflected in Exhibit 7, contain AMACS’s confidential
and proprietary information.
6
Courts have identified the following as the elements of a trade secret
misappropriation claim: (1) the existence of a trade secret owned by the plaintiff;
(2) breach of a confidential relationship or improper discovery of a trade secret;
(3) “use” of the trade secret; and (4) injury. Tex. Integrated Conveyor Sys., Inc. v.
Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 366–67 (Tex. App.—Dallas
2009, pet. denied); Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d
452, 463 (Tex. App.—Austin 2004, pet. denied).
25
op.). An employer is not generally entitled to an injunction preventing a former
employee from soliciting the employer’s clients in the absence of an enforceable
agreement not to compete. Rugen, 864 S.W.2d at 551. However, a former
employee is precluded from using for his own advantage, and to the detriment of
his former employer, confidential information or trade secrets acquired by or
imparted to him in the course of his employment, even without a contract. Id.
Thus, we conclude that Parts (a) and (b) of the temporary injunction, which
prohibit Lasser from using or disseminating AMACS’s trade secrets and
confidential information, are supportable by AMACS’s misappropriation of trade
secrets claim, which Lasser has not challenged. See Hill, 2011 WL 56061, at *4;
Skinner, 2004 WL 113095, at *2. We hold that Lasser has not shown that the trial
court abused its discretion in rendering Parts (a) and (b) of the temporary
injunction. See Britton, 95 S.W.3d at 681.
We overrule Lasser’s second and third issues.
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Conclusion
We modify the trial court’s May 28, 2014 temporary-injunction order by
deleting Part (c) of the order, which prohibits Lasser from soliciting AMACS’s
customers. We affirm the order, as modified.7
Laura Carter Higley
Justice
Panel consists of Justices Higley, Bland, and Sharp.
7
See TNT Motorsports, Inc. v. Hennessey Motorsports, Inc., 965 S.W.2d 18, 25
(Tex. App.—Houston [1st Dist.] 1998, pet. dism’d) (recognizing that appellate
court may modify an overly broad temporary injunction).
27