803 F. Supp. 2d 610
S.D. Tex.2011Background
- Alliantgroup, L.P. sued former employee Jeffrey Feingold in Texas federal court, removing based on diversity.
- Feingold signed an employment agreement containing a covenant not to compete, nondisclosure, and a retention bonus forfeiture provision.
- The court entered a preliminary injunction reforming the noncompete to limit it to clients and territory where Feingold worked, until January 13, 2010.
- Feingold moved for summary judgment on Alliantgroup's claims; the court granted in part and denied in part after considering the record and evidence.
- The court ultimately granted summary judgment on several claims (breach of nondisclosure, conversion, fiduciary duties, tortious interference, CFAA, and civil conspiracy) and ordered that only the bonus-repayment claim remained for trial/decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the employment agreement under statute of frauds | Alliantgroup argues the one-year term must be extended in writing. | Feingold argues the contract is unenforceable without a written renewal. | Contract enforceable; continuation implied by continued employment. |
| Availability of damages for breach of the reformed noncompete | Alliantgroup seeks damages for Feingold's breach of the noncompete. | Section 15.52 preempts nonstatutory remedies; damages precluded after reformation. | Damages precluded; only injunctive relief available post-reformation. |
| Breach of nondisclosure provision | Feingold disclosed confidential information; injuries alleged include client data and pricing. | No evidence that disclosure caused damages or actual loss to Alliantgroup. | Summary judgment for Feingold; no damages shown. |
| Viability of other tort claims (misappropriation, conversion, fiduciary duty, tortious interference, CFAA, civil conspiracy) | Feingold misused confidential information and interfered with prospective business. | Record insufficient to show damages or causation; many claims fail on merits. | All claims other than the bonus breach dismissed; Feingold granted summary judgment on these claims. |
Key Cases Cited
- Fenno v. Jacobe, 657 S.W.2d 844 (Tex.App.-Houston [1st Dist.] 1983) (one-year term may be impliedly extended by continued employment)
- Light v. Centel Cellular Co. of Tex., 883 S.W.2d 642 (Tex. 1994) (Covenants not to compete act governs remedies; preempts common-law remedies)
- Perez v. Tex. Disposal Sys., Inc., 53 S.W.3d 480 (Tex. App.-San Antonio 2001) (when covenant reformed, damages may be limited to injunctive relief)
- Gen. Universal Sys., Inc. v. HAL, Inc., 500 F.3d 444 (5th Cir. 2007) (six-factor test for trade secrets applies; use includes exploiting the secret)
- Guy Carpenter & Co. v. Provenzale, 334 F.3d 459 (5th Cir. 2003) (customer lists may be trade secrets; factors to determine secrecy)
- Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277 (5th Cir. 2007) (fiduciary duties in employer-employee context; duties may be altered by agreement)
- Juhl v. Airington, 936 S.W.2d 640 (Tex. 1996) (civil conspiracy requires actual unlawful means and specific intent to agree)