589 S.W.3d 177
Tex. App.2018Background
- Clements Fluids developed proprietary “salt systems” (formulas, mixing protocols, equipment specs) and required employees to sign NDAs and non-solicitation clauses.
- Appellants Morgan, McAnally, and Laney are former Clements employees who left to work for competitors (Greenwell and ChemCo); Greenwell launched a salt-systems operation shortly after hiring McAnally and Morgan and then performed work for Clements’ customer Pioneer.
- Clements sued for breach of contract and misappropriation of trade secrets, obtained an ex parte TRO, and sought a temporary injunction and damages; Appellants moved to dismiss under the Texas Citizens Participation Act (TCPA).
- The trial court denied the TCPA motion and granted a temporary injunction broadly restricting appellants from disclosing or using Clements’ confidential information and from working on salt systems.
- On appeal, the court examined (1) whether the TCPA applied and whether Clements presented clear-and-specific evidence of a prima facie TUTSA claim, and (2) whether the temporary injunction was supported by evidence and sufficiently narrow.
Issues
| Issue | Plaintiff's Argument (Clements) | Defendant's Argument (Morgan/McAnally/Laney) | Held |
|---|---|---|---|
| Whether TCPA applies to Clements’ misappropriation claim | TCPA rights waived by NDAs; claim not based on protected communications | Appellants: their communications with new employers are protected (association/speech) and TCPA applies | TCPA applied in part — appellants met step one (exercise of association/speech); NDAs not resolved at step one |
| Whether Clements proved a prima facie TUTSA claim (ownership, misappropriation, injury) | Clements: proprietary salt-systems information, training, circumstantial evidence (timing of hires, Greenwell’s launch, loss of Pioneer) establish ownership, misuse, and injury | Appellants: deny using/disclosing secrets; argue circumstantial evidence insufficient | Against Morgan and McAnally: Clements met clear-and-specific prima facie proof for ownership, misappropriation, and injury; For Laney: insufficient evidence — claim dismissed against him |
| Whether trial court must award TCPA fees to defendants | Clements: met prima facie against two defendants so TCPA dismissal not warranted for fees | Appellants: Laney should get fees because his claim was dismissed under TCPA | Remanded to trial court to determine fees/costs for Laney under TCPA (because dismissal rendered as to him) |
| Whether temporary injunction was supported and appropriately tailored | Clements: circumstantial evidence supports probable right and imminent irreparable harm; injunction necessary to protect secrets | Appellants: insufficient evidence of actual use; injunction overbroad and prevents lawful competition | Injunction upheld as to Morgan and McAnally (after narrowing Restriction 3 to bar use/disclosure of Clements’ confidential info when performing salt systems); injunction dissolved as to Laney for lack of probable right and evidence |
Key Cases Cited
- In re Lipsky, 460 S.W.3d 579 (Tex. 2015) (TCPA two-step burden-shifting framework and definition of clear-and-specific evidence)
- ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) (apply plain meaning of TCPA rather than First Amendment analysis)
- Rosenthal v. Doss, 529 S.W.3d 429 (Tex. 2017) (TCPA consequences and procedure for attorney’s fees on partial dismissals)
- Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.—Austin 2017) (application of TCPA to business-competition contexts)
- GE Betz, Inc. v. Moffitt-Johnston, 885 F.3d 318 (5th Cir. 2018) (circumstantial-evidence limits in trade-secrets context referenced and contrasted)