301 F. Supp. 3d 668
S.D. Tex.2014Background
- Michelle Moffitt founded and led GE’s Distressed Fuels Team (DFT); she resigned in Sept–Oct 2012 and immediately joined AmSpec as VP of an additives/fuels business.
- Moffitt had signed GE’s Employment and Confidential Information Agreement containing (1) non‑solicitation provisions (18 months) tied to defined "customers"/"prospective customers," confidentiality duties, and an obligation to disclose post‑employment positions; she completed an exit interview in which GE asserts she denied competing with DFT.
- AmSpec hired Moffitt and several former GE employees; AmSpec began performing cargo treatments in Nov. 2012; parties co‑sponsored a customer yacht cruise in Oct. 2012 where Moffitt appeared as AmSpec personnel.
- GE sued Moffitt and AmSpec asserting 13 causes of action (breach of covenant, trade secret misappropriation, fiduciary breach, etc.); AmSpec/Moffitt counterclaimed for business disparagement and tortious interference.
- Cross‑motions for summary judgment were filed; the court resolved multiple evidentiary objections and then adjudicated the summary judgment motions.
Issues
| Issue | GE's Argument | Defendants' Argument | Held |
|---|---|---|---|
| Enforceability of Moffitt’s non‑solicitation covenant | Covenant is valid because it limits contacts to customers/prospects Moffitt worked with (alternative to geographic limit) | Covenant is unreasonable: no geographic limit, customer definitions sweep entire corporate entities and multiple refineries, and Kurtz’s customer list is incompetent | Covenant unenforceable as written; expired before reformation; summary judgment for Defs on breach claim |
| Misappropriation of trade secrets (pricing, customer lists, trailer designs, formulations) | GE: Moffitt/AmSpec used and benefitted from GE trade secrets and pricing info | Defs: no admissible evidence of use; GE relies on inadmissible DLP report and speculation | Summary judgment for Defs; GE failed to produce admissible evidence of acquisition/use; trailer manual not a trade secret |
| Breach of fiduciary duty / fraud by nondisclosure (post‑employment intent) | GE: Moffitt concealed post‑employment intent and lied in exit interview, breaching fiduciary and fraud duties | Moffitt: no breach — permitted to prepare to compete; she disclosed or reasonably believed AmSpec not a competitor | Partial denial: summary judgment granted for Defs on most fiduciary/fraud claims but denied as to whether Moffitt concealed her post‑GE employment intentions (fact issue remains) |
| Tortious interference / unfair competition / conspiracy (GE’s tort claims and AmSpec’s counterclaims) | GE: AmSpec tortiously interfered with Moffitt’s contract; AmSpec: GE disparaged and interfered with AmSpec/Moffitt contracts/employment by filing suit and communications | Defs: restrictive covenant unenforceable so no valid interference; GE communications truthful or privileged; no damages shown by AmSpec/Moffitt | Court granted summary judgment for Defs on GE’s tortious interference and related torts; granted GE summary judgment on AmSpec’s disparagement and interference counterclaims |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burdens)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine issue for trial standard)
- Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (Tex. 2003) (business disparagement requires falsity and actual malice)
- Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) (fraud by nondisclosure framework)
- CQ, Inc. v. TXU Min. Co., L.P., 565 F.3d 268 (5th Cir. 2009) (trade secret definition and misappropriation elements)
- Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010) (nonsolicitation covenants treated as restraints subject to reasonableness analysis)