Midstate Environmental Services, LP v. John Atkinson and 5A Environmental Services, LLC
13-17-00190-CV
| Tex. App. | Dec 14, 2017Background
- Midstate employed Atkinson as a route driver for ~19 years; he had access to customer lists, pricing, and solicited customers.
- In June 2012 Atkinson signed a Retention Agreement and a Non-Compete Agreement that barred competition and solicitation during employment and for one year after; both agreements stated he remained an at‑will employee.
- In March 2017 Midstate discovered Atkinson had business cards and a DOT permit application for 5A Environmental Services and believed he was starting a competing business.
- Midstate sued for breach of contract, trade-secret misappropriation, and tortious interference and obtained a TRO; after a temporary injunction hearing the trial court denied injunctive relief and issued findings that Midstate failed to prove irreparable injury and that the Non‑Compete supplanted the Retention Agreement.
- On accelerated interlocutory appeal Midstate challenged only the denial of the temporary injunction; the Court of Appeals affirmed, holding the trial court did not abuse its discretion because evidence supported the finding that damages would adequately compensate Midstate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Midstate proved entitlement to a temporary injunction (three‑part test: cause of action, probable right, probable/irreparable injury) | Midstate asserted it had a cause of action and would suffer irreparable harm (including reputational harm and loss of trade‑secrets value) not readily compensable in money | Atkinson argued Midstate had an adequate remedy at law because any losses (lost customers/revenue) could be calculated and compensated | Held: Court affirmed denial — dispositive: Midstate failed to show irreparable injury; some evidence supported trial court’s finding damages would be adequate |
| Whether the non‑compete had adequate consideration/supporting facts relevant to injunction | Midstate relied on agreements and payments as consideration supporting enforcement | Atkinson pointed to at‑will status, prior knowledge of customer lists, and limited additional consideration (one training) as weakening enforceability | Held: Court declined to decide ultimate enforceability; noted trial court found insufficient additional consideration but affirmed denial on irreparable‑harm ground |
Key Cases Cited
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (elements and discretionary nature of temporary injunction)
- Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993) (purpose of temporary injunction and standards)
- Beaumont Bank v. Buller, 806 S.W.2d 223 (Tex. 1991) (abuse‑of‑discretion review of interlocutory rulings)
- Sun Oil Co. v. Whitaker, 424 S.W.2d 216 (Tex. 1968) (temporary injunction element requirements)
