452 F.Supp.3d 561
S.D. Tex.2020Background
- Weatherford (oilfield artificial-lift business) contracted with Siteworks (supplier) under a 2016 NDA for confidential information relating to concrete bases and related services.
- Siteworks' owner Eric Binstock allegedly formed Powder River Hydraulics LLC and Elite Lift Solutions LLC and, with several former Weatherford employees, began competing in the same market using Weatherford's confidential information.
- Weatherford sued Siteworks, Binstock, Powder River, and Elite Lift for breach of contract (NDA), tortious interference (NDA, employment contracts, customer contracts), misappropriation of trade secrets, breach of fiduciary duty, and sought damages plus a permanent injunction.
- Defendants moved to dismiss for lack of personal jurisdiction, improper venue, and failure to state claims; they alternatively sought transfer to North Dakota.
- The NDA contained a forum-selection clause designating Harris County, Texas (Houston) and a survival clause for confidentiality obligations; Weatherford argued the clause still bound all defendants, including non-signatories.
- The court denied dismissal for lack of personal jurisdiction/venue (enforcing the forum-selection clause and binding non-signatories under the "closely related" doctrine), granted partial Rule 12(b)(6) relief (limited breach claim and dismissed fiduciary-duty claim), and otherwise denied dismissal including Weatherford's request for injunctive relief at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Survival/enforceability of NDA forum clause | Clause covers disputes "arising out of or related in any way" and survives termination for interpretation/enforcement | Clause expired on third anniversary and survival clause doesn't expressly list forum clause | Forum clause survives; applies to disputes arising from the NDA |
| Binding non-signatories to forum clause | Binstock, Powder River, Elite Lift are Siteworks affiliates/owner and thus bound ("Supplier Parties") | Non-signatories not bound; ownership alone insufficient | Non-signatories bound under closely-related/foreseeability theory given alleged intertwined conduct |
| Personal jurisdiction / venue | Forum clause waives jurisdictional objections; Texas forum proper | Clause expired / doesn't bind non-signatories; lack of contacts | Personal jurisdiction and venue in Houston enforced via forum clause; motion to dismiss/transfers denied |
| Scope of forum clause to tort claims (Count III) | Broad "arising out of or related to" language covers tortious interference claims tied to NDA misappropriation | Employment contracts unrelated to the NDA | Clause applies to Count III because tort claims share operative facts and originate in the NDA |
| Standing to enforce NDA | Weatherford entities identified in NDA (Weatherford Artificial Lift + affiliates) have enforcement rights | Only the signatory (Weatherford Artificial Lift) has standing | Weatherford International and Weatherford U.S. are affiliates/third-party beneficiaries and have standing alongside Weatherford Artificial Lift |
| Breach-of-contract liability of non-signatories | Affiliates defined as "Supplier Parties" and should be liable | Non-signatories (Binstock, Powder River, Elite) never agreed to contract; cannot be held liable absent assent/alter-ego | Breach claim may proceed only against signatory Siteworks; dismissed as to Binstock, Powder River, Elite |
| Tortious interference with the NDA by Binstock (Count II) | Binstock aided wrongful use of confidential info and interfered with NDA | Binstock is Siteworks' agent/owner and not a stranger to the contract, so cannot tortiously interfere | Claim against Binstock for interference with the NDA dismissed (agent/principal bars interference claim absent actions outside agency scope) |
| Tortious interference with employee and customer contracts (Counts III & IV) | Defendants poached employees and used confidential info to solicit customers and undercut Weatherford | Post-employment covenants allegedly unenforceable (North Dakota law) and factual sufficiency challenged | Claims survive: court declines to decide applicable law now and finds sufficient factual allegations to state interference claims |
| Breach of fiduciary duty (Count VII) | NDA imposes duties of care/loyalty/candor that create fiduciary relationship | NDA does not create formal fiduciary status; no fiduciary relationship as a matter of law | Fiduciary-duty claim dismissed; non-disclosure agreement alone insufficient to create fiduciary relationship |
| Permanent injunction (trade-secrets-based non-compete relief) | UTSA permits injunctions to prevent use of misappropriated trade secrets; narrow tailoring requested to bar competition with 24 customers for one year | Broad non‑compete is an unlawful restraint on trade | Request for injunctive relief not dismissed at this stage; scope to be assessed on merits later |
Key Cases Cited
- McFadin v. Gerber, 587 F.3d 753 (5th Cir. 2009) (personal-jurisdiction analysis and prima facie burden on plaintiff)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (general jurisdiction requires defendant be "at home" in forum)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (distinguishing general and specific jurisdiction)
- Walk Haydel & Associates, Inc. v. Coastal Power Production Co., 517 F.3d 235 (5th Cir. 2008) (specific-jurisdiction purposeful-direction test)
- In re Lloyd's Register North America, Inc., 780 F.3d 283 (5th Cir. 2015) (enforcement of forum-selection clauses against non-signatories under limited theories)
- Atlantic Marine Construction Co. v. United States District Court, 571 U.S. 49 (2013) (forum-selection clause enforceability and deference in venue questions)
- Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) (broad construction of forum clauses phrased "in connection with")
- G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502 (Tex. 2015) (doctrines for binding non-signatories to contract terms)