Court Opinion

ID: 3072063
Source: CourtListenerOpinion
Date Created: 2015-10-16 00:42:58.186586+00
Date Added: 2024-06-11T11:17:54.526112
License: Public Domain

In The

                                Court of Appeals
                    Ninth District of Texas at Beaumont
                            ____________________
                               NO. 09-13-00299-CV
                            ____________________

                         CHAD DICKERSON, Appellant

                                         V.

           ACADIAN CYPRESS & HARDWOODS, INC., Appellee

_______________________________________________________             ______________

                    On Appeal from the 128th District Court
                            Orange County, Texas
                         Trial Cause No. A-130124-C
________________________________________________________             _____________

                          MEMORANDUM OPINION

      Chad Dickerson asks that we dissolve a temporary injunction which, among

other restrictions, prohibits him from working for direct competitors of his former

employer and from competing with it for certain sales. We conclude the trial court

did not abuse its discretion in granting a temporary injunction to preserve the status

quo; nevertheless, because the restrictions placed on Dickerson by the trial court’s

                                          1
temporary injunction order 1 are not sufficiently specific to comply with the

requirements of Rule 683 of the Texas Rules of Civil Procedure, the order must be

dissolved. See Tex. R. Civ. P. 683. We further conclude that a remand is necessary

to allow the trial court to refine its order so that it complies with Rule 683. See

Tex. R. App. P. 43.3(a).

                                     Background

      Acadian sells hardwood lumber and related products to professional

woodworkers in the cabinet and millwork industries. In early 2012, Acadian hired

Dickerson as an outside sales representative to work with its customers in the

Houston market and to expand Acadian’s customer base. Before working for

      1
         The trial court originally signed its temporary injunction order on June 17,
2013. Subsequently, on October 14, 2013, the trial court modified its order, adding
a trial setting in March 2014. The restrictions placed on Dickerson by the modified
temporary injunction order are the same as those contained in the trial court’s
original order, and the trial court made no new findings and did not grant any
additional relief. See Tex. R. App. P. 29.5 (providing that a trial court retains
jurisdiction over interlocutory orders while an appeal is pending). Accordingly, we
treat Dickerson’s notice of appeal as an appeal from the October 14, 2013 modified
temporary injunction order; thus, Dickerson’s nineteenth issue, which complains
that the trial court failed to specify a trial setting, is now moot. See Tex. R. App. P.
27.3 (authorizing appellate courts to treat an appeal from the original order as an
appeal from the modified order); Tex. Health and Human Servs. Comm’n v.
Advocates for Patient Access, Inc., 399 S.W.3d 615, 622-25 (Tex. App.—Austin
2013, no pet.); see also Tex. R. Civ. P. 683 (requiring temporary injunction orders
to include an order setting the cause for trial on the merits).
                                           2
Acadian, Dickerson worked in the general construction industry; however, he had

not previously sold hardwood or cypress lumber products.

      Dickerson signed an employment offer letter in February 2012.

Approximately two weeks later, he and an Acadian representative signed a “Non-

Competition/Non-Solicitation Agreement.” Generally, the agreement contains a

two-year term and provides that Dickerson, after leaving Acadian’s workforce, is

prohibited from competing with Acadian in a defined sales coverage area that

generally includes Harris County, Orange County, and surrounding counties. The

agreement also prohibits Dickerson from competing with Acadian by providing

products or services to Acadian’s present and former clients.

      Acadian’s Director of Sales, John Lyons, hired Dickerson and then trained

him about selling the products carried by Acadian. While Dickerson worked for

Acadian, a period of thirteen months, Lyons personally introduced Dickerson to

many of Acadian’s clients and gave him detailed information about them. Also,

during his employment, Acadian provided Dickerson with weekly reports and lists,

which were sent by electronic mail to Dickerson’s Acadian e-mail address. In

carrying out his duties for Acadian, Dickerson utilized a mobile device that

Acadian provided to him.

                                         3
      In March 2013, Dickerson notified Lyons that he was resigning. When

Dickerson resigned, he did not immediately return the mobile device that he used

in his job. About a week after Dickerson resigned, when Acadian received

Dickerson’s mobile device, Acadian discovered that several emails containing

confidential information concerning Acadian’s client lists and sales history had

been forwarded from Dickerson’s mobile device to Dickerson’s personal email

address. During the hearing on the temporary injunction, Dickerson admitted that

no one else had access to the mobile device while he had it.

      A few weeks after he resigned, Dickerson went to work in Houston as a

sales representative selling lumber supplies for Cedar Creek, a company that

Acadian contends is one of its competitors. At the time of the temporary-injunction

hearing, Dickerson had worked for Cedar Creek for three months. During the

period he had worked for Cedar Creek, Dickerson acknowledged that he either sold

products or solicited sales from eleven persons or entities that he knew were

Acadian’s customers. Dickerson identified domestic and imported hardwoods and

plywood as the competing products that he was selling for Cedar Creek. During the

same hearing, Lyons testified that Acadian had lost sales to Dickerson’s new

employer.

                                         4
      Following the temporary injunction hearing, the trial court rendered an order

granting Acadian’s request for temporary injunctive relief. The order includes ten

findings to support the order, and then orders Dickerson to:

      • cease any communications/solicitations with Acadian Cypress &
        Hardwoods, Inc. current clients;

      • cease/stop any use or disclosures of confidential information to
        third parties including Cedar Creek, regarding confidential and/or
        proprietary information concerning customers of Acadian Cypress
        & Hardwoods, Inc.;

      • cease/stop any disclosures of confidential/proprietary information
        regarding Acadian Cypress & Hardwoods, Inc. to third parties; and

      • cease direct or indirect involvement with business which is in
        direct competition with the particular business lines of Acadian
        Cypress & Hardwoods, Inc.

      We note our jurisdiction over an interlocutory appeal that seeks appellate

review of a trial court’s order granting temporary injunctive relief. See Tex. Civ.

Prac. & Rem. Code Ann. § 51.014(a)(4) (West Supp. 2013). In nineteen issues,

Dickerson argues the trial court’s order should be dissolved.

                                Standard of Review

      We review a trial court’s interlocutory ruling on a party’s request for a

temporary injunction for abuse of discretion. Davis v. Huey, 571 S.W.2d 859, 861-

62 (Tex. 1978). An abuse of discretion occurs when a trial court acts in an

                                         5
unreasonable or arbitrary manner. See Downer v. Aquamarine Operators, Inc., 701
S.W.2d 238, 241-42 (Tex. 1985). “An abuse of discretion does not exist where the

trial court bases its decisions on conflicting evidence.” Davis, 571 S.W.2d at 862.

      When a trial court is not requested to enter findings of fact or conclusions of

law, the evidence from a temporary injunction hearing is viewed on appeal in the

light most favorable to the trial court’s order; every reasonable inference from the

evidence introduced at the temporary injunction hearing is indulged in the light

that favors the trial court’s ruling. See Thomas v. Beaumont Heritage Soc’y, 296
S.W.3d 350, 352 (Tex. App.—Beaumont 2009, no pet.). Viewing a trial court’s

ruling in the light most favorable to the evidence requires that we affirm the order

granting temporary injunctive relief if we can do so on any valid legal theory that

is supported by the pleadings and the evidence. See id.; Davis, 571 S.W.2d at 862.

Here, no party requested findings, but the trial court’s order includes ten findings

of fact or conclusions of law. Though not required, a trial court may issue findings

of fact and conclusions of law in conjunction with an interlocutory order. See Tom

James of Dallas, Inc. v. Cobb, 109 S.W.3d 877, 884 (Tex. App.—Dallas 2003, no

pet.); see also Tex. R. App. P. 28.1. In determining if the trial court exercised its

discretion in a reasonable and principled fashion, we may consider such findings

                                         6
even though the trial court was not required to make them. See id.; see also

Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 852 (Tex. 1992) (orig. proceeding).

      A temporary injunction hearing allows the trial court to determine whether

the party seeking temporary injunctive relief is entitled to “preserve the status quo

of the litigation’s subject matter pending a trial on the merits.” Butnaru v. Ford

Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). To obtain temporary injunctive relief,

“the applicant must plead and prove three specific elements: (1) a cause of action

against the defendant; (2) a probable right to the relief sought; and (3) a probable,

imminent, and irreparable injury in the interim.” Id.

      On appeal, the merits of the underlying case are not presented for appellate

review; a trial court’s ruling on a party’s request for temporary injunctive relief is a

preliminary decision. See Tom James of Dallas, 109 S.W.3d at 882-83. “[B]y

granting a temporary injunction, a trial court does not declare that a covenant not to

compete is valid.” Vaughn v. Intrepid Directional Drilling Specialists, Ltd., 288
S.W.3d 931, 938 (Tex. App.—Eastland 2009, no pet.). Nonetheless, if the trial

court decides to grant an injunction or restraining order, Rule 683 of the Texas

Rules of Civil Procedure states that the order “shall set forth the reasons for its

issuance; shall be specific in terms; shall describe in reasonable detail and not by

                                           7
reference to the complaint or other document, the act or acts sought to be

restrained[.]” Tex. R. Civ. P. 683.

                                        Analysis

      In nineteen issues, Dickerson advances three principal arguments: (1) the

covenant not to compete is unenforceable; (2) Acadian has an adequate remedy at

law and did not establish irreparable harm; and (3) the trial court’s order, in various

respects, fails to comply with the requirements of Rule 683. We will discuss

Dickerson’s issues from the perspective of his three principal arguments.

                                      Enforceability

      In issues one through four, Dickerson claims that the agreement is

unenforceable because he received no consideration in return for signing the

covenant not to compete and because the covenant is not ancillary to an otherwise

enforceable agreement. The Covenants Not to Compete Act provides that

covenants not to compete are enforceable if:

      it is ancillary to or part of an otherwise enforceable agreement at the
      time the agreement is made to the extent that it contains limitations as
      to time, geographical area, and scope of activity to be restrained that
      are reasonable and do not impose a greater restraint than is necessary
      to protect the goodwill or other business interest of the promisee.

Tex. Bus. & Com. Code Ann. § 15.50(a) (West 2011). However, an “‘otherwise

enforceable’” agreement “‘can emanate from at-will employment so long as the

                                            8
consideration for any promise is not illusory.’” Alex Sheshunoff Mgmt. Servs., L.P.

v. Johnson, 209 S.W.3d 644, 648 (Tex. 2006). Additionally, when a covenant is

part of an agreement that contains mutual, non-illusory promises, the requirement

of an “‘otherwise enforceable agreement’” is satisfied. Marsh USA, Inc. v. Cook,

354 S.W.3d 764, 773 (Tex. 2011).

      To establish that a covenant not to compete is “‘ancillary to or part of’” an

otherwise enforceable agreement, the employer must show (1) that the

consideration it gave in the otherwise enforceable agreement gave rise to the

employer’s interest in restraining the employee from competing, and (2) that the

covenant was designed to enforce the employee’s consideration or return promise

in the agreement. Sheshunoff, 209 S.W.3d at 648-49. In this case, there was

evidence showing that Dickerson received Acadian’s confidential information after

the effective date the parties entered into the written agreement containing

Dickerson’s non-compete. Because the evidence introduced during the hearing

allowed the trial court to reasonably determine that Acadian performed its implied

promise to provide Dickerson with confidential information, the trial court did not

abuse its discretion in rejecting Dickerson’s argument that the agreement lacked

consideration. See Sheshunoff, 209 S.W.3d at 651; see also Mann Frankfort Stein

& Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 851 (Tex. 2009) (explaining

                                        9
that the summary judgment evidence at issue in that case conclusively

demonstrated the employer impliedly promised to supply confidential information

to the employee when the parties entered the agreement).

      On the evidence presented during the hearing, the trial court could also

reasonably conclude that the covenants in the agreement between Acadian and

Dickerson were designed to enforce Dickerson’s promise that he would not

compete with Acadian by using its confidential information to do so. Examples of

the types of interests an employer can protect by a covenant not to compete include

the employer’s goodwill, as well as its confidential or proprietary information.

Sheshunoff, 209 S.W.3d at 649. In this case, the evidence shows that Dickerson

expressly agreed not to disclose confidential information, as defined in the parties’

agreement, without Acadian’s authorization. The trial court could reasonably

conclude that the promises of the parties under the agreement were designed to

allow Acadian to enforce Dickerson’s obligation not to disclose its confidential

information to others. See id.

      With respect to Acadian’s implied promise to provide Dickerson

confidential information and his express promise to keep it confidential, the

agreement provides:

                                         10
             Subject only to the Geographic Restriction and Time Limitation
      given below, Employee shall not, after the termination of his/her
      relationship with Company (whether voluntary or involuntary), on
      his/her own behalf, directly or indirectly, or on behalf of another
      person or entity, whether as an employee, independent contractor,
      owner, principal or otherwise, provide the following products and
      services to any client or former client of Company: domestic and
      imported hardwood sales, domestic and imported plywood sales,
      milling services, cypress proprietary products, cabinet and millwork
      accessories, drying services and distribution of those products in areas
      listed below. Furthermore, Employee shall not solicit or induce any
      other employee of Company to leave his or her employment.

      Employee recognizes and acknowledges that he/she will have access
      to certain confidential information of the Company, its customers, and
      entities affiliated with the Company, and that such information
      constitutes valuable, special and unique property of the Company and
      such other entities. The Employee will not, during his employment or
      at any time thereafter, disclose any such confidential information to
      any person, firm, entity, association or other Company for any reason
      or purpose whatsoever, except to authorized representatives of the
      Company, its affiliated entities, successors and assigns, and state of
      federal [] regulators as may be required. . . . For purposes of this
      Agreement, the term “confidential information” means any
      information with respect to the Company’s operations, management,
      policies or procedures that is: (a) designated or confirmed in writing
      to be confidential or for internal Company use only; (b) not made
      freely available by the Company to its customers nor published or
      otherwise made available to the public through sources entitled to
      disclose the same; or (c) is not or has not become known to the public
      through sources authorized to release such information.

      The evidence introduced during the hearing demonstrated that Acadian

provided Dickerson with customer lists containing contact information, sales

histories, sales reports, and pricing information pertinent to Acadian’s business.

                                        11
The consideration Acadian gave to Dickerson to sign the agreement was provided

by supplying him with confidential information about its customers after the

effective date of the agreement. 2 In light of the promises that are found in the

agreement, as well as the evidence during the hearing, the trial court properly

determined that the agreement constitutes “an otherwise enforceable agreement,”

and that Dickerson was bound by his promise not to disclose Acadian’s

confidential information. See Marsh, 354 S.W.3d at 773. We agree with the trial

court that the covenant not to compete was supported by consideration and that it is

enforceable. We overrule issues one through four.

                       Adequate Remedy-Irreparable Harm

      In issues five and six, Dickerson argues that Acadian has an adequate

remedy at law because it can determine the damages caused by Dickerson’s

disclosures of its confidential information. Based on that argument, Dickerson
      2
        Although Dickerson argues that he was already bound not to disclose
Acadian’s confidential information based on an employee handbook that is
referred to in Acadian’s letter that offered him employment, the contents of the
handbook were not before the trial court when it determined whether the covenant
not to compete was enforceable. Methodist Hosps. of Dallas v. Tall, 972 S.W.2d
894, 898 (Tex. App.—Corpus Christi 1998, no pet.) (“It is axiomatic that an
appellate court reviews actions of a trial court based on the materials before the
trial court at the time it acted.”). Moreover, it appears the parties intended the
agreement to control Dickerson’s responsibilities with respect to the disclosure of
Acadian’s confidential information, as the agreement is dated as having been
effective on the same date that the evidence shows that Dickerson signed his offer
letter.
                                        12
contends that Acadian failed to demonstrate to the trial court that it would suffer

irreparable harm if the trial court refused Acadian’s request for temporary

injunctive relief. However, Acadian introduced evidence during the hearing

showing that it had suffered a loss of market share as well as sales that it attributed

to Dickerson having changed employers; and, during the hearing, Dickerson

admitted that after going to work for a direct competitor of Acadian, he sold

products covered by his non-compete agreement to several entities that he knew to

be Acadian’s customers. Thus, “‘the harm was more than imminent; it was actual

and ongoing.’” Wright v. Sport Supply Group, Inc., 137 S.W.3d 289, 293 (Tex.

App.—Beaumont 2004, no pet.) (quoting NMTC Corp. v. Conarroe, 99 S.W.3d
865, 869 (Tex. App.—Beaumont 2003, no pet.)). The losses to Acadian

represented by these sales are partly tangible, the lost profit, but are also intangible,

as they represent an interruption of relationships with clients that are difficult if not

impossible to fully measure. “An injury is irreparable if the injured party cannot be

adequately compensated in damages or if the damages cannot be measured by any

certain pecuniary standard.” Butnaru, 84 S.W.3d at 204.

      We also are not persuaded that the evidence fails to support the trial court’s

conclusion that Acadian would face difficulty in determining its total damages

caused by Dickerson’s breaching the agreement. The testimony at the hearing

                                           13
reflects that Acadian could determine its losses “[t]o this point,” but it does not

show that Acadian could, with accuracy, determine its prospective damages

relating to Dickerson’s breach of his non-compete. We also note that the agreement

provides that Acadian has the right to enforce the agreement by “injunction,

without the necessity of showing irreparable harm” for any breach by Dickerson,

and Dickerson has not argued that this provision is unenforceable. See Wright, 137
S.W.3d at 293-94; see also Poole v. U.S. Money Reserve, Inc., No. 09-08-137 CV,

2008 Tex. App. LEXIS 8257, **24-26 (Tex. App.—Beaumont Oct. 30, 2008, no

pet.) (mem. op.).

      We conclude that the trial court could have reasonably determined that

Acadian had no adequate remedy at law and that it could not presently or readily

ascertain the damages it would suffer if the agreement was not enforced. Issues

five and six or overruled.

                                    Rule 683

      In issues seven through nineteen, Dickerson complains that the trial court’s

temporary injunction order fails to comply with the requirements found in Texas

Rules of Civil Procedure Rule 683. See Tex. R. Civ. P. 683 (Form and Scope of

Injunction or Restraining Order). According to Dickerson, there are several reasons

the order fails to comply with Rule 683: (1) the limitations placed on him by the

                                        14
trial court’s order are not reasonable and impose greater restraints than are

reasonably necessary to protect Acadian’s interests, (2) the trial court’s order is

overly broad because the persons or entities that are to be treated as Acadian’s

current clients are not sufficiently defined, (3) the order should have been limited

to Acadian’s clients with whom Dickerson had dealings while he was Acadian’s

employee, (4) the order does not sufficiently identify the names of Acadian’s

current customers, (5) the order does not sufficiently identify what information

about Acadian’s customers the order protects as confidential information, (6) the

order fails to identify what may constitute confidential information with respect to

third parties, (7) the term “confidential information” is not defined in the order, (8)

the order fails to sufficiently identify what will be considered “direct or indirect

involvement with business in direct competition with the particular business lines

of Acadian[,]” (9) the order contains no limit as to time, (10) the order is not

sufficiently limited by geographical area, and (11) the order does not specify a trial

date.

        Because a person who violates a trial court’s injunction may be held in

contempt, the language enjoining a party should be clear so the parties subjected to

such prohibitions are not misled. See Tex. R. Civ. P. 692 (providing that a party

who disobeys an injunction may be punished by the court for contempt).

                                          15
Consequently, Rule 683, which governs the form of injunction orders, requires the

trial court to provide the reasons the order was issued and requires the terms of the

order to be specific. See Tex. R. Civ. P. 683. Under the provisions of Rule 683, an

injunction order must “set forth the reasons for its issuance; shall be specific in

terms; [and] shall describe in reasonable detail and not by reference to the

complaint or other document, the act or acts sought to be restrained[.]” Id. Rule

683 also requires that the trial court “include an order setting the cause for trial on

the merits[.]” Id.

      The language in the order before us is sufficient to explain the trial court’s

rationale that Dickerson violated the agreement not to compete with Acadian after

he left its employment. However, the order is not sufficiently specific and does not

describe in reasonable detail the act or acts the order intends to restrain. For

example, the trial court’s order contains no time and geographical limitations. The

order does not define what individuals or entities would be considered Acadian’s

“current clients,” nor is it clear what the court would consider to constitute the use

or disclosure of confidential or proprietary information. The last paragraph of the

order, which restricts Dickerson’s “direct or indirect involvement with business

which is in direct competition with the particular business lines of Acadian” is

likewise vague. For instance, would Dickerson’s direct or indirect involvement

                                          16
include working for Cypress Creek in some role other than as a salesman, or

working for Cypress Creek as a salesman but soliciting customers to purchase

products that fall outside the restrictions of Dickerson’s agreement with Acadian?

While it is possible that the trial court would not hold Dickerson in contempt for

engaging in these activities, the language in the order is less than clear.

Nevertheless, the parties—undertaking in good faith to comply with that party’s

respective understanding of the scope of the order—could be misled by the scope

of the trial court’s order. Consequently, we agree with Dickerson that the trial

court’s order does not comply with the requirements of Rule 683. 3

      While our disposition of this issue makes it unnecessary to individually

address all of Dickerson’s remaining arguments, we must still determine whether

we can reform the agreement and the trial court’s order or whether it is necessary

to remand for further proceedings. See Tex. R. App. P. 43.3(a); Wright, 137
S.W.3d at 298. In this case, from the evidence admitted at the hearing, we are

unable to determine the identities of all of the entities and individuals who were

customers of Dickerson while he was employed by Acadian. Additionally, we are

      3
        We note that Rule 684 of the Texas Rules of Civil Procedure requires that
the trial court order a sufficient bond when granting temporary injunctions. Tex. R.
Civ. P. 684. We see no evidence in the record that a bond was ordered.
Nevertheless, Dickerson has not complained in his appeal that the order is deficient
for failing to set a bond.
                                        17
unable to determine whether these customers were doing business in the

geographic territory that is identified in the parties’ agreement.

      “A restraint on client solicitation in a personal services contract is overbroad

and unreasonable if it extends to clients with whom the employee had no dealings

during his employment.” EMS USA, Inc. v. Shary, 309 S.W.3d 653, 660 (Tex.

App.—Houston [14th Dist.] 2010, no pet.) (citing Peat Marwick Main & Co. v.

Haass, 818 S.W.2d 381, 386-88 (Tex. 1991)). Nevertheless, a restraint on client

solicitation regarding current clients is not unreasonable on its face, but must be

understood to only prohibit contact of those clients to which the employee had

contact, not those clients with whom the former employee had no dealings. Id. In

other cases involving non-compete agreements, we have stated that blanket

restrictions prohibiting a former employee from working in an industry in some

other capacity are overbroad and unreasonable because such restrictions impose a

greater restraint than is necessary. See generally Hodgson v. U.S. Money Reserve,

Inc., No. 09-13-00074-CV, 2013 Tex. App. LEXIS 7207 (Tex. App.—Beaumont

June 13, 2013, no pet.) (mem. op.); Poole, 2008 Tex. App. LEXIS 8257.

      For all of these reasons, we conclude the record now before us does not

contain sufficient information to allow us to redraw the trial court’s order to make

it sufficiently specific to comply with Rule 683; consequently, additional

                                          18
proceedings are required. See Tex. R. App. P. 43.3(a). Therefore, we reverse the

trial court’s order granting Acadian temporary injunctive relief, dissolve the

temporary injunction, and remand the cause to the trial court for further

proceedings consistent with this opinion.

      REVERSED AND REMANDED.

                                             ______________________________
                                                     HOLLIS HORTON
                                                         Justice

Submitted on December 4, 2013
Opinion Delivered April 10, 2014

Before McKeithen, C.J., Kreger and Horton, JJ.

                                        19