Cooper Valves, LLC and Barry Don Hoeffner v. ValvTechnologies, Inc

531 S.W.3d 254
Court of Appeals of Texas·Decided July 20, 2017·No. NO. 14-16-00879-CV·Published·Cited by 22 cases

Opinion

OPINION

J. Brett Busby, Justice

Appellee ValvTechnologies, Inc. (VTI) filed this suit after appellant Barry Hoeff-ner left its employ and went to work for appellant Cooper Valves, LLC. In this accelerated interlocutory appeal, Cooper Valves and Hoeffner challenge the trial court’s order granting a temporary injunction requested by VTI. 1

Appellants argue that the trial court abused its discretion when it signed the temporary injunction because the order (1) is based on unenforceable noncompetition and nonsolicitation covenants by Hoeffner, (2) is overbroad and vague in violation of Texas Rule of Civil Procedure 688, and (3) contains findings by the trial court that are not supported by sufficient evidence. We conclude Hoeffner’s covenants are unenforceable and cannot support the sections of the temporary injunction based on them. We further conclude that although there is evidence in the record supporting the trial court’s findings of misappropriation and threatened misappropriation of certain VTI trade secrets, the temporary injunction violates Rule 688 because it is impermissibly vague and ■ overbroad. We therefore reverse the challenged sections of the trial court’s temporary injunction and remand the case to the trial court for further proceedings consistent with this opinion.

Background

VTI is in the business of designing, developing, manufacturing, and selling various types of industrial valves worldwide. Cooper operates a similar business. The two companies compete, however, in only a single category of valves: metal-seated ball valves for severe service applications.

Hoeffner worked for Baker Hughes Corporation, where he developed an expertise in addressing customers’ industrial process and design problems. Kevin Hunt, the CEO of VTI, hired Hoeffner in 1997. Ho-effner signed an agreement with VTI at that time, and it provides that he is an at-will employee. In the 1997 Agreement, Ho-effner agreed not to disclose VTI’s “Confidential Business Information,” which is defined as including

any information not generally known in the relevant trade industry, which is disclosed to, discovered by, or known to . [Hoeffner] as a consequence of [Hoeff-ner’s] employment by [VTI], including but not limited [to] information concerning [VTI’s] products, processes, services, *258 research developments, manufacturáis purchasing, accounting, engineering, marketing, distribution, construction, ■merchandising, selling, soliciting, or customers,- regardless of whether the information is in a written or unwritten form; and including but not limited to drawings, blueprints, plans, computer programs and printouts, manuals, notebooks, compositions, reports, files, records, customer lists, accounting .sheets and statements, proposals, formulae, processes, and machines. The parties agree that the use of the term Confidential Business Information in this Agreement shall include all of the foregoing.

The 1997 Agreement also includes a covenant not to compete. This covenant provides, in pertinent part,

2. Noncompetition by Employee:

For a period of two (2) years after the termination of [Hoeffner’s] employment for any reason, [Hoeffner] agrees that he will not, either directly or indirectly, become an employee, manager, owner, officer of, or consultant for any other company, corporation or entity within the world, where such, other company, corporation, or entity is engaged, either directly or indirectly, in a Business which is competitive with the Business of [VTI]. [Hoeffner] agrees that this restriction applies to. [Hoeffner’s] performance of the same or similar duties and activities [Hoeffner] perfonned for [VTI] or activities where the performance of such activities could result in the disclosure of the Confidential Business Information of [VTI]....

The 1997 Agreement additionally provides that Hoeffner cannot solicit VTI’s customers for the purpose of competing with VTI, and cannot “solicit the employees of [VTI] for purposes of hiring such individuals to enter into competition with [VTI].” According to the agreement, it cannot “be modified, amended, or terminated except by a written instrument executed by [Ho-effner]. and a duly authorized officer of [VTI].”

Hoeffner worked for VTI from 1997 until early 2000,. when he quit and. went to work for a software company. According to Hunt, when Hoeffner left VTI, there was no expectation that he would return to work for VTI, there were no discussions at that time regarding Hoeffner returning to VTI, and. VTI did not hold his job open for Hoeffner while he was gone. Additionally, Hunt testified that if Hoeffner had gone to work for a competitor, VTI would have considered that a breach of .his covenant not to compete. ,

Approximately eighteen months .after leaving VTI,' Hoeffner approached Hunt about returning to work there. Hunt, concerned because Hoeffner’s departure had been under less than ideal circumstances, told Hoeffner that he would have to think about it. Ultimately,. Hoeffner went through an interview process with senior-level VTI employees to determine whether “everybody could get along.” Hoeffner was rehired on October 1,2001.

VTI required Hoeffner to sign a new confidentiality agreement when he was rehired, but not a new noncompetition agreement. The 2001 Confidentiality Agreement included a new definition of confidential information:

As used in this Agreement, the term “Confidential .Information” means (1) proprietary information of VTI; (2) information marked or designated by VTI as confidential; (3) information, whether or not in written .form and whether, or not designated as confidential, which is know [sic] to me as being treated by VTI as confidential; and (4) information provided to VTI by third parties which VTI is obligated to keep confidential. Confidential information includes, but is *259 not limited to, computer programs, discoveries, ideas, designs, drawings, specifications, techniques, computer and other models, data, statistical and other programs, documentation, processes, know-how, customer lists, marketing plans, and financial and technical information.

Hoeffner agreed that he would not disclose any VTI confidential information without VTI’s written consent, Hoeffner further agreed that he would not “copy, transmit, reproduce, summarize, quote, or make any commercial or other use whatsoever of confidential information, except as may be necessary to perform my duties for VTI,” Finally, Hoeffner agreed that he would “exercise the highest degree of care in safeguarding confidential information against loss, theft, or other inadvertent disclosure, and agree generally to take all steps necessary to ensure the maintenance of confidentiality.”

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Cooper Valves, LLC and Barry Don Hoeffner v. ValvTechnologies, Inc, 531 S.W.3d 254 (Tex. Ct. App. 2017).

531 S.W.3d 254 (Cooper Valves, LLC and Barry Don Hoeffner v. ValvTechnologies, Inc) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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