Daily Instruments Corp v. Heidt

998 F. Supp. 2d 553, 2014 U.S. Dist. LEXIS 21766, 2014 WL 710683
CourtDistrict Court, S.D. Texas
DecidedFebruary 21, 2014
DocketCivil Action No. H-13-2189
StatusPublished
Cited by22 cases

This text of 998 F. Supp. 2d 553 (Daily Instruments Corp v. Heidt) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Daily Instruments Corp v. Heidt, 998 F. Supp. 2d 553, 2014 U.S. Dist. LEXIS 21766, 2014 WL 710683 (S.D. Tex. 2014).

Opinion

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER ON HEARING FOR PRELIMINARY INJUNCTION

EWING WERLEIN, JR., District Judge.

Pending is Plaintiffs Motion for Preliminary and Permanent Injunction (Document No. 18), to which Defendants have filed their responses in opposition. On January 28, 2014, the Court conducted an evidentiary hearing at which the parties by and through their counsel presented witnesses, additional witnesses by deposition, and offered exhibits that were received in evidence. After having considered the motion, responses, reply, the evidence received at the hearing, the arguments of counsel, the parties’ supplemental briefing, and the applicable law, the Court makes the following findings of fact and conclusions of law.

Findings of Fact

From a preponderance of the evidence received at the evidentiary hearing, the Court finds, for purposes of the pending motion only, as follows:

The Business of Daily Instruments and its Employee Eric Heidt

1.Plaintiff Daily Instruments Corporation d/b/a Daily Thermetrics (“Daily”) is a privately-owned company headquartered in Houston, Texas, which designs, manufactures, and sells electrical temperature measurement (“ETM”) products and provides related services. Daily has approximately 100 employees and specializes in the narrow field of reactor thermometry, which involves ETM devices used in reactors for the refining, chemical, and petrochemical industries. Reactor thermometry makes up approximately 50 percent of Daily’s business. Daily’s primary reactor thermometry product is the CatTracker device.

2. At the beginning of 2008, Daily hired Eric Heidt (“Heidt”), a recent college graduate and resident of Nashville, Tennessee, for Daily’s sales department. Heidt had no prior sales experience in this field, and Daily taught him the business and trained him in the specialized area of selling ETM products.

3. Heidt performed well and, in 2010, Daily promoted him to the position of Regional Sales Manager and conferred upon him broad responsibilities for sales territories that included all of Europe, Russia, and parts of the United States and Canada. Heidt also was given responsibility for relationships with licensors in the United States who licensed Daily’s products in other parts of the world.

4. Heidt’s promotion elevated him into a small group of key employees to whom Daily provided access to confidential trade secrets, sensitive pricing information, and updates thereto, and gave authority to communicate and meet with customers and prospective customers at Daily’s expense as part of developing goodwill and sales for Daily. Heidt’s promotion enabled him also to participate in additional specialized training related to Daily’s business.

5. In consideration for his promotion by Daily and the concomitant benefits of receiving confidential information as a key employee, Heidt on November 10, 2010, executed a Confidentiality, Non-Solicitation and Non-Competition Agreement (the “Non-Competition Agreement”) and a sep[558]*558arate Confidentiality Agreement (the “Confidentiality Agreement”) with Daily.

6. The Non-Competition Agreement contains a non-competition clause, which provides:

Employee agrees that during Employee’s employment with the Company and for a period of twenty-four (24) months after Employee’s termination of employment, Employee will not, directly or indirectly, for Employee or other, in the Territory:
(a) perform for, render service to, or otherwise assist any Competitor in any position, job, task, function, skill, or responsibility that Employee has provided for, or on behalf of, the Company in the twenty-four (24) month period preceding the termination of Employee’s employment; or
(b) accept employment with a Competitor in a position, or render consulting services to a Competitor relating to such subjects that the Company’s Confidential Information to which Employee had access during his employment with the Company, or in the preceding twenty-four (24) month period, would likely assist the competitor.

A “Competitor” is defined by the Non-competition Agreement to mean “any company that engineers, designs, manufactures, installs, repairs, or services reactor thermometry products for use in the refining, petrochemical and chemical industries.” “Territory” is defined by the Non-Competition Agreement to include the United States and any country in which Daily does business.

7. The Non-Competition Agreement provides that “Employee acknowledges that these restrictions are necessary to protect that Confidential Information the Company has provided to Employee, as well as the Company’s goodwill.” The Non-Competition Agreement further provides:

Employee agrees that this provision defining the scope of activities constituting competition with the Company is narrow and reasonable for the following reasons: (i) Employee is free to seek employment with other companies providing services that do not directly or indirectly compete with any business of the Company; and there are many other companies that do not directly or indirectly compete with any business of the Company which could utilize Employee’s general knowledge, skill and experience. Employee further acknowledges that employees of Daily are highly skilled, and that employment opportunities exist with companies that are not Competitors.

8. The Non-Competition Agreement also prohibits Heidt during the 24 months following termination of his employment with Daily from directly or indirectly soliciting Daily employees to work for a competitor, and from directly or indirectly soliciting or accepting competing business from customers with whom he had made contact or regarding whom he had accessed confidential information in the previous 24 months.

9. The Non-Competition Agreement provides that if Heidt “ever decides later to contend that any restriction on activities imposed by this Agreement is no longer enforceable as written or does not apply to an activity in which Employee intends to engage on behalf of a competing business,” Heidt will first notify Daily in writing and meet with a Daily representative at least fourteen days before “engaging in any activity that foreseeably could fall within the questioned restriction.”

10. Both the Non-Competition Agreement and the Confidentiality Agreement provide that Heidt “will not, at any time [559]*559during or after [his] employment with the Company, make any unauthorized disclosure or any Confidential Information of the Company ... or make any use thereof, except in carrying out [his] employment responsibilities to the Company.” “Confidential Information” is defined as “any formula, pattern, device or compilation of information which is used in the Company’s or an affiliate’s business, and which gives it an opportunity to obtain an advantage over competitors who do not know it or use it.” This includes information about Daily’s customers and employees, marketing and sales strategies, product details, and pricing information.

11. In the reactor thermometry field, projects frequently take years to move from initial bidding to selection of a bid and execution of the project.

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Bluebook (online)
998 F. Supp. 2d 553, 2014 U.S. Dist. LEXIS 21766, 2014 WL 710683, Counsel Stack Legal Research, https://law.counselstack.com/opinion/daily-instruments-corp-v-heidt-txsd-2014.