Elcor Chemical Corp. v. Agri-Sul, Inc.

494 S.W.2d 204, 178 U.S.P.Q. (BNA) 552, 1973 Tex. App. LEXIS 2417
CourtCourt of Appeals of Texas
DecidedMarch 29, 1973
Docket18064
StatusPublished
Cited by40 cases

This text of 494 S.W.2d 204 (Elcor Chemical Corp. v. Agri-Sul, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elcor Chemical Corp. v. Agri-Sul, Inc., 494 S.W.2d 204, 178 U.S.P.Q. (BNA) 552, 1973 Tex. App. LEXIS 2417 (Tex. Ct. App. 1973).

Opinion

CLAUDE WILLIAMS, Chief Justice.

This is a “trade secret” case. Elcor Chemical Corporation (hereinafter referred to as ELCOR) instituted this action against Ronald J. Miller, Donald C. Kruse and Glenn Watts, former employees of ELCOR, seeking to enjoin them from using or disclosing confidential information and trade secrets relating to a process for the manufacture of a sulphur fertilizer *206 product which plaintiff alleged had been acquired by the three named defendants while they were in the employ of ELCOR and under express contractual obligations not to reveal such trade secrets. ELCOR also alleged that, with the aid and financial backing of Caldwell Computer Corporation Miller, Kruse and Watts had created a corporation known as Agri-Sul, Inc. and that such newly formed corporation was engaged in the manufacture and sale of sul-phur fertilizer, the chemical composition thereof being information acquired by Miller, Kruse and Watts while employed by ELCOR and used by them in contravention of their contractual obligation not to reveal such information to others. Based upon its allegations of breach of employment agreements, failure to reveal an important discovery, violation of the fiduciary duty by disclosure of confidential information and trade secrets to an outsider, violation of noncompetitive agreements, and conspiracy to violate the provisions of the employment agreements, ELCOR sought injunctive relief as well as extensive monetary damages.

The case was submitted to the court without a jury. We submit the following summarization of material facts.

ELCOR is a publicly held conglomerate composed of many and diverse operating subsidiaries. Among its businesses was sulphur mining, process and sales. In 1967 its manufacturing plant located at Lehman, Texas was moved to Dimmitt, Texas. This plant primarily produced anhydrous ammonia and thiovite, a liquid fertilizer product and also a dry sulphur fertilizer which bore the name “Sol-U-Sul”. Miller was employed by ELCOR from May 10, 1963 to December 15, 1969 and was plant manager of the Sol-U-Sul operation, Kruse, a chemical engineer, was employed by ELCOR at the Dimmitt plant from April 20, 1967 to October 15, 1969. Watts, a salesman, was employed by ELCOR from November 11, 1963 to December 15, 1969. Miller, Kruse and Watts, as employees of ELCOR, had each executed written employment agreements containing' the following relevant provisions:

“For and in consideration of, and as part of the terms of my employment by ELCOR, at a wage or salary and for such length of time as such employment shall continue, I agree:
1. With respect to INVENTIONS made or conceived by me, either solely or jointly with others, during (i) my employment by Elcor or (ii) within one year after the termination of my employment if such invention is based in whole or in part on CONFIDENTIAL INFORMATION :
a. To promptly and fully inform the President or Executive Vice President of ELCOR CHEMICAL CORPORATION, or such person as the President or Executive Vice President may designate, in writing, of such INVENTIONS.
b. To assign (and 1 do hereby assign) to ELCOR all of my rights to such inventions and Applications for Letters Patent and to Letters Patent granted upon such INVENTIONS.
2. Except as required in my duties to ELCOR, I will not use or disclose any CONFIDENTIAL INFORMATION either during or after my employment by ELCOR.
3. Upon termination of my employment with ELCOR, all records of CONFIDENTIAL INFORMATION, including copies and models thereof in my possession, whether prepared by me or others, will be left with ELCOR.”

The contract also provided:

“5. For a period of two years after termination of my employment by EL-COR;
a. If I am now or hereafter employed by ELCOR in a sales capacity (the term sales capacity shall include only jobs which are directly related to the sale of *207 ELCOR’s products), I will not render services, directly or indirectly, to any CONFLICTING ORGANIZATION in connection with the sale, merchandising or promotion of CONFLICTING PRODUCTS to any customer of EL-COR upon whom I have called, or whose account I have supervised on behalf of ELCOR, at any time during the last two years of my employment by ELCOR.
b. I will not render services, directly or indirectly to any CONFLICTING ORGANIZATION which is producing or engaged in research with regard to any RESTRICTED MATTER.”

The contract contained the following definition of terms:

“B. CONFIDENTIAL INFORMATION means information not generally known about Elcor’s processes and products, including information relating to research, plans, development, techniques, manufacture, projects, purchasing, accounting, financing, engineering, marketing, merchandising and selling including, without limitation, information set out in writing, pictures,” drawings and information that is not reduced to written form.
C. CONFLICTING PRODUCT means any product or process of any person or organization other than ELCOR, in existence or under development, which resembles or competes with a product or process upon which the employee may work during the last two years of his employment by ELCOR, or about which the employee may acquire CONFIDENTIAL INFORMATION through his work with ELCOR.
D. INVENTIONS means discoveries, improvements and ideas (whether patentable or not) relating to any activities of ELCOR.
E. CONFLICTING ORGANIZATION means any person or organization which is engaged in, or about to become engaged in, research on or development, production, marketing, or selling of a CONFLICTING PRODUCT.
F.RESTRICTED MATTER means any product or process which ELCOR and I may hereafter so designate by written agreement.”

William J. Haggard, assistant to the executive vice president of ELCOR, who held scientific and engineering degrees, testified in detail concerning the extensive research and development which went into the production of ELCOR products. He said that as a part of the extensive sulphur activities of ELCOR the company made a decision in 1967 to develop a sulphur fertilizer product that would more readily break down in the soil. The company’s efforts, including those contributed by Miller and Kruse, resulted in a product called “Sol-U-Sul”. This product resulted from the addition of clay to sulphur “prills” permitting them to break down into finer particles.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Ams-Osram USA Inc. v. Renesas Electronics America, Inc.
133 F.4th 1337 (Federal Circuit, 2025)
Southwestern Energy Production Co. v. Berry-Helfand
491 S.W.3d 699 (Texas Supreme Court, 2016)
In re Mud King Products, Inc.
514 B.R. 496 (S.D. Texas, 2014)
Bohnsack v. Varco L.P.
668 F.3d 262 (Fifth Circuit, 2012)
Mge UPS Systems, Inc. v. Ge Consumer and Indus.
612 F.3d 760 (Fifth Circuit, 2010)
Sharma v. Vinmar International, Ltd.
231 S.W.3d 405 (Court of Appeals of Texas, 2007)
Carbo Ceramics, Inc. v. Keefe
166 F. App'x 714 (Fifth Circuit, 2006)
General Universal Systems, Inc. v. Lee
379 F.3d 131 (Fifth Circuit, 2004)
Mabrey v. SandStream, Inc.
124 S.W.3d 302 (Court of Appeals of Texas, 2003)
Jim Mabrey v. Sandstream, Inc.
Court of Appeals of Texas, 2003
Center for Economic Justice v. American Insurance Ass'n
39 S.W.3d 337 (Court of Appeals of Texas, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
494 S.W.2d 204, 178 U.S.P.Q. (BNA) 552, 1973 Tex. App. LEXIS 2417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elcor-chemical-corp-v-agri-sul-inc-texapp-1973.