Ricky D. Parker and James Myers v. Schlumberger Technology Corporation

Opinion

ACCEPTED

01-14-01018-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

6/23/2015 4:46:51 PM

CHRISTOPHER PRINE

CLERK

NO. 01-14-01018-CV

FILED IN

IN THE COURT OF APPEALS 1st COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS HOUSTON, TEXAS HOUSTON, TEXAS 6/23/2015 4:46:51 PM CHRISTOPHER A. PRINE

Clerk

RICKY D. PARKER AND JAMES MYERS Appellants

v.

SCHLUMBERGER TECHNOLOGY CORPORATION Appellee

Interlocutory Appeal

from the 268th Judicial District Court of Fort Bend County, Texas Cause No. 14-DCV-218252

APPELLANTS RICKY D. PARKER AND JAMES MYERS’ MOTION TO REVIEW JUNE 4, 2015 AMENDED TEMPORARY INJUNCTION

Levon G. Hovnatanian

State Bar No. 10059825

hovnatanian@mdjwlaw.com

Robert T. Owen

State Bar No. 24060370

owen@mdjwlaw.com

Kevin G. Cain

State Bar No. 24012371

cain@mdjwlaw.com

MARTIN, DISIERE, JEFFERSON & WISDOM, L.L.P.

808 Travis, 20TH Floor

Houston, Texas 77002

(713) 632-1700 – Telephone (713) 222-0101 – Facsimile

TO THE HONORABLE COURT OF APPEALS:

Procedural Facts

This is an interlocutory appeal of the Fort Bend County District Court’s orders denying a motion to compel arbitration and granting a temporary injunction prohibiting the appellants Rick Parker and James Myers from working in the wireline industry. On April 30 2015, following oral argument, the Court entered an order sua sponte staying proceedings in the district court, with the sole exception that the district court was permitted to hear matters relating to the temporary injunction and was permitted to issue orders that modify or dissolve that injunction. On June 4, 2015 the district court signed an order modifying the injunction. See Supplemental Record & Appendix Tab 1. 1 The modified injunction maintains all of the substantive work restrictions as to both Parker and Myers but provides that the work restrictions expire on September 15, 2015 as to Parker alone. See Supplemental Record & Appendix Tab 1.

1 Attached to the appendix to this motion are true and correct copies of (1) Appellants’ Motion to Modify or Dissolve the Temporary Injunction; (2) Appellee’s Response to the Motion to Modify or Dissolve the Temporary Injunction; and (3) the district court’s June 4, 2015 Amended Temporary Injunction. Parker and Myers have also requested that the Fort Bend County District Clerk supplement the appellate record with these documents.

2

Rule 29.6

The district court’s June 4, 2015 order does not affect this Court’s jurisdiction to adjudicate this interlocutory appeal. See Tex. R. App. P. 29.6. Rule 29.6 provides:

(a) Motion to Review Further Orders. While an appeal from an interlocutory order is pending on a party’s motion or on the appellate court’s own initiative, the appellate court may review the following:

(1) a further appealable interlocutory order concerning the same subject matter; and

(2) any interlocutory order that interferes with or impairs the effectiveness of the relief sought or that may be granted on appeal.

(b) Record. The party filing the motion may rely on the original record or may file a supplemental record with the motion.

Tex. R. App. P. 29.6.

The June 6, 2015 amended temporary injunction is an appealable interlocutory order concerning the same subject matter as this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(4) (Vernon 2015) (“(a) A person may appeal from an interlocutory order of a district court, county court at law, statutory probate court, or county court that . . . grants or refuses a temporary injunction or grants or overrules a motion to dissolve a temporary injunction as provided by Chapter 65.”); Supplemental Record & Appendix Tab 1.

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Accordingly, the appellants respectfully ask that the Court review the June 4, 2015 order in conjunction with the other issues pending in this appeal.

Effect Of June 4, 2015 Order On The Appellate Issues The June 4, 2015 Amended Temporary Injunction does not affect any issue in this appeal. The amended injunction maintains all of the substantive work restrictions previously imposed on Parker and Myers and constitutes an abuse of the trial court’s discretion for all the reasons previously noted in Parker and Myers’ appellate briefing. See Supplemental Record & Appendix Tab 1. The sole substantive change in the order is that it sets an expiration date of September 15, 2015 for the work restrictions as to Parker alone. See Supplemental Record & Appendix Tab 1.

However, that modification does not correct any substantive issue addressed in the parties’ briefing or at oral argument. Indeed, as noted in appellants’ prior briefing, an injunction prohibiting an employee from working cannot be properly based upon an expired non-compete. See Appellants’ Brief at 53-54. It is undisputed that, absent some act tolling the non-compete at issue, Parker’s non- compete expired on October 2, 2014, one year after he resigned his position with Schlumberger, and one week before the district court signed a temporary restraining order prohibiting him from working in the wireline industry. See 3 RR 31; 5 RR Pl.’s Ex. 1 at ¶ 5. As noted in the prior briefing, there is no evidence in

4

the record that supports any continued restriction on Parker’s right to work. See Reply Briefing at 29-30. Accordingly, adding an expiration date of September 15, 2015 to Parker’s work restrictions does not correct the substantive issues attendant to the temporary injunction and the amended temporary injunction remains an abuse of the trial court’s discretion. The June 4, 2015 amended temporary injunction should be reversed and dissolved for all the reasons previously presented to the Court.

Conclusion

Appellants Ricky Parker and James Myers respectfully request that the Court grant this motion to review the district court’s June 4, 2015 order; reverse the trial court’s orders denying their motion to compel arbitration and granting Schlumberger’s application for temporary injunction and permit Parker and Myers to immediately resume work.

5

Respectfully submitted, MARTIN, DISIERE, JEFFERSON & WISDOM, L.L.P.

By: /s/ Robert T. Owen Levon G. Hovnatanian State Bar No. 10059825 hovnatanian@mdjwlaw.com Kevin G. Cain State Bar No. 24012371 cain@mdjwlaw.com Robert T. Owen owen@mdjwlaw.com State Bar No. 24060370 808 Travis, Suite 20th Floor Houston, Texas 77002 (713) 632-1700 – Telephone (713) 222-0101 – Facsimile

ATTORNEYS FOR APPELLANTS RICKY D. PARKER AND JAMES MYERS

6

CERTIFICATE OF COMPLIANCE This is to certify that this computer-generated motion contains 799 words.

/s/ Robert T. Owen

Robert T. Owen

Dated: June 23, 2015

CERTIFICATE OF SERVICE

I hereby certify that on this 23rd day of June, 2015, a true and correct copy of the foregoing was sent by the method(s) indicated to the following individuals:

Mr. Jeff Barnes via e-file and e-mail: barnesj@jacksonlewis.com JACKSON LEWIS, P.C. 1415 Louisiana, Suite 3325 Houston, Texas 77002

Mr. William L. Davis via e-file and e-mail: davisw@jacksonlewis.com JACKSON LEWIS, P.C. 500 N. Akard, Suite 2500 Dallas, Texas 75201

/s/ Robert T. Owen

Robert T. Owen

APPENDIX

Tab 1 – June 4, 2015 Amended Temporary Injunction Tab 2 – Motion To Modify Or Dissolve Temporary Injunction Tab 3 – Response To Motion To Modify Or Dissolve Temporary Injunction

ANNIE REBECCA ELLIOTT

DISTRICT CLERK

Fort Bend County, Texas

(281) 341-3754

Fax (281)341-4519

June 11,2015

TO: W.JACKSON WISDOM MARTIN DISIERE JEFFERSON & WISDOM LLP 808 TRAVIS 20TH FLOOR HOUSTON TX 77002

Re: Cause No. 14-DCV-218252 268TH JUDICIAL DISTRICT COURT

Schlumberger Technology Corporation vs Ricky D. Parker and James Myers

Dear W.JACKSON WISDOM: Please find enclosed the following:

(1) CERTIFIED COPY OF THE AMENDED TEMPORARY INJUNCTION FORWARDED TO YOUR OFFICE FOR FURTHER HANDLING.

DISTRICT CLERK ANNIE REBECCA ELLIOTT Fort Bend County, Texas

By:

Deputy strict Clerk V a Vasquez Telephone:(281)341-3754

MAILING PHYSICAL 301 Jackson Street 1422 Eugene Heimann Circle, Room 10142 Richmond,Texas 77469 Richmond, Texas 77469 http://www.fortbendcountytx.gov

Departments — District Clerk RECEIVED

JUN 15 2015

ORIGINAL

JAMES M. CLEARY,JR.

Filed

5/29/2015 3:40:47 PM !

Annie Rebecca Elliott

District Clerk

Fat Bend County. Texas

Jennifer Melendez

CAUSE NO. 14-DCV-218252

SCHLUMBERGER TECHNOLOGY IN THE DISTRICT COURT OF CORPORATION,

Plaintiff, v. FORT BEND COUNTY, TEXAS RICKY D.PARKER and JAMES MYERS, § Defendants. 268TH JUDICIAL DISTRICT AMENDED TEMPORARY INJUNCTION The Court enters this Amended Temporary Injunction following the hearing on Defendant Ricky Parker's Motion to Modify or Dissolve the Temporary Injunction that was held on May 15, 2015.

On December 5 and 8, 2014, the Court held a hearing on Plaintiff Schlumberger Technology Corporation's request for a temporary injunction. Plaintiff appeared at the hearing and offered evidence in support of the request for a temporary injunction. Defendants did not appear, but were represented by counsel at the hearing. The Court heard testimony and considered the evidence and arguments of the parties and finds as follows.

The Court Ends that the evidence establishes the elements necessary for the issuance of a temporary injunction. Schlumberger has established a probable right to relief necessary to obtain a temporary injunction with respect to its claims for breach of contract and tortious interference with contract, tortious interference with prospective business relationships, breach of contract, breach of fiduciary duty and duty of loyalty, and aiding and abetting breach of fiduciary ditty and duty of loyalty. Ricky Parker sold the assets of his business (Parker Energy Services) to Schlumberger. He signed the agreement in Houston, Texas. In connection with the sale, he and James Myers entered into Intellectual Property, Confidential Information, and Non-

ROUTED TO COURT OW 101 6 RT'D TO D. CLERK 0(01b5

Compete Agreements with Schlumberger (the "ICN Agreements') — Plaintiffs Exhibits 1 and 2. The ICN Agreements contain detailed and specific definitions of Confidential Information, Intellectual Property, and Company Intellectual Property and the restrictions relating to the use and disclosure of Confidential Information:

"Company Confidential Information" is defined as: technical information, software, databases, methods, know-how, formulae, compositions, drawings, designs, data, prototypes, processes, discoveries, machines, inventions, well logs or other data, equipment, drawings, notes reports, manuals, business information, compensation data, clients lists, client preferences, client needs, client designs, financial information, credit information, pricing information, information relating to future plans, marketing strategies, new product research, pending projects and proposals, proprietary design processes, research and development strategies, information relating to employees, consultants and independent contractors including information relating to salaries, compensation, contracts, benefits, inceptive plans, positions, duties, qualifications, project knowledge, other valuable confidential information, trade secrets, patent applications, and related filings regardless of whether or not identified as confidential or proprietary, and similar items.

"Intellectual Properly is defined as: all patents, trademarks, copyrights, trade secrets, Company Confidential Information, new or useful arts, ideas, discoveries, inventions, improvements, software, business information, lists, information considered by Company to be confidential, designs, drawings, writings, contributions, works of authorship, findings or improvements, formulae, processes, product development, manufacturing techniques, business methods, tools, routines and methodology, documentation, systems, enhancements or modifications thereto, know-how, and developments, any derivative works and ideas whether or not patentable, and any other form of intellectual property.

"Company Intellectual Property" is defined as: all Intellectual Property, that was authored, conceived, developed, or reduced to practice by Employee (either solely or jointly with others) during the term of his/her employment. Company Intellectual Property may be originated or conceived during the term of Employee's employment but completed or reduced to practice thereafter.

Company Intellectual Property shall be deemed a "work made for

hire" as that term is defined by the copyright laws of the United States, Company Intellectual Property also includes any "Pre-

existing Intellectual Property" assigned, licensed, or transferred to Company, and any "Preexisting Intellectual Property" in which Company has a vested or executory interest.

The ICN Agreements also contained one year restrictions on certain competitive activities after their employment ended. Paragraph 5 ofthe ICN Agreements provides that while employed by Sehlumberger, and for a period of one year after their employment with Schlurnberger ended, they would not directly or indirectly work for or assist, (whether as an owner, employee, consultant, contractor or otherwise) any business or commercial operation whose business is in direct or indirect competition with the area of Schlumberger's business in which they were employed. 'The area of business where James Myers and Ricky Parker were employed was the wireline, slick line and braided line services for oil and gas wells. The one- year restriction provides for an extension of time while they were breaching the restrictions. Both Parker and Myers breached paragraph 5 oftheir ICN Agreements.

Paragraph l3 of the ICN Agreements contains a restriction on soliciting Schlumberger employees. Both Parker and Myers breached paragraph 13 of their ICN Agreements.

James Myers signed a Retention Bonus Contract in connection with the sale of the business — Plaintiff's Exhibit 3. Pursuant to the terms of the Retention Bonus Contract, Myers was paid money in connection with the sale of the business and in exchange for his agreement to remain employed for a period oftwo years aRer he signed the agreement. Tie also agreed not to use or disclose Confidential Information, and agreed to return all documents, email communications, computer data and other Company materials, whether or not they contain Confidential Information, upon the separation from employment with the Company or upon request. Paragraph 5 of the Retention Bonus Contract provides that during his employment with the Company and for a period of one year following the end of his employment, he would not:

(a) Solicit, contact, or accept work, which was the same or substantially similar to the work andlor services performed by him for the Company, from clients of the Company with whom he had business dealings during his employment with the Company.

(b) Provide services (including consulting services) which are the same or substantially similar to services and/or work performed by him for the Company, for clients of the Company with whom he had business dealings during his employment with the Company.

(c) Solicit, recruit, encourage, hire or assist any other person or entity to solicit, recruit, encourage or hire for employment any employee or independent contractor or the Company to work fora competitor.

(d) Directly or indirectly own, manage, operate, control, be employed by, be a consultant ror, or perrorm any job functions for, any business that is in competition with the Company.

The testimony established that the Company [or purposes of the Retention Bonus Contract was the Parker Energy Services business acquired by Schlumborger which provided wireline, slick line and braided line services to oil and gas wells. The geographic territory specified in the Retention Bonus Contract is the territory serviced by the offices where Myers worked. Myers had management responsibilities over offices in Oklahoma, Pennsylvania, and Arkansas. The counties served by these offices arc identified in Plaintiffs Exhibit 74, which is attached to this ORDER and incorporated herein.

Myers has breached paragraph 5 of the Retention Bonus Contract. The Retention

Bonus Contract provides that Myers entitlement to the $100,000.00 Bonus Award is contingent upon his complying with paragraph 5 as written. Schlumberger paid the Bonus Award to Myers and he has not returned the money.

Both Ricky Parker and James Myers were in management roles at Schlumberger and also had extensive contact with Schlumberger customers. They had access to, and used, Confidential Information as defined in the agreements at issue. Access and use was necessary for them to secure business for Schlumberger, staff the jobs, and service the customers. They also visited customers, teamed their business needs and preferences, and communicated with other Schlumherger managers and sales representative regarding strategies for developing business. They were both the beneficiaries of the goodwill Schhunberger developed with existing customers.

Ricky Parker resigned from Schlumberger on October 2, 2013. He continued to come to the Schlumberger offices and continued to have access to information regarding Schlumberger's business alter his employment ended. Without informing Schlumberger, he ordered six trucks costing approximately $360,000.()() each in January of2014. The trucks were for use in the business he was forming, PWL-LLC, which would do business under the name Professional Wireline. The trucks were designed for performing wireline, slick line and braided line services for oil and gas wells. PWL is the same abbreviation used by Schlumberger in describing its "Production Wircline" business, Parker also purchased tools, supplies, equipment, and had Myers assist him while still employed by Schlumberger. lie also registered the PWL- LLC business with the Texas Secretary of State indicating that it would do business in Texas and purchased insurance from a Texas-based insurance broker. He also completed a Vendor Profile seeking to do business with one of Schlumberger's clients stating that services would be

performed by the competing business in Texas, Oklahoma, and Arkansas.

Schlumberger confronted James Myers regarding what he knew about the competing business and he claimed to have no knowledge, and also confirmed that he would not go to work for the competing business. Contrary to his representations, SUMS Myers planned to go to work for the competing business. Ricky Parker took delivery of the trucks and then Schlumberger employees, while still employed by Schlumberger and during working hours, visited the new business location where the trucks were delivered.

James Myers also began going to the new business location, while still employed by Schlumberger, during business hours. He was also using a Schlumberger vehicle. He also worked with Parker to obtain offers of employment for Schlumberger employees and set up a meeting with Schlumberger employees to present the offers. On September 16,2014, Myers left his Schlumberger truck at the Schlumberger offices, but the tool boxes and tools normally in the truck were missing. While misrepresenting to Schlumberger that he was not resigning, and while still employed by Schlumberger, James Myers set up a meeting with several Schlumberger employees and they met with him on the evening of September 16. On September 17, 2014, cloven Schlumberger employees tendered their resignations with no advance notice to go to work for Parker and Myers in the competing business. The sudden departure of these employees and missing equipment caused Schlumberger to be unable to service customers. At the same time, Myers began meeting with Schlurnberger's customers on September 17, 2014, to solicit business from the customers. To facilitate solicitation of the customers and convince them to transfer business to the PWL, Myers took several former Schlumberger employees with him to show the customers that PWL could offer the services of the same employees who had been performing work for thcm at Schlumberger. Professional Wireline began performing work for these

76,••••:4 customers shortly after these meetings alter obtaining Master Service Agreements "MSA's" with the customers. Three such MSA's with customers (BP, XTO and Linn Energy) contain Texas choice of law and choice of venue provisions. Professional Wireline has performed work in Texas and several of the customers at issue are based in Texas.

Professional Wireline has also copied its HSE materials from Schlumberger HSE materials acquired in the purchase ofthe Parker Energy Services business. One of the employees who left Schlumberger to work for Professional Wireline, Daniel Harrison, also accessed the Parker Energy Services email account after his employment ended and forwarded client information such as work orders containing pricing and job safety analysis reports to his PWL- LJ..0 email account. Defendants also admit taking a Parker Energy Services price list which the testimony from Plaintiff established was confidential. .lames Myers also retained his cell phone he used at Schlumberger for communicating with customers, and that phone has now been given to one or the former employees who left Schlumberger to go to work for Professional Wireline so he could use it while the temporary restraining order was in place.

The breaches, both during Myers' employment and during the one-year non-

compete period of Myers' and Parker's TCN Agreements, were intended to divert the business to the new business operated by Myers and Parker. Further, the business names used by them, "PWL" and "Professional Wireline" is similar to the name used by Schlumberger — Production Wireline or"PW."

Defendants did not appear at the original hearing set for October 24, 2014, nor did they appear at the injunction hearing on December 5 or 8, 2014, Defendants did not comply with the original Temporary Restraining Order entered on October 9, 2014. In the deposition testimony of Defendants admitted into evidence at the injunction hearing, Defendants offered as an excuse for their breaches that they never read the agreements. The Court concludes that Defendants will continue to breach their agreements unless enjoined.

The Established Customers of the Schlumberger business at issue are reflected in Plaintiff's exhibit I3, The counties where Schlumberger offices managed by Defendants performed work are reflected in Plaintiff's Exhibit 74, The Court further finds that immediate and irreparable injury, loss, or damage will result to Plaintiff unless this temporary injunction is entered, Unless immediately restrained, the Defendants' breach of the agreements will cause irreparable harm to Schlumberger for which there is no adequate remedy at law, including loss of existing customers and employees, loss of business opportunities, loss of goodwill and business reputation, and loss of confidential information. Money damages cannot adequately compensate Schlumberger. A temporary injunction is necessary to preserve Schlumberger's rights pending a trial on the merits and warranted by the plain language and requirements of the agreements.

It is, therefore ORDERED, that James Myers and Ricky Parker, their agents, servants, employees, and anyone in active concert or participation with them who receive actual notice ofthis Order("Enjoined Parties") is/are hereby enjoined as follows:

1. Enjoined Parties shall not retain, conceal, move, or share with others any of Schlumberger's equipment, property, documents, reports, files, hooks, records, or Confidential Information or Company Intellectual Property.

2. Enjoined Parties shall immediately provide to Schlumberger any and all external storage devices that James Myers or Ricky Parker ever put Schlumberger Company Confidential lnlbrmation or Company Intellectual Property on that is in the Enjoined Parties' possession.

3. Enjoined Parties shall not delete or destroy any Schlumberger property, Company Confidential Information or Company Intellectual Property contained on any computer, phone, disc, data storage device, email account, or cloud storage.

4. Enjoined Parties shall not disclose Schlumberger's Company Confidential Information or Company Intellectual Property for any reason.

5. Enjoined Parties shall not directly or indirectly recruit, hire, solicit, or assist others in recruiting, hiring, or soliciting employees of Schlumberger.

6. Enjoined Parties shall not directly or indirectly work for, or assist (whether as an owner, employee, consultant, contractor or otherwise) any business or

commercial operations or wireline, slick line and braided line operations in the counties set forth in Plaintiff's Exhibit 74 which is attached.

7. Enjoined Parties shall not solicit, contact, or accept wireline, slick line or braided line work and/or services, from the Established Customers of Schlumberger in the states of Oklahoma, Texas, Arkansas, Kansas, Pennsylvania, and T,ouisiana.

8. Enjoined Parties shall not provide, or supervise, advise, manage, or serve as a consultant for businesses who are performing, wireline, slick line or braided line work for the Established Customers of Schlumberger in the states of Oklahoma, Texas, Arkansas, Kansas, Pennsylvania and Louisiana.

With respect to Defendant Parker only, the restrictions contained in Paragraphs 5-

8 shall expire on September 18,2015.

Plaintiff previously posted a $50,000.00 bond. No further bond is required. The clerk of this court shall issue a temporary injunction in conformity with the law and the terms of this Order. Until that time, the original Temporary Injunction Order entered on December l8, 2014 remains in effect.

The Court is not setting this cause for trial in connection with this Amended Temporary injunction due to the stay ordered by the First Court of Appeals.

SIGNED on this

AGREED:

/s/ JefirBarnes

Jeff Barnes, Counsel for Plaintiff

AGREED AS To FORM ONLY:

/s/ James Cleary

James Cleary, Counsel for Defendant Ricky Parker

1, knio Rabnca Bolt, Dict4.st Cierit of regt Bend County, Tom, do hceby notify fiat the fofepoing Is a ITN, Vint MCI full 03f7 of ilstracat toarcin set out as gyms of recsrd the District Court eh,ort Bead County,Texas. in Thisl/tAtcw of •_ fJ4 I 21.1.15_ A..' • 'BE ELLIJ

By

VANESSA VA UEZ

Filed

5/6/2015 12:35:21 PM

Annie Rebecca Elliott

District Clerk

Fort Bend County, Texas

Jennifer Melendez

CAUSE NO 14-DCV-218252

SCHLUMBERGER TECHNOLOGY, § IN THE DISTRICT COURT CORPORATION § Plaintiffs, § §

vs. § FORT BEND COUNTY, TEXAS §

RICKY D. PARKER and JAMES MYERS, § Defendants. § 268th JUDICIAL DISTRICT

DEFENDANT RICKY D. PARKER’S MOTION TO MODIFY OR DISSOLVE TEMPORARY INJUNCTION

Defendant Ricky D. Parker files this Motion to Modify or Dissolve the Court’s December 18, 2014 Temporary Injunction and respectfully show the following:

PROCEDURAL HISTORY

On October 9, 2014, the Court signed a temporary restraining order prohibiting Parker and Myers from competing with Schlumberger. 1 On December 5 and 8, 2014, the Court held an evidentiary hearing to determine whether Schlumberger was entitled to a temporary injunction prohibiting Parker and co-defendant Jimmy Myers from working in the wireline, slick-line, and braided line industry. The Court concluded that that Schlumberger was entitled to such an injunction and signed a temporary injunction on December 18, 2014, indefinitely enjoining Parker and Myers from working in the wireline industry. 2 Parker and Myers subsequently perfected an interlocutory appeal of that injunction, as well as the Court’s earlier order denying their motion to compel Schlumberger’s claims to arbitration. 3 On April 30, 2015, two days after oral argument to the court of appeals, Justice

1 See October 9, 2014 Temporary Restraining Order.

2 See December 18, 2014 Temporary Injunction, attached as Exhibit 1.

3 See Notice of Interlocutory Appeal.

Jane Bland issued an order providing: “The court ORDERS a stay of all proceedings in the trial court pending resolution of the interlocutory appeal, except that the trial court may hear matters relating to the temporary injunction and may issue orders that modify or dissolve that injunction.” 4 As contemplated by the court of appeals’ order, Parker asks to modify and dissolve its December 18 injunction and permit Parker to return to work in the wireline, slick-line, and braided line industry. 5 Parker is not seeking a modification or dissolution of the Court’s injunction as it pertains to Schlumberger’s confidential information.

SUMMARY OF THE ARGUMENT

The non-compete forming the basis of the Court’s temporary restraining order and temporary injunction prohibiting Parker from working expired by its own terms on October 2, 2014, one year after Parker resigned his position with Schlumberger. 6 Moreover, employees are permitted to prepare to compete with their current or former employers absent a contractual agreement providing otherwise. See Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 510 (Tex. App.—Houston [1st Dist.] 2003, no pet.). The non-compete at issue prohibits actual present competition, not preparations that would permit competition at a later date. Parker’s non- compete with Schlumberger is long expired, and there is no evidence that supports continuing the Court’s now five month prohibition on Parker’s constitutional right to work in the wireline industry. Accordingly, in compliance with the First Court of Appeals’ April 30 order, Parker respectfully requests that the Court dissolve its prohibition on Parker’s constitutional right to work.

4 April 30, 2015 Order, attached as Exhibit 2.

5 This motion to dissolve or modify concerns the Court’s indefinite injunction of Parker only. Myers does not move to dissolve or modify the injunction as it pertains to him at this time, but reserves the right to do so in the future. 6 Exhibit 3.

BACKGROUND FACTS

In connection with his sale of Parker Energy Services Co. to Schlumberger’s predecessor in interest, Parker agreed to work for Schlumberger and signed an “Intellectual Property, Confidential Information, and Non-Compete” Agreement (“ICN Agreement”), which provided:

Employee agrees for a period of one (1) year following the date of termination of his/her employment with Company, Employee will not directly or indirectly work for or assist (whether as an owner, employee, consultant, contractor or otherwise)

any business or commercial operation whose business is – even in part – in direct or indirect competition with any area of the Company’s business in which Employee was employed by Company.

* * *

If Employee is found to have breached any promise made in [the non-compete provision] of this Agreement, the one-year period specified in [the non-compete provision] shall be extended by the period of time for which Employee was in breach. 7

Parker worked for Schlumberger from September 2011 until October 2, 2013. 8 Accordingly, unless extended by the tolling provision, the ICN Agreement’s non-compete requirements expired on October 2, 2014. 9 At the December 2014 hearing on Schlumberger’s application for temporary injunction, Schlumberger elicited evidence showing that, in January 2014, Parker ordered trucks and other equipment that could be used to perform wireline, slick-line, and braided line work. 10 There was no evidence however, that Parker, individually, or that PWL, LLC (“PWL”), Parker’s employer, solicited any wireline work before September 17, 2014, fifteen days before the expiration of the

7 Exhibit 3.

8 Id.

9 Id.

10 Exhibit 4 at 35, 41, 103, 106-09, 112.

non-compete. 11 It is also undisputed, and indisputable, that PWL did not perform its first job until September 29, 2014. 12 The Court concluded that Schlumberger was entitled to a temporary injunction and signed an order that indefinitely prohibits Parker from working in the wireline industry, providing, in pertinent part:

6. Enjoined Parties shall not directly or indirectly work for, or assist (whether as an owner, employee, consultant, contractor or otherwise) any business or commercial operations of wireline, slick line and braided line operations in the counties set forth in Plaintiff’s Exhibit 74 which is attached.

7. Enjoined Parties shall not solicit, contact, or accept wireline, slick line or braided line work and/or service, from the Established Customers of Schlumberger in the states of Oklahoma, Texas, Arkansas, Kansas, Pennsylvania, and Louisiana.

8. Enjoined Parties shall not provide, or supervise, advise, manage, or serve as a consultant for businesses who are performing, wireline, slick line or braided line work for the Established Customers of Schlumberger in the states of Oklahoma, Texas, Arkansas, Kansas, Pennsylvania and Louisiana. 13

There is no temporal limitation in the Court’s temporary injunction. 14 ARGUMENT AND AUTHORITIES

Covenants not to compete are restraints on trade and unenforceable as a matter of public policy unless they are reasonable restraints. See Juliette Fowler Homes, Inc., v. Welce Assocs., Inc., 793 S.W.2d 660, 662 (Tex. 1990); see also TEX. BUS. & COMM. CODE § 15.50(a). Indeed, “[c]ovenants against competition are generally not favored by our courts because of the public policy against restraints of trade and the hardships resulting from interference with a person’s

11 Exhibit 4 at 48.

12 Exhibit 4 at 68.

13 December 18, 2014 Temporary Injunction, attached as Exhibit 1.

14 December 18, 2014 Temporary Injunction, attached as Exhibit 1.

means of livelihood.” Martin v. Linen Sys. for Hospitals, Inc., 671 S.W.2d 706, 709 (Tex. App.—Houston [1st Dist.] 1984, no writ). “Noncompetes tailored to protectable business interests have their lawful place, but they should be used sparingly and drafted narrowly. And employers must demonstrate special facts that legitimize the noncompete agreement. Squelching competition for its own sake is an interest unworthy of protection. Competition by a former employee may well rile an employer, but companies do not have free rein to, by contract, indenture an employee or dampen everyday competition that benefits Texas and Texans.” Marsh USA Inc. v. Cook, 354 S.W.3d 764, 788 (Tex. 2011) (Willet, J., concurring).

Under Texas law, Schlumberger is entitled to a temporary injunction barring Parker from working only if the evidence shows that the restraints on trade sought are reasonably limited in time, geographical area, and scope of activity to be restrained. TEX. BUS. & COMM. CODE § 15.50(a). A restraint on trade is unnecessary if it is broader than necessary to protect the legitimate interests of the employer. Gallahger Healthcare Ins. Servs. v. Vogelsang, 312 S.W.3d 640, 654 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). Whether a covenant not to compete is reasonable is a legal question for the court. Haass, 818 S.W.2d at 386. The burden of proving the necessity for and the reasonableness of the non-competition covenant falls upon the employer. Martin, 671 S.W.2d at 709. A convenant not to compete cannot be enforced absent a record that demonstrates the limitations are reasonable and as nonburdensome as possible. Marsh USA Inc., 354 S.W.3d at 785.

An Injunction Prohibiting An Employee From Working Cannot Be Properly Based Upon An Expired Non-Compete.

It is undisputed that, absent some act tolling the agreement, Parker’s non-compete expired on October 2, 2014, one year after he resigned his position with Schlumberger, and one week before this Court signed a temporary restraining order prohibiting him from working in the

6

wireline industry. 15 However, Schlumberger argued, and the Court concluded, that Parker was “preparing to go in competition” by his purchase of equipment in January 2014, which, the Court concluded, tolled and extended the non-compete past its October 2, 2014 expiration date. 16 Respectfully, Schlumberger has led the Court to error because the purchasing of equipment is not contemporaneous competition prohibited by ICN Agreement and is perfectly proper under the First Court of Appeals’ binding precedent.

In Abetter Trucking Co. v. Arizpe, the First Court of Appeals held: “[T]o resign from one’s employment and go into business in competition with one’s former employer is, under ordinary circumstances, a constitutional right. There is nothing legally wrong in engaging in such competition or in preparing to compete before the employment terminates.” 113 S.W.3d 503, 510 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (emphasis added) (citations omitted). It is only where a covenant not to compete specifically prohibits preparing to compete that one may be prohibited from engaging in such preparations. See id.

The ICN Agreement on which the Court’s temporary injunction is derived does not preclude Parker from “preparing” to compete, it provides that, for a period of one year, he may not “work for or assist . . . any business . . . whose business is . . . in direct or indirect competition with [Schlumberger].” 17 Such language only precludes Parker from working for businesses in present competition with Schlumberger. 18 It is undisputed, and indisputable, that PWL was not in present competition with Schlumberger until either September 17, 2014, when it

first attempted to solicit wireline customers or September 29, 2014, when it performed its first 15 Exhibit 3.

16 Exhibit 5 at 119-120, 122-124.

17 Exhibit 3.

18 Id.

7

wireline job. 19 Such acts would, at most, entitle Schlumberger to a fifteen day extension of the non-compete. 20 However, as the Court’s indefinite temporary injunction has now prohibited Parker from working for five months, any extension of the non-compete to which Schlumberger may have been entitled from the September 2014 solicitation and work is now long expired.

To conclude that the non-compete provision extends beyond actual active competition and precludes Parker from preparing to compete in the future, improperly adds restrictions to the agreement and is improper under Texas law. Borders v. KRLB, Inc., 727 S.W.2d 357, 359 (Tex. App.—Amarillo 1987, writ ref’d n.r.e.) (“The ultimate restraint is that a court cannot, through the construction process, make a new contract for the parties, one they did not make.”). The Court’s injunction, which penalizes Parker for preparing to compete, violates Texas public policy because persons may properly “prepare[] to compete” with their former employers absent an express agreement to the contrary. Abetter Trucking Co., 113 S.W.3d at 510. Accordingly, Parker’s purchasing of equipment in 2014 cannot have properly tolled the non-compete as Schlumberger suggested. Id.

Schlumberger has received more than the benefit of its bargain from its non-compete and Parker has been prohibited from working for months after the Schlumberger’s non-compete expired under its own terms. As the non-compete has expired and there is no evidence supporting any continued prohibition on Parker’s constitutional right to work, Parker respectfully requests that the Court modify its December 18, 2014 injunction and dissolve the portions thereof prohibiting him from working in the wireline, slick-line, and braided line industry as

19 Exhibit 4 at 48, 68.

20 See Exhibit 3.

8

required by as required by the Business and Commerce Code. See TEX. BUS. & COMM. CODE § 15.50(a).

CONCLUSION

For the reasons noted above, the defendant, Ricky Parker, respectfully requests that the Court modify its temporary injunction and permit him to return to work in the wireline industry, as is his constitutional right.

Respectfully submitted,

MARTIN, DISIERE, JEFFERSON & WISDOM, L.L.P.

By: /s/ James M. Cleary, Jr.

W. Jackson Wisdom

State Bar No. 21804025

wisdom@mdjwlaw.com

James M. Cleary

State Bar No. 00783838

cleary@mdjwlaw.com

808 Travis Street, 20th Floor Houston, Texas 77002

Telephone: (713) 632-1700 Facsimile: (713) 222-0101

ATTORNEYS FOR DEFENDANTS

RICKY D. PARKER AND JAMES MYERS

9

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing pleading was sent via e-mail, certified mail, return receipt requested, and/or hand delivery on this 6th day of May, 2015, to the following:

Jeff Barnes Via E-mail and CMRRR 7010 1060 0002 4061 8497 JACKSON LEWIS P.C.

1415 Louisiana, Suite 3325 Houston, Texas 77002

Email: barnesj@jacksonlewis.com

William L. Davis Via E-mail and CMRRR 7010 1060 0002 4061 8503 JACKSON LEWIS P.C.

500 N. Akard, Suite 2500

Dallas, Texas 75201

Email: DavisW@jacksonlewis.com

Kyle Sears Via Hand Delivery 808 Travis, 20th Floor

Houston, Texas 77002

/s/ James M. Cleary, Jr.

James M. Cleary, Jr.

296

Filed

1211212014 12 :07 :44 PM

Annla Robocca Elliott

District Clem

Fort Bend County. Te~as

Ariana Salazar

CAUSE NO. 14-DCV-218252

SCHLUMBERGER TECHNOLOGY § IN THE DISTRICT COURT OF CORPORATION, § §

Plaint itT, § §

V. § FORT BEND COUNTY, TEXAS §

RICKY D. P..L\RKER and JAMES MYERS, § §

Defendants. § 268TH JUDICIAL DISTRICT

TEMPORARY INJUNCTION

On Decemb(;r 5 and 8, 2014, the Court held a hearing on Plaintiff Schlumhergcr Teclmology Corporation's request for a temporary injunction. Plaintiff appeared at the hearing and offered evidence in support of the request for a temporary injunction. Defendants did not appear, but were represented by counsel at the hearing. The Court heard testimony and considered the evidence :md arguments ofthe parties ;md finds as follows .

The Court finds that the evidence establishes the clement<; necessary for the isslllmcc of a temporary injunction. Schlumherger has established a probable right to relief necessary to obtain a temporary injunction with respect to it<> claims for breach of contract and tortious interference with contract, tortious interference with prospective business relationships, breach of contract, breach of fiduciary duty and duty of loyalty, and aiding and abetting breach of fiduciary duty and duty of loyalty. Ricky Parker sold the ao:;set<; of his business (Parker Energy Services) to Schlumberger. He signed the agreement in Hotlston, Texas. In connection with the sale, he and James Myers entered into Intellectual Property, Confidential lnfom1ation, and Non-

Compete Agreements with Schlumhcrger (the "ICN Agreements")- Plaintiffs Exhibits I and 2.

Titc ICN Agreements contain detailed and specific definitions of Confidential Infonnation,

ROUTED TO COURT \~ · IV ·\~ ~0~ RT'D TO D. CLERK I~\\~\ \l\ ~y

297

Intdlectual Property, and Company Intellectual Property and the restrictions relating to the use. and disclosure of Confidentiallnfrmnation:

"Company Confidential Information" is defined as: technical info1mation, software, databases, methods, know-how, formulae, compositions, drawings, designs, data, prototypes, processes, discoveries, machines, inventions, well logs or other data, equipment, drawings, notes reports , manuals, business information, compensation data, clients lists, client preferences, client needs, client designs, financial inJormation, credit infonnation, pricing infonnation, information relating to future plans, marketing strategies, new product research. pending projects and proposals, proprietary design processes, research and development strategies, information relating to employees, consultants and indepemknt contractors including infonnalion relating to salaries, compensation, contracts, benefits , inceptive plans, positions, duties, qualifications, project l\:110\vkdge, other valuable confidential infonnation, trade secrets, patent applications, and related 111ings regardless of vvhether or not identified as confidential or proprietary, and similar items.

"Intellectual Property" is defined as: all patents, trademarks, copyrights, trade secrets, Company Confidential Information, new or useful arts, ideas, discoveries, inventions, improvements, soft\:varc, business information, lists, infonnation considered by Company to be confidential, designs, drawings, wntmgs, contributions, works of authorship, findings or improvements, fonmtlac, processes, product development, manufacturing techniques, business methods, tools, routines and methodology, dncumcntatinn, systems , enhancements nr modifications thereto, know-hovv, and dcvelopmcnts, any derivative works and ideas whdher or not patentable, and any other fmm or intellectual

property.

"Company lntelkctna.l Prop01ty" is defined as: all lntelk:ctual Property, that was authored, conceived, developed, or reduced to practice by Employee (either soldy or joint!)' with others) during thc term of his/her employment. Company Intellectual Property may be originated or conceived during the lenn of Employee's employment but compktccl or reduced to practice thereafter.

Company Intellectual Property shall be deemed a "work. made for hire" as that tcnn is defined by the copyright laws of the United States. Company Intellectual Property also includes any "Preexi !:iling Intellectual Properly" a!:isigned, licensed, or lransfetTed to

298

Company, and any "Pre~ x isting Intellectual Property" m wh.i ch Company bas a vested or executory inkrest.

111e .ICN Agreements also contained one year r~!slrictions on certain competitive activities after thc.ir employment ended. Paragraph 5 of the ICN Agreements provides that while employed by Schlumberger, and for a period of one year after the.ir employment with Sell lumberger ended, they would not directly or indirectly work for or assist, (whether as an owner, employee, consultant, contractor or otherwise) any business or commercial operation whose business is in direct or indirect competition with the area of Schlumbcrgcr's business in which they were employed. "1l1e area of business where James Myers and Ricky Parker were employed was the \.Vireline, slick line and braided line services for oil and gas wells. The one- year restriction pro vides for m1 extension of time while they vvere breaching the restrictions. Both Parker and !vfyers breached paragraph 5 oftheir ICN Agreements.

Paragraph 13 of the lCN Agreements contains a restriction on soliciting Schlumbcrgcr employees. Both Parker and Myers breached paragraph 13 of their JC N Agreements.

James 1vfycrs signed a Retention Bonus Contract in connection with the sale ofthe business - Plaintiff's Exhibit :i. Pursuant to the terms of the Retention Bonus Contract, Ivfyers was paid money in connection with the sale of the business and in exchange for his agreement to remain employed for a period of two years after he signed the agreement. He also agreed not to usc or disclose Con1idential Infonnaiion, and agreed to retum all documents, email communications, computer data and other Company materials, whether or not they contain Confidential Infonnation, upon the separation from employment with the Company or upon request. Paragraph 5 ofthe Retention Bonus Contract provides that during his employment vvith the Company and for n period of one year following the end of his employment, he would not:

299

(a) Solicit, contact, or acce.pt work, which was the same or substantially similar to tha work and/or services performed by him for the Company, from clients ofthe Company with \Vhom he had business dealings during his employment with the Company.

(b) Provide services (including consuliing services) \vhich are the same or substantially similar to services and /or work performed by him for the Company, for clients of the Company with whom he had business dealings during his employment with the Company.

(c) Solicit, recruit, encourage, hire or assist any other perso n or entity to solicit, recruit, encourage or hire for employment any employee or independent contractor of the Co mpan y to \Vorlc for a competitor.

(d) Directly or indirectly own, manage, operate, control, be employed by, be a consultant for, or perfonn any job li.mctions for, any business lhal is in competition with the Comp<my.

The testimony established that the Company for purposes of the Rete.ntion Bonus Contract was the Parker Energy Services business acquired by Schlumbcrgcr which provided wirclinc, slick line and braided line services 1n nil and e,as wells. The e,cne,raphic tcn·itnry specified in the Retention Bonus Contract is tlw leiTitory servi~.:ed by the oHices where Myers worked. Myers had management responsibilities over offices in Oklahoma, Pennsylvania, and Arkans as. '1l1i:~ counties served by these offices are icle.ntified in PlaintifT's Exhibit 74, which is nt1ached to this ORDER and incorporated herein .

Myers has breached paragraph 5 of the Retention Bonus Contract '11lc Retention Bonus Contrnct provides that Myers entitlement to the $100,000.00 Bonus Award is contingent upon his complying with paragraph 5 as written. Schlumberger paid th e Bonus Award to Myers

300

and he has not r~tumed the m oney.

Both Ricky Parker and James ivfyers we re in management roles at Schlumbe rger and also had eA.'tens ive contact with Schlumberger customers. ·n1ey had access to, and used, Confi dential lnfon nati on as defined in the agr0emcnts at issue. Access and usc was necessary for them to sec ure business for Schlumberger, stall' the jobs, and service th e customers. T hey al so visited customers, leamed their business needs and prd.e rences, and communica ted \.Vith other Schlumberger managers and sales representative regarding strategies for developing bus iness. They were both the benefici aries of the goodwill Schlumberger developed w it h existing customers .

Ricky Parker resigned fi·om Schlumbcrger on Octobe r 2, 2013. He continued to come to the Schlumberg~r oill.ces and continu ed to have access to information regardin g Schl.umberger's bus iness ailer his employment ended. Wi th out informing Scb.lumberger, he ordered six trucks costing approximately $360,000.00 each in January of 2014. The tnteks were for u sc in the bus incss he was fonning, PWL-LLC, w hich \vould do business under the name Professional W irc linc . Tlw trucks were designed for pcrfonning \:virclinc, s lick line and braided lin~ services fnr nil nnd 8HS \Vclls. P\VT. is 1hc same abbreviation used by Schlmnhcrr,cr in describ ing its "Production Wirdine" business. Parker also purchased tools, supplies, eq uipmtlnl, and h ad Myers assist him w hile sti ll employed by Schlumberger. He also registered the P\VL- LLC busin ess with the Texas Secretary of State indicating that it wo uld do business in Te xas and purchased insurance from a Texns-based insurance broker. He a.lso completed n. Vendor Profile seeking to do business with one of Schlumbcrger's clients stating that scrviccs would be pcrfonncd by tho:: competing business in Texas, OkJahoma, and Arkansas.

Schlumbcrger conii·onkd James lvi yers regarding what he lmcw about the competing

301

business and he claime.d to have no k11owledge, and also confirmed that he would not go to \Vork for the competing business. Contrary to his representations, James 1vfyers planned to go to work for the competing business. Ricky Parker took delivery of the trucks and then Schlumberger employees, whilt:~ stil! employed by Schlumbcrgcr and during \:vorking hours, visited the new business location where the trucks were delivered.

James M yers also began going lo the new business location, while still employed by Schlumberger, during business hours. He was also using a Schlumberger vebick. He also vwrked with Parker to obtain offers of employment for Schlumberger tlmployees and set up a meeting \Vith Schlumberger employees to present the otfers. On September 1o, 2014, ?vfyers left his Schlumbcrgcr truck at the Schlumberger o1Ticcs, but the tool boxes and tools nomwlly in the truck were missing. Whjle misrepresenting to Schlumberger that he was not resigning, and \vhile still employed by Schlumberger, James M yen; set up a meeting \Vilh several Schlumberger employees ~md the y met with him on the evening of September 16. On September 17, 2014, .:Ieven Schlumberger employees tendered their resignations with no advance notice to go to work for Parker and !\Ayers in the competing business. 'T'he snclclen departure of these employees and missing equipment cnnscd Schhunhcre,cr 1n he unable tn service cusjnmcrs. At the snmc time . lviyers began meeting with Schltnnberger's customers on September 17, 2014, to solicit business fl·om the customers. To facilitate solicitation of the customers and convince them to transfer business to the PWL, Jviyers took several fom1er Schlumberger employees with him to show the customers that PWL could offer the services of the same employees who had been performing work for them nt Schlumbcrgcr. Professional Wircline began pcd~mning work for these customers shot1ly after these meetings after obtaining Master Service Agreements "lv!SA's" with the customers. 'Iluec such rvlSA's with customers (BP, XTO and Linn Energy) contain Texas

302

choice of law and choic~ of venue provisions. Professional Wireline has performed work in

Texas and several of the customers at isst!e ai·e based iii Texas.

Professional Wireline has also copied its HSE materials from Schlumberger HSE

materials acquired in the pmchasc of1hc Parker Energy Services business. One of the employees who Jell Schlumbergcr to work for Professional Wireline, Danit:>l I-ltmison, also accessed the Parker Energy Services email account aHcr his employment ended and forwarded client infonnation such as work orders containing pricing and job safely analysis reports to his PWL- LLC email account Defendants also admit taking a Parker Energy Services price list \Vhich the testimony from Plaintiff established \Vas contidential. James !vlyers also retained his cell phone he used at Schlumberger for communicating with customers, and that phone has now been given to one of the fonncr employees who kil Schlumberger to go to work for Professional Wireline so he could u~e it while the temporary restraining order \NHS in place.

1l1e breaches, both during l\.f'yen:' employment and during the one-year non-

compete period of !vfyers' and Parker' s TCN Agreements, were intended to diveJi the business to the new business operated by Myers nne! P:u-J.cer. Futihcr, the busin.:;ss names used by them, "P\VT ." and "Professional \Vi rcl inc" is simi lnr 1n the name used hy Sch lumherr;cr - Product inn Wireline or "PW .''

Defendants did not appear at the original hearing s.:t for October 24, 2014, nor did they appear at the injunction hearing on December 5 or 8, 2014. Defendants did not comply with the original Temporary Restraining Order entered on October 9, 2014. Jn the deposition testimony of Defendants admitted into evidence at the injunction hearing, Defendants otTcrcd as nn excuse for their breaches that they never read th.~ agreements. T11e Court concludes thnt Dekndanls will continue to breach thl':)ir agreements unkss enjoined.

303

1l1c Established Customers of the Schlumberger business at issue are rdlected in Plaintiffs exhibit U. The counties \vhere Schlumberger offices managed by Defendants performed \Vork arc rellectcd in Plaintiffs Exhibit 74.

'T11c Court fmthcr finds that immediate and irrcparnblc injury, loss, or damage w ill result to Plainlili unless this temporary injunction is entered . T.Jnkss immediatel y restrained, the Delendants' breach of the agreements will cause iiTeparable hann to Schlumberger for which there is no adequate remedy at law, including loss of existing customers and emplo yees, loss of business oppo1iunities, loss of goodwill and business reputation, and loss of confidential information. i'vfoney damages cannot adequately compensate Schlumberger. A temporary injunction is ncccssary to preserve Schlumbcrgcr' s rights pending a trial on the merits and wammled by the plain language and requirements of!he agreements.

1t is, therefore ORDERED, that James 1vlyers and Ricky Parker,. their agents, servants, employees, and anyone in active conceit or pa1ticipation with them who J't:~ccivc actual notice of this Order ("Enjoined Parties") is/arc hereby enjoined as follows:

1. Enjoined Parties shall not retain, conceal, move, or share with others any of Schlumberge:r's equipment, propert y, documents, reports, files , books, records, or Confidential Tnfom1ation or Company Intellectual Property.

2 . Enjoined Parties shall immediately provide to Schlumbergcr any and all C:\icma.l storage devices that James !vlycrs or Ricky Parker ever put Schlumberger Company Confidential lnfonnalion or Company Intelleclual Property on that is in the Enjoined Pmties · possession.

3. Enjoined Parties shall not delete or destroy an y Schlumberger property,

304

Company Confidential Infonnation or Company Intellectual Property contained on any computer, phone, disc, data. storage device, email account, or cloud storage.

4. Enj o ined Pruiics shall not disclos.:: Schlumbcrger's Compan y Confidentinl Infonnation or Company Intclkctual Property for any reason.

5. Enj o in ed Patties shall not directly or indirect ly recruit, hire, solicit or assist others in recruitin g, hiring, or soliciting employees of Schlumberger.

6. Enjoined Parties shall n ot directly or indireclly work for, or assist (whether as an O\Nner, employee, co nsull ant, contractor o r otherwise) any business or comm ercial operations of w irelinc, s lick line and braided line ope rat ions in the counties set fotih in Plaintiffs Exhibit 74 \:vhich is attach.::d.

7. Enjoin ed Pmti cs shall n ot solicit conta ct, or accept w ircline, slick line or braided line work and/or services, h om the Established C ustomers of Schlumberger in the statc.s of Oklahoma, Texas, Arkm1sas, Km1sas, Penns)'lvania, and Louisiana.

R. Enjoined Parties shall not prov ide, or superv ise, advise, manage, or serve as a consultant for businesses w ho arc pc1-fonnin g, wirdinc, slick line or braided line work for the Establi shed C usto mers of Schlumbcrgc r in the states of Oklahoma, Texas, .:.\rkan sas, Kansas, Pcnnsy'lvania and Louisiana .

Plaintiff previously posted a $5,000.00 bond . The bond is increased to $50,000.00. Upon posting the additional $45,000 .00 bond, the clerk of this court shall issue a temporary injunction in conformity \Vith the law and the terms of this Order. Until that time, the

305

--···· ----- -·- -------------~~~-~=======""""""=-==-=

Temporary Restraining Order as extended in the Second Agreed Order Extending Temporary Restraining Order entered on November 13, 2014, shall be exiended and remains in effect. ~

It is further ORDERED that the trial ofthls cause shall commence on the LZ.day of -1 A"#;'

/j_--IV~'Vj ~ .c . lg

6/:tW

~-

SIGNED on this __/f;;1y of December __, 2014, at 3~ 0-~ck _fm.

COlll<T OF APPEALS FOR THE FIRST DISTRICT OF TEXAS AT HOUSTON

ORDER

Appellate case name: Ricky D. Parker and James Myers v. Schlumberger Technology Corporation

Appellate case number: 01-14-0 I 0 18-CV Trial court case number: 14-DCV -218252 Trial court: 268th District Court of Fort Bend County

The court ORDERS a stay of all proceedings in the trial court pending resolution of the interlocutory appeal, except that the trial court may hear matters relating to the temporary injunction and may issue orders that modify or dissolve that injunction .

It is so ORDERED.

Judge's signature: /s/ Jane Bland [g) Acting individuall y 0 Acting for the Court

Date: April 30, 2015

INTELU~CTlJAL PROPERTY, CONFIDENTIAL INFOUMATION, AND NON-COiY.ll'ETE AGREEMENT

TI-IIS AGREEMENT is made by and between Schlurnberger Technology Corporation, a Texas corporation acting fm· itself and on behalf of ils Affilffi~ as i'n'b~'ull}\ defined below (hcreinafler collectively referred to as "Company") and ___t:;::Lt0t._Udcv_.- _______ (hereinafter rcfetTed to as "Employee"), and ~1hall be ---effective ns of the __L_f?_ day of _y~_:h. ___ ____, 20 __u_.

ht consideration of the Company's employment of Employee, the Compuny's promise to provide Employee with Company Inlcllenlunl Propetiy, as ddiJJCd in Paragraph 5 below, the Company providing Employee with Company Intellectual Properly, or the Company providing Employee wilh access lo Company Intellectual Property, the payment of a salcuy or olher remuneration, a]](! oll1cr consideration, the Parli es agree as follow::;:

l. 1. ;,Intellectual Property" is all patents, tmdcmnrks, copyrights, lrade secrets, Comp<my Confidential Information, new or useful arts, ideas, discoveries, inventions, improvements, softwnrc, business inforrnation, lists, information considered by Company to be contldenl.iul, designs, drawings, wlitings, contributions, works of authorship, findings or improvements, formulae, processes, product development, manufacturing tcchniqtlcs, business melhods, tools, routines and methodology, documentation, systems, enhancements or modlfi.calious thereto, know-how, and developments, any derivative works and ideas whether or nol patentable, and any other form of intcllectm:tl properly.

1.2. "Company Intellcctua! Prope.rty" is all Intcllccl.ual Properly, that was authored, conceived, developed, or reduced to practice by Employee (either solely or jointly with others) dtuing the tcnn. of his/her employment. Company lnldicetual PropCity may be originated or conccivccl during the tcnn of Employee's employment but completed or reduced to practice tlu:rcafler.

Company Iutellcctual Properly shall be deemed a "work made for hire" as that term is defined by the copyright laws of the United States. Cumpany Intellectual Property also includes any ''Pre-

existing Intellectual Property" assigned, licensed, or tmnsfe.rred to Company, and any "Pre-

existing Intellectual Propctty" in which Comp<my has a vested or executory interest.

1.3. "Pre-existing httellcctual l'roperty" is all IntelkcluaJ Property that. were authored, conceived, developed, or reduced to practice by Employee before l11e term of Employee's employment with the Company begall.

1.4. "Company Confidential lnforn1ation" includes technicaJ information, software, databa ses , methods, know-how, formulae, compositions, dmwings, dc~igns, data, prototypes, pmccsses, discoveries, machine:;, inventions, well logs or other data, equipment, drawings, notcH reports, manuals, business information, compensation dala, clients lists, client preferences, client needs, client designs, financial information, credit infmmation, pricing information, infnnnation relating to future plans, marketh1g strategies, new product research, pending projects and proposals, proprietary design processes, research and development strategies, information relating to employees, consultants and independent contractors including information relating to salaries, compensation, contract:;, benefits, inceptive plans, positions, dulies, qualifications, project kJ1owledge, otlu:r valuable confidential information, trade secrels, patent applicntions, and related filings regardless of whether or not identified as confidential or propriclory, and similar items.

1.5 _"A fl'ilialc" means any entity whieh now or in the future directly or indirectly controls, is

lntcflcctual Property, Coniid<:n(ial lnfommtinto ami Nr,n-Compc1~· Agrecm~nl, M3rch 2011 r~r.c 1 1 EXHIBIT

255

controlled by, or is u11dcr common control with Company, where "control" in relation to a company means the direct or indirect ownership of ut least fifty-percent of the voting securities or shares.

2. Employee agrees to promptly disclose in writing to Company all Company Intellectual Property.

Company Intellectual Properly shu!l remain the exclusive properly of Company whether or not deemed to be a "work made for hire" within the meaning of the copyright laws of the United States.

Any and all rights, title, nnd ownership interests, including copyright, thal Employee may have in or to Cmnp<my Intellectual .Property or any tangible media embodying such Company Intellectual Property, as well as any U.S. and i.ntemational applications for patent or copyright registrations thereon duJing and subsequent to his/J1er employment nrc hereby assigned to Comp<my, and Comp<my shall have the royalty-free right to usc such existing Company TnlcllecLual Property without tmy fmthcr agreement between Company and Employee. Employee, however, does not assign or agree to assign to Company any Pre-existing h1tellcctual Property.

During and after employment with Company, Employee shall assist Company in obtaining patents, copyrights, and other indicia of ownership, protection for such ir1v1.mtions and copyrightable materials, including completing and executing any necessary documents, contracts, or agreements, with re~pect to ull such Company Intellectual Property which Company shall, in its sole discretion, determine lu obtain.

Employee shall disclose ln Company Employee's complete written record of any Company Intellectual Prope1ty, including any patent applications, correspondence with patent agents and patent offices, research, written deficripliom; of the technology, test data, market data, notes, and any other infonnation relating to Company Inlcllectual Property. Employee shall also identify all co-inventors, co-authors, co-composers, partners, joint venturers, assistants, or other people to whom U1e Company Jntcllecf:ual Property was disclosed in who le or in parl, who participated in developing the Company Intellectual Property, or who claim an interest in the Company Intellectual Property. Employee's disdosure shall conform to the policies and procedures in place at the time govcming such discLosures.

Employee shall not destroy, modify, alter, or secret any document, tangible thing, or infonnation relating to Company Intellectual Prope1ty or Comptmy Intellectual Property except as occtirs in the ordinary perfom1an.ce of Employee's employment.

3. Except as required in performing EmploYee'~ duties for the Company, Employee will not remove fi·om Compru1y's facilities any Company Confidential Information including but not limited to equipment, drawings, notes, reports, mnnuals, invention records, soflwan:, <.:ustomer information, well logs or other data, or other mntcrial, whether produced by Employee or obtained from Comp;my. This includes copying or transmitting such infonnation via Personal Digital Assistants, mobile phones, external hard drives, USB "J1ash" chives, USB storage devices, FireWire storage devices, f1oppy discs, CD's, DVD':;, personal cmuilnecounts (includi11g web-based email accounts such <JS Holmail, Gmai\, Yahoo), memory cru·cls, Zip discs, and all other similar media which can be used to transmit electronic data.

4. Employee agrees to deJivcr all such Company Confidential 1nfommtion and materials to Company immcdiatcly upon request, and in any event upon termination of employment. If any such Company Confidential Information has been stored on any personal electronic data storage device, including a home or personal computer, Employee agreeR l:o make available the device to the Company for removal <mel/or copying of the information. Employee will not publish or disclose or lra11sfer to any person, other than in the proper perfom1ance of Employee's duties for lhe Company, or usc in any way llllwr tban in Company's business, any trade secrets or confidential technical or business

fntclkclunll'ropcrly, CunfitleJJliul lnfo1mn1ion nnd Nnn·Compctc Agn,cmcnl, M01rd12DJ I P;~gc 12

256

information or material of Company-including Company Intellectual Property and Comp;my ConJidential Tnlon:nntion, either during or afl:er employment with Company.

5. Upon the signing of' this Agreement, or reasonably soon tbereallcr, and in any event prior to the tem1ination of Employee's employment, the Company will provide Employee and Employee will receive nccess to Company Confidential Information which is proprietmy, confidential, valuable, and relates to Company' s busirwss.

Employee recognizes and aclmowledges that Company Confidential Information, both tangibly recorded or memorized, constihttes valunb.le trade secrets belonging to Company. In order to protect Company against any unauthorized usc or disclosure of Company Con-fidential lnfonnntion, nnd in exchange for the Company's promise lo provide Employee with access to Company Confidential Infom1atiou and other consideration pLior to the termination of his/her employment, Employee agrees thnt for a period of nne (1) year following the date of termination or his/her employment with Company, Emp loyee will not directly or indirectly work for or assist (whether as m1 owner, employee, consultant, contractor or olhenvise) any business or commercial operation whose business is-even in pmt-in direct or indirect competition wilh uny area of the Company's business in which Employee wa~ employed by Company. Moreover, Employee agrees that Company may provide u copy of this Agreement to any entity for whom Employee provides services in the one ( 1) year pc1iod following the date of termination of Emp loyee's employment with ComJlany.

Employee recognizes atld acknowledges that the Comptmy's business, research and products nrc by nature worldwide in scope, and that the Company is not required to maintain a physical location in close proximity to its customers. Employee agrees that in order to protect Company Confidential Intormation, business interests and goodwill, the foregoing restriction on Employee's snbsequcnl employment shall extend to any county, parish, borough, or toreign equivalent: (1) in which Employe(: hod a customer or service assignment for Company in the one-year period precc.:ding Employee's termination; (2) in which Company has ClJstomers or service assignments about which Employee obt~1ined Company Tntcll.ectual Property during his/her employment with Company; (3) in which Company has a manufacturing site, development site, work site, jub site, or offices; and/or (4)

in which nny business or commercial operation whose busi11ess (a) is--even in part-in dirccl or indirect competition with any area of the Company's business in which Employee was emp.loycd by Company or (b) has a manufacturing site, development site, work site, job site, or offices.

Employee ~hall comply with all Company's policies nnd codes of ethics as it may promulgate 1i·mn lime to lime, including those related to intellectual properly, confidential infom1ation, Company ConiidcJ1tial lnforrnation, and Company Intellectual Properly. Nothing in those policies sh<ill be deemed to modify, reduce, or waive Employee's obligations herein and in the event of any conflict or ambiguity, this Agreement prevails.

<i. The obligations in the foregoing sr.:ction do not apply lu Employee il'Employce is a lawyer licensed to practice law in any state in t11e United States and whose employment for the Company involves the practice of law where such duties in this Agreement would abrogate, modify, or contmdicl uny applieablc rules of professional conduct, codes of ethic~, or profcs~ional responsibility obligations.

Hm.vever, to the maximum extent possible all duties in this Agreement-including dulicli of nondisclosure and confidentiality-shall be applicable to such lawyers to the extent they do not abrogate, modify, or contradict any applicablt: rules of professional conclucl, codes of ethics, or professional responsibility obligations.

7. Tf Employee is found to have bre:ached any promise made in Paragraph 5 of this Agreement, the one-

year period specified iJ1 PHrugraph 5 shall be extended by U1e period oftime for which Employee was in breach so !hat Company has the full benefit of the one-year periods specified in Parag-raph 5.

hllclleclual Pmperty, Conlidenliulln immntion and Non-Cmnpo!e 1\gre~mcnt, Mnn:h 2011 IJ l'iljlC

257

8. Employee acknowledges that Company has agreed to provide Employee with Company Confidential Information during Employee's employment with Company. Employee further acknowledges that, if Employee was to leave the employ of Company for any reason and use or disclose, directly or indirectly, Company Confidential Information, that such use and/or disclosure would cause Company irreparable hann and injluy for which no adequate remedy at law exists. Therefore, in the event of the breach or threatened breach of the provisions of tills Agreement by Employee, Company shall be entitled to obtain injunctive relief to enjoin such breach or threatened bJeach, in addition to all other remedies and alternatives which may be available at law or in equity. Employee acknowledges that the remedies contained in the Agreement for violation of this Agreement are not the exclusive remedies which Company may pursue.

9. Company has attempted lo place the most reasonable limitations on Employee's subsequent employment opportunities consistent with the protection of Company's valuable trade secrets, Company Confidential Information, business interests, and goodwill. Employee aclmowledges that the limitations contained herein, especially limitations as to time, scope, and geography, are reasonable. Jn order to accommodate Employee in obtaining subsequent employment, Company may, in its discl'elion, grant a waiver of one or more of the re~trictions on subsequent employment contained in Paragraph 5. A request for a waiver shall be in writing and must be received by Company at least forty-iive (45) days before the proposed starting dale of !he employment for which Employee is seeking a waiver. The request must include the full name and address of the organization with which Emp loyee is seeking employment; the department or area in \vhich Employee proposes to work; the position or job title to be held by Employee; nnd a complete descdption of the duties Employee expects to perform for such employer. ff Company decides io grant a waiver (which shall be solely in Company's discretion), the waiver may be subject to such restrictions or conditions as Company may impose and shall not coastiluf:e a waiver of ;my other tcnn.

10. Any waiver of any term of this Agreement by Company shall not operate as a waiver of any other term of this Agreement, nor shall any faiJme to enforce any provision of this Agreement operate as a waiver of Company's tight to enforce any other provision of this Agreement.

11. Company does not wish to receive fro m Emp loyee any confidential or proprietary information of a third party to whom Employee owes an obligation of confidet1ce. Accordingly, Employee represents and warrants that any information Employee either discloses to Company or uses while employed by Company is not subject to any obligation of confidentiality to any forme-r employer or other third parly. Employee acl::nowlcdgcs that his Ot'llcr performance of this Agreement and his or her duties as an employee of Company do 11ot and will not breach uny agreement to keep in confidence propdetary inionnation, lmowledgc, or dala acquired by Employee prior to Employee's emp loyment with Company.

12. Employee is not a. party to any other agreement thnt will interfere witl1 Employee's full compliance with this Agreement or that otherw·ise may restrict Employee's employment by Company or the performance of Employee's duties for Company. Employee agrees not to enter int.o any agreement, \'.rhether oral or \Vritten, in conflict with tl1is Agreement.

13. Employee agrees lhat while employed by Company, and during the one-year period following (]1e termination of his/her employment, Employee \Vill neither directly nor indirectly, on his/her mvn behalf or on behalf of any person or entity, in any cnpucity, recruit, hire, solicit, or assist others in recruiting, biting, soliciting any person, who is, or was, dudng the period ofEmployce's employrm:nl with Company, an employee or consultant of Company.

14. This Agreement may be enforced by, shall inure to the benefit of, and be binding upon Company, its successors, and assigns. This A!:,•Tcemcnt is binding upon Employee's heirs and legal representatives.

By accepting a transfer to an Affiliate of Company, Employee agrees to the automatic assignment of

lntcllcctunl Property, Confirlcmial Infom~r,tion nnd Non-Compete Agreement, Mnrch 20 II P~gel t\.

this Agreement to said Affiliate conlcmporancolL';ly with the <1cceptance of such transfer, subjcct to subsequent agreements executed by Employee and A!Tiliate of Company or Company, and to the !bllest extent allowed by law.

15. By acceptli1g a transfer to an Aftiliate of Company, Employee agrees to the automatic application of all of lhe tem1s of this Agreement to said Affiliate contemporaneously wi th !he acccptrmcc of such transfer, subject to subsequent agreements executed by Employee and Affiliate of Company or Company, and to the fullest extent. allowed by law.

16. This Agreement or any part thereof may be moditied, superseded, waived, or amended only in writing signed by an authorized reprc);entativc of Company and by Employee. Any appendices to this Agreement are part of this Agreement ns if wholly incorporateu herein.

17. Because Employee may work w vario\ls locations 1.md to eliminate potential uncertainLy over the governing law, this Agreement shall be interpreted and constmed exclusively in accordnnce with the laws of the State ofTex.as. Venue for nny dispute(s) arising fi'om or related to this Agreement shall lie solely, and h; convenient, in Fort Bend County, Texas. Employee consents to the choice of law and venue provisions of this Agreement and agrees that Employee will not contest these provi~ions in any future proceeding(s). Employee agrees that Texas, as Company's United Slates Headquarters , has a grel'.ter legal interest in matters relating to this Agreement than any other slate, bali a greater public policy interest in matters relating to thi9 Agreement thau any other state, and has a greater factual relationship to matters relating to this Agreement than any other state.

18. Should any portion of this Agreement be held judicially invalid, unenforceable, or void, such holding will not have the effect of invalidating or voiding the other portions of this Agreement not so declared or any part thereof, the particfi hereby agreeing that the pmiion so held to be invalid, unenforceable, or void shall be deemed amended, reduced i.n scope or deleted to the extent required to be valid and enforceable in the jurisdiction of such holding. The pmties agree that, upon a judicial finding of invalidity, uncnforccability,· or voidnbillty, the court so finding may rcfom1 t.hc agrl~cmcnt to the extent necessary for enforceability, nnd entel' an order enforcing the rcfonncd Agreement. No court ordered rcfmmution or amendment shall give rise loa findjng of knowing, willfulness, or bad faith unreasonableness against Company regarding this Agreement.

19. This Agreement and Appendix contains the cutire agreement between the parties with respect to the subject matter of this Agreement and supersedes <ll1Y previom understand ings or agreements, whether written or oral, in respect of such subject matter.

SCHLUMBERGER TECHNOLOGY f HEREBY CERTiFY THAT I HAVE READ CORPORATION AND UNDERSTAND TinS AGREEMENT, AND THAT J AGREE TO ATIIIlE BY ITS TERivlS.

Signed : _\.:u::b..,_,_~,v.""'~"->,\""'.Jl-'-··-~.c;;

- =~a'-<----

Prlntcd Name: JJ_O \~)d~-~S< - \-b c;,___ _ )-

Title: ~~¥ -----~----­ Date: .____._~~~-_,_,_\I_·- --- -----·--·--..-

lnldh'(:lllal Propi!l'ly, Confidential lnfonnation und Nolt-Ct>mpctc Agrcr.mcn1, M~rch 2CII I Pllt•,t: 15

1

1 REPORTER ' S RECORD VOLUME 3 OF 5 VOLUMES

2 TRIAL COURT CAUSE NO. 1 4- DCV-218252 FILEDIN 'I st COURT OF APPEALS

3 SCHLUEvlBERGER TECHNOLOGY IN THE DISTRICT I-~-{JSEfi?N, TEXAS CORPORl\_TION 1/2/2015 3:39:27 PM 4 CHRISTOPHER A. PRINE vs . FORT BEND COUNTY , pl,e_xll;.s 5 RICKY D . PARKER AND JAMES 6 £'1 YERS 268TH JUDICIAL DISTRICT

7 8 9 10 TEMPORARY INJUNCTION HEARING 11 December 5 , 2014 - Afternoon Session 12 13 14 15 On December 5 , 2014 , the following proceedings came 16 on to be held in the above-tit l ed and numb ered cause 17 before the Honorable Brady G . Elliott , Judge Presiding , 18 held in Richmond , Fort Bend County , Texas. 19 Proceedings reported by computerized stenotype 20 machine.

1 APPEARANCES

2 MR . W. JACKSON WISDOM MR . JA~JES " JIW' M. CLEARY 3 MARTIN DISIERE , JEFFERSON & WISDOM 808 TRAVIS, 20TH FLOOR 4 HOUSTON , TEXAS 77002 Telephone : 713.632.1700 5 Counsel for Defendants

6 ME . BILL DAVIS MR. JEFF BARNES 7 JACKSON LEWIS, P.C.

1415 LOUISIANA, SUITE 3325 8 HOUSTON , TEXAS 77002 Telephone : 713.568.7860 9 Counsel for Plaintiff

3 _,<.:

1 "Q: What were yo u signing? 2 "A: Hon estly , I don't remember on that 3 text . 4 "Q: Did i t relate to P . W. L . business? 5 "A: I don ' t know. I don't remember ."

6 IvJR . DAVIS: Moving to Page 7 , -J_,lne ' Jc:: :

7 "Q : Page 3 , we have a text September 13 , 8 2014 from you to Mr . Myers that says -- quote -- 9 'T esting , ' and it's ' L . U . B .', v.1hich I understand is 10 lubricator dash , quote-- ' Wednesday ' ? 11 "A: Uh - huh. 12 " Q: Is that what yo u were talki n g about , 13 testing a lubricator? 14 "A: That's correct . 15 "Q: And that ' s for the P.W.L. business , 16 right? 17 " A: I believe it was ." 18 IvlR . DAVIS: Mov ing down to Page -- to 19 Li ne 25 of Page 7 : 20 "Q: We 11 , so v.1 e ' v e got three texts vJ hi le 21 Mr. Myers was still employed by Schlumberger where 22 you ' re texting him about what ' s going on? 23 "A : What I ' m doing. 24 " Q: At the P.W . L . competing business , 25 right?

1 to sig nin g it, did you? 2 "A: No . 3 "Q: But i t ' s your position now that you 4 shouldn ' t have to abide by it , right? " 5 MR . DAVIS : And then Mr . Cleary ob jected. 6 fvlR . CLEARY: I ' l l withdraw the objection . 7 "A: No , I never read it . 8 "Q: So you can ' t po in t to anything in 9 there that you th in k i s unreasonable? " 10 t1R . D.i\ VIS : There ' s an objection . 11 t1R . CLEARY : Yeah , it's a l ega l 12 con c lusion . 13 THE COURT: Overru led. 14 "A : I don ' t kno1r1 . I ha ven ' t read it. " 15 lv:iR. Dli.VI S : And mo v ing down to Page 44 , 16 Line 9 : 17 "Q: Let ' s go through the calendar here . 18 We ' ve got October 2 , 2013 is yo ur best recollection of 19 when yo u r es igned from Schlumberger , right? 20 "A : Correct. 21 "Q: And we know th at on September 17, 22 which is wi t hin one year , yo u were hi ring employees of 23 Schlumberger to work f or your new busin ess , right? 24 "A: Uh-huh. 25 "Q: And y es? You ne ed to answer yes or

43

1 "A: That ' s correct. 2 "Q: But it's your position , even though 3 that -- even though that you signed this as part of the 4 asset purchase agreement , that it ' s unreasonable or that 5 you shouldn ' t have had to comply with that? " 6 MH . DAVIS : And there ' s an objection . 7 t1R . CLEAFY: Yeah, he ' s asking him to give 8 a legal conclusion as to whether or not the agreement is 9 enforceable. 10 THE COURT: Overruled . 11 "A: I did not k n ow this was part of the 12 asset purchase. 13 "Q: Well , you know you signed it on 14 September , 10 , 2011, right? 15 II Jl.. : Uh-huh . 16 "Q: And you didn ' t ob j ect to signing it , 17 did you? 18 "A: No. Some of the guys did . 19 "Q: Well , we ' ll talk about that in a 20 second . 21 " You didn ' t -- Before you were paid 22 1 7 million as part of the asset sa l e , you didn't raise 23 your hand and say -- quote -- ' Wait a minute , that 24 vJ a sn ' t par t of the de a l , I ' m n ot s i g n in g t h i s , ' did you ? 25 II Jl.. : No ."

1 optional completeness , I'd like to read Page 62 , 2 Line 20 : 3 "Q: Did you talk to Mr . Myers about what 4 tools and equipment might be needed? 5 "A : No ." 6 ME . CLEAEY : That's it. 7 t1P. . DAVIS: Okay. Page 63 , Line 22: 8 "Q: It looks like you got your insurance 9 fr om Upstream Brokers out of Houston, Texas , right? 10 "A : Correct ." 11 L'1R . DAVIS : Page 64 , Line 18: 12 "Q: t1r. Parker , it ' s my understand in g 13 that in addition to the wireline trucks , you also had 14 pickup trucks that you were assigning to the operators 15 when they came over to P . W. L ., correct? 16 "A: Yes, I had pickup trucks that I had 17 bought. 18 "Q: And when were those purchased? 19 "A: I don ' t remember . End of August , 20 first of September . 21 " Q: Hov-1 many v-1as it , eight? 22 "A: I believe it was eight or nine . 23 Seven , eight , or nine . Eight or nine . 24 "Q: And you bought th ose - - it's you r 25 testimony yo u bought them n ot knowing how man y people

68

1 somewhere , right? 2 "A: Eventual l y. 3 "Q: Okay . But you actually went to work 4 for P . W. L . the very next day , right? 5 "A: The very next day , yes, sir ." 6 MR . CLEARY : If we could go back to 7 Page 1 3 , beginn i ng at Line 13 : 8 "Q : The contact on the l 7th was a phone 9 call or meeting? 10 "A: lVJeet ing. 11 "Q : Did you arrange for the meeting 12 before the 17th? 13 II .l:l.. : No , sir . 14 "Q: You just showed up? 15 " A: That ' s right . 16 "Q: At what location? 17 " A: l'1cAlester. " 18 lvJR . BARNES : Page 1 8 , Line 22 : 19 " Q: When was the first job for X . T . O . for 20 P . tAI . L . ? 21 "A : September the 29th ." 22 MR . BARNES : Page 20 , L ine 1 8 : 23 "Q: What commu nicat i ons did you have vli th 24 Unit after you left Schlumberger? 25 "A: Told them the same , that I had

103

1 when you questioned him about the drop in revenues while 2 he was there , about business being slow?

3 A I would tend to question it now 4 MR . WISDOM : Ob j ect i on ; based on

5 speculation. 6 THE COURT : Overruled .

7 THE WITNESS : I would question it now 8 based on what I know.

9 Q (BY MR. DAVIS ) What is it that you ' ve learned? 10 A That Mr . Myers has l eft the company a n d gone to

11 work for the competition and l eft without , you know , 12 discussing with us. You know , that's not normal even , 13 you know , in a retirement situation . 14 Q Well , you heard the testimony from Mr . Myers 15 and Mr . Parker about the text messages . Does that cause 16 you any concern? 17 A Yes . The text messages seem to show that 18 Mr . Myers was -- and Mr. Parker were getting equipment , 19 getting tools , and getting M. S . A . ' s for their competing 20 business . 21 MR . WISDOM : Object i on. It 's speculation 22 and misstating wha t the documents actually say . 23 THE COURT : Overr uled. 24 Q (B Y MR . DAVIS) And was this in the same 25 timeframe that the revenues for that location were

106

1 MR . WISDOM: Ob j ection ; le ading . 2 THE WITNESS : That ' s correct . 3 THE COURT: Don ' t lead . 4 Q {BY MR. DAVIS) Now , I don ' t want to get bogged 5 down in the missing tools . Now we have -- but we do 6 have the too l s from the rat pack . Have you done an 7 investigation to see if Mr . Myers actually dropped them

8 off a. L ~

the McA l ester location?

9 A Yes, we have . Immediate l y upon my arrival , one 10 of our concerns was the security of the McAlester 11 facility , concerns of missing tools and such . So I 12 immediately had the crews go down to McAlester and go 13 through the equipment and see what we have , inventory , 14 and verify if any of the tools from -- that were in the 15 rat pack were dow n there. 16 And so the crews went down there, and they 17 started moving the equipment and informed me that, no , 18 none of the tools were there . 19 Q And you 20 A Similar tools were there , but not the ones that 21 we specifically were looking for . 22 Q Okay. Would these tools be helpful for whoever 23 was going to take over for Mr . Myers in servicing the 24 customer? 25 A Yes, sir . It would save them some money , and

107

1 then some of them had to be , you know , ordered , may take 2 a l ittle bit longer . And not only that, they \•iere kind 3 of expensive . Specialized overshots for fishing 4 operations were kept in Mr . Myers' pickup . He >vas the 5 fishing expert , also. And so we don't have any of 6 those. 7 Q And you ' ve heard -- well , you ' ve testified 8 about all of the customers he visited on the 17th . 9 Would those tools be helpful if he was going to begin 10 working immediately for customers for Professional 11 \Alire line? 12 A Yes , sir , they would . 13 Q And outside of the rat pack , have you done any 14 investigation to see whether there were any other 15 missing tools? 16 WeLl , let me ask a different question . 17 Do you have any -- was Mr . Myers 18 responsible for ordering tools for Schlumberger? 19 A l-ie was. And I went back and had -- as this 20 rolled out , I went back and had our financia.l contro ll er 21 pull our M. N . S. report and looked into the purchases 22 that we bad done through out that year . And I guess 23 starting back in April , we had purchased what could be 24 construed as tool i ng out a truck . I mean , there were 25 some specific gauge rings ranging from-- I believe it's

108

1 one-and-three-quarter , all the way up to 2 four-and - a-half-inch O.D . 3 THE COURT REPORTER : I'm sorry. Up to? 4 THE WITNESS: Four-and-a-half-inch O.D . 5 Q (BY MR. DAVIS) So you -- are you saying that 6 Mr . Myers was ordering tools while he was at 7 Schlumberger in April? 8 A Yes , sir, he vJas . He did it throughout the 9 year . 10 Q Okay. But a particular tool order , what was 11 your concern about that when you say " tooling out a 12 truck " ? 13 A My concern was that he had maybe taken these 14 tools and put them on the new trucks that he -- that 15 they had at Profession Wire l ine . 16 Q Well , what was it? 17 tviR . vH S DOlVl: Your Honor , I object to the 18 speculation of the illegal activity . He has no 19 evidence . He ' s simply putting his conspiracy theories 20 out there with no foundat i on. 21 THE COURT : Overru l ed . 22 Q (BY MR . DAVIS) Did you have any new trucks 23 going into service in April of 2014? 24 A No , sir , we didn ' t. 25 Q And the order you looked at , what did it l ook

109

1 like was bei n g ordered? Did it have to do with a new 2 t r uck? 3 A Yeah , it would be gauge rings for a new truck. 4 And then the other thing I noticed on this specific 5 order is the overshots , and these grapp l es that are on 6 here are required for overshots. Can ' t find those 7 overshots - - I mean , those grapples . They ' re missing . 8 Q And what is Exhibit 8? 9 A Exhibit 8 is a - - it ' s from our-- it ' s a 10 report from our financial contro l ler that shows the 11 P . O ., the date , the vendor , the part number , and the 12 description of the tools that were ordered . 13 Q And is Exhibit 8 a record kept in the ordinary 14 course of a regularly conducted business activity at 15 Schlumberger? 16 A For Sch l umberger , yes , sir. 17 Q And was making this record a regular practice 18 to document that activity? 19 A Yeah , it ' s a transaction from one system to the 20 other . And we run the reports , you know , to check the 21 purchases and stuff . 22 Q And was th i s record made at or near the time by 23 or from i nformation transmitted by someone wit h 24 knowledge of the infor mation in the report? 25 A This report was made by our financial

112

1 It ' s stil l hearsay . It still should not be admitted . 2 And it ' s sti l l irrelevant . 3 THE COURT : Well , as to the hearsay 4 objection , as information that ' s compiled in the regular 5 course of business, therefore, it ' s not hearsay. \~lith

6 the annotation removed from it , I ' ll admit it on that 7 basis. 8 DI RECT EXAM I NAT I ON ( CONTI NUED) 9 BY I'1R . DAVIS : 10 Q Okay . We talked about the -- 11 THE COURT REPORTER : I ' m sorry. That was 12 No . 8? 13 HR . DAVIS : Yes . 14 Q (BY MR . DAVIS) Mr . Myers , we talked about the 15 first section . I s that the order for the - - what we 16 call " loading up a neitJ truck ," so to speak , that ' s all 17 the gauge rings? 18 The gauge rings , yes , sir. 19 Q Okay . And , again , you weren ' t putting a nevJ 20 truck into service around that time? 21 A No , sir . 22 Q What about the May , June , July , no new t r uck? 23 A ( Shakes head negative l y ). 24 Q And what about the next section? What -- what 25 are your concerns about the orders there?

1 REPORTER ' S RECORD VO L UME 4 OF 5 VO L UMES 2 TRIA L COURT ClWS E NO . 14 - DCV-218252 FILEDIN 1st COURT OF APP EALS

3 SCHLUIV!BERGER TECHNOLOGY DISTRICT Jt~'?N , TEXAS IN TI-iE

CORPOEATION 1/2/2015 3: 39:27 PM 4 CHRISTOPHER A. PRINE vs. FOET BEND COUN T Y , 'PleJ..I~s 5 RICKY D. PARKER AND JAMES 6 !VlYERS 268TH JUDICIAL DISTRICT

7 8 9 10 TEMPORARY I NJUNCTION HEARI NG 11 12

13 On December 8 , 2014 , the following proceedings came 14 on to be held in the above-titled and numbered cause

15 before the Honorable Brady G . Ell i ott, Judge Presiding , 16 held in Eichmond , Fort Bend County , Texas.

17 Proceedings reported by computerized stenotype 18 machine .

1 APPEARANCES

2 MR . W. JACKSON WISDOM ivJR . J Ar'"lES " JIM " lvJ . CLEARY 3 MART I N DISIERE , JEFFERSON & WISDOM 808 TRAVIS , 20TH F LOOR 4 HO USTON , TEXAS 77002 Telephone: 713 . 632 . 1700 5 Counsel for Defendants 6 !VlR . BILL DAVIS l"iR . JEFF Bll.RNES 7 JACKSON LEWIS , P.C .

1415 LOUISIANA , SUITE 3325 8 HOUSTON, TE XAS 77002 Telephone: 713.568.7860 9 Counsel for Plaintiff

119

1 patience with me. I have tried a few judges ' patience 2 in the past , and today was no exception. I am 3 passionately committed to the idea that these men need 4 to be able to make a living during the holidays , and I 5 think my commitment is based solidly not just on moral 6 principles but the law of Oklahoma , which should apply , 7 or the law of Texas , if the Court chooses to apply. 8 Thank you. 9 THE COURT : Counsel , if I sounded a little 10 bi t perturbed , we seemed to be covering the same ground, 11 but when I asked you to be direct , you were , and I 12 appreciate that . 13 Do you have a rejoinder? 14 MR . DAVIS : I ' m sorry, your Honor?

15 THE COURT : Do you have a rejoinder? 16 FINAL STATEMENT

17 MR . DAVIS : Your Honor , just quickly on 18 this -- the notion that there ' s no evidence that 19 Mr . Parker -- or that the agreement didn't pr o hibit 20 Mr. Parker from preparing to compete. The language of 21 the agreement talks about performing work . And the 22 evidence is work for Schlumberger would include ordering 23 things , p l anning , preparing ; and he was do i ng work for 24 the new business . To the extent they ' re saying : Well , 25 the new business didn ' t have its doors open yet , what he

120

1 was do i ng -- and I think the evidence shows this is 2 he had an ex i sting bus i ness , C . C . T . S. , which 3 Schlumberger was okay with , but he was doing some of

4 this under C . C . T.S ., qu i te naturally probably because 5 some people may not want to deal with the startup and

6 then dealing with the C.C.T . S. business . 7 THE COURT : What do you say , Counsel , as 8 to the questions raised by the defense that the wording

9 of the contract seems to avoid geographic limitations 10 that the law i mposes on non-compete agreements? 11 MR . DAVIS : Well , you ' ve got two different 12 types of restrictions . One is the customer restriction , 13 which I think the law is clear . As long as it ' s limited 14 to customers wi th whom they had dealings , that takes 15 care of the geographic area. I think the law is clear 16 on that . On a customer restriction , you don ' t need to

17 say counties , states , United States . 18 THE COURT : Well , in that same vein , then , 19 if I take your argument to its natural conclusion,

20 Mr . Parker could solicit business from the next-door 21 neighbor of t h e Schlumberger operat i on as l ong as they

22 had not conducted business with Schlumberger? 23 MR . DAVIS : Correct . 24 THE COURT : I seem to look at that rather

25 broad provision of the agreements as broader than that .

1 know , they have slickline business in other states , but 2 we didn ' t offer testimony of that , nor are we asking

3 that it go that far. It was focused on the Parker 4 Energy Service business that was purchased that

5 Mr . Parker continued to manage and then Mr . Myers 6 managed after he l eft . That's why we limited the 7 testimony to those states. 8 THE COURT: But you would agree that they

9 could be -- that l anguage would be interpreted to be

10 broader than that? 11 MR . DAVIS : I don ' t believe No. 1 could 12 because it talks about in which they had an assignment 13 or customer. 2 is customers and assignments where they 14 used intellectual property . And 3 talks about a

15 manufacturing site , development site , but that ' s not an 16 issue in this case.

17 And then 4, it appears to me it talks 18 about the company ' s business in which employee was 19 employed by the company, and then they viewed this

20 business as the Parker En e rgy Services business , not the 21 whole slickline business , so I just don ' t read it as

22 broadly as they do . 23 THE COURT : Okay . Go ahead . 24 MR . DAVIS : I believe that ' s all I have . 25 THE COURT : The purpose of a temporary

123

1 injunction is to n o t re solve the final issues between

2 the parties but to determine whether the -- who would be 3 the prevailing party in the final lawsuit . In that 4 regard , it ' s not my task here today to assign damages ,

5 to assign a particular dollar amount to any violat i ons 6 that may or may not be in the final analysis proved ;

7 it ' s simply to focus on the activities of Mr . Parker and 8 his current company and Mr . Myers . Those are the tw o 9 issu es that ha ve to be resolved . 10 In that regard , I ' l l start out with

11 Mr . Myers. And , firstly, I will say that it ' s my 12 decision that Texas law applies . The parties did 13 business in Texas . Clearly Mr . Parker, by his

14 application for the new company to do business in Texas , 15 showed very clearly he was doing business in Te xa s ; and

16 as pointed out by the opinions of the Courts o f Appeals 17 and the Supreme Court , the oil and gas business is n ot

18 confined to one state. It's not on l y multinational , 19 it ' s multig l obal; and they take that in consideration in 20 determining these particular conf licts that arise . In

21 this regard , very specifically , the two agreements that 22 I'm ruling on , the I.C . N . and the retention bonus

23 agreement , specif i cally say the laws of Te xas shall 24 apply ; and the activity was in Texas , so I find that 25 Texas law app l ies .

1 In that regard as directed to Mr . Myers , 2 it's clear he violated both the I.C . N. and retention

3 bonus agreement ; and with that finding, I issue a

4 temporary injunct i on against him as to those issues ; but 5 in that temporary injunction order to be produced, it

6 will be focused as the agreement reads , on the 7 businesses in the areas in which Mr. Myers had 8 responsibility.

9 And I point out , counsel , and I appreciate 10 Mr. Myers is a unique manager ; he likes to get his hands 11 dirty ; he lik es to be out in the field . But he, by 12 definiti on i n the agreements , is an operating manager ;

13 and as such , he has responsibility for more than just

14 the particular truck in the particular county or parish 15 in which he's involved ; therefore , the temporary 16 injunction applies .

17 As to Mr. Parker , I think one cannot look

18 at it with blindness and not ignore the fact that he 19 spent time preparing to go in competition ; but that is a 20 matter to be decided in the final hearing as to when the

21 date should apply ; but , in fact, it d oes apply ; and I ' ll

22 issue a temporary i njunction against Mr . Parker. 23 With that said , i s ther e any other matt er 24 we need to take up at this time? 25 MR. CLEARY : Your Honor , we ask you stay

Filed

5/13/2015 3:49:03 PM Annie Rebecca Elliott District Clerk

Fort Bend County, Texas Jennifer Melendez