Universal Plant Servs., Inc. v. Dresser-Rand Grp., Inc.

571 S.W.3d 346
CourtCourt of Appeals of Texas
DecidedDecember 20, 2018
DocketNO. 01-17-00555-CV
StatusPublished
Cited by27 cases

This text of 571 S.W.3d 346 (Universal Plant Servs., Inc. v. Dresser-Rand Grp., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Universal Plant Servs., Inc. v. Dresser-Rand Grp., Inc., 571 S.W.3d 346 (Tex. Ct. App. 2018).

Opinions

Evelyn V. Keyes, Justice

Appellee, Dresser-Rand Group, Inc. (Dresser-Rand), filed suit against its former employees and their new employer, appellants Universal Plant Services, Inc., (Universal) and Ronald Fox, Jr., Adam Fuller, Ryan Hunt, and Timothy Riley (collectively, Former Employees), alleging causes of action for misappropriation of trade secrets, unlawful computer access, conversion, theft, and breach of contract. Universal and the Former Employees filed separate motions to dismiss pursuant to the Texas Citizens Participation Act (TCPA). Following a hearing, the trial court denied Universal's motion to dismiss, and the remaining motions of the Former Employees were overruled by operation of law.

In three appellate issues, Universal argues that: (1) the trial court erred in holding that the TCPA does not apply to Dresser-Rand's claims against it; (2) the trial court erred in denying Universal's motion because Dresser-Rand failed to establish by clear and specific evidence a prima facie case for each element of each claim against Universal; and (3) the trial court abused its discretion in imposing a spoliation presumption against Universal because Dresser-Rand failed to establish the essential elements of spoliation. The Former Employees likewise assert that (1) they met their burden under the TCPA to show that Dresser-Rand's legal action is based on, relates to, or is in response to the Former Employees' exercise of their statutorily-defined constitutional rights of free speech or association; (2) Dresser-Rand failed to establish a prima facie case for each essential element of each of its causes of action against the Former Employees; and (3) Dresser-Rand failed to show that its claims fall under the commercial speech exemption of the TCPA.

We affirm.

Background

Dresser-Rand is, according to its pleadings, "a leading supplier of custom-engineered rotating equipment solutions for the energy industry worldwide," and it provides services "for the energy industry, providing installation, maintenance, and repair for the above referenced rotating, fixing, and reciprocating equipment." Dresser-Rand alleged that it possesses valuable confidential and proprietary information, including "an enormous matrix of data relating to all past and current jobs *351performed by the company" that permits the company to identify prospective business opportunities, proprietary sales and marketing techniques, and "other confidential and proprietary data, including field service proposals and price markups for past and ongoing bids; contact lists; operations summaries; and annual and monthly business plans."

Before sales employees can access this valuable data, Dresser-Rand asks that they agree to strict confidentiality, among taking other precautions. The Former Employees here-Fox, Fuller, Hunt, and Riley-began working as salesmen for Dresser-Rand in 1990, 1998, 2002, and 2009, respectively. They each signed an "Employment Agreement Relating to Intellectual Property." In this Employment Agreement, the employees agreed, among other things, "During my employment and thereafter, I shall keep secret and confidential and not disclose to any unauthorized person, any secret or confidential information of the COMPANY that I obtain as a result of or during my employment." They also agreed, "I shall return to the COMPANY on the termination of my employment or on request by the COMPANY all documents and materials belonging to the COMPANY."

Dresser-Rand asserted in its pleadings that the Former Employees all resigned during the first two days of January 2017 and immediately began working for Universal, a direct competitor of Dresser-Rand. Each Former Employee participated in an exit interview and returned all physical property, such as laptops, flash drives, chargers, and company credit cards to Dresser-Rand.

Citing its concern over the Former Employees' resigning "with essentially no notice," Dresser-Rand retained Lance Sloves, a forensic computer analyst, to inspect the Former Employees' computers that had been returned to Dresser-Rand. Dresser-Rand believed, based on results of the forensic inspection, that the Former Employees had retained confidential and trade secret information. Dresser-Rand contacted both the Former Employees and Universal regarding its concerns. After several letters and other communications, negotiations among the parties broke down, and Dresser-Rand filed suit, alleging that "just prior to resigning, the Former Employees used at least eleven (11) portable USB devices (aka "thumb drives" or "external hard drives") and downloaded extensive confidential and proprietary information from Dresser-Rand's database." Dresser-Rand further alleged that the Former Employees "sent emails to personal email addresses that attached confidential and proprietary excel spreadsheets belonging to Dresser-Rand" just before they resigned. Dresser-Rand's petition specifically identified documents and information copied or emailed by each of the Former Employees. Dresser-Rand alleged that it "believes that the Former Employees have since attempted or are attempting to use this stolen information to compete on bids and other business on behalf of [Universal], the new employer."

Dresser-Rand specifically alleged that the "Former Employees misappropriated the information to obtain a competitive advantage as both [Universal] and Dresser-Rand are calling on the same clients to offer field service and repairs for rotating equipment." Dresser-Rand further alleged that "the Former Employees began meeting with Dresser-Rand's clients that they had previously served while at Dresser-Rand the same week they resigned from Dresser-Rand, and have continued to meet with Dresser-Rand clients weekly" and that they disclosed confidential information and "intentionally misled clients with false information." Dresser-Rand asserted that *352Universal "assisted" the Former Employees in misappropriating the trade secrets.

Dresser-Rand asserted a breach of contract claim for damages against the Former Employees for violating the terms of the Employment Agreement, and it also sought temporary and permanent injunctive relief. It alleged that the Former Employees misappropriated trade secrets, and Universal "knows or has reason to know that the trade secrets were acquired by improper means," and thus they violated Texas common law, the Texas Uniform Trade Secrets Act, and the federal Defend Trade Secrets Act. Dresser-Rand further asserted that "[b]y accessing and sending sensitive, confidential and proprietary information to a personal USB device or personal email address knowing that they were leaving Dresser-Rand and planning to compete against Dresser-Rand, the Former Employees knowingly and with intent to defraud" accessed Dresser-Rand's confidential information without authorization, in violation of the federal Computer Fraud and Abuse Act. Finally, Dresser-Rand alleged that both the Former Employees and Universal had engaged in conversion of the confidential information and had violated the Texas Theft Liability Act.

The parties entered into an agreed permanent injunction, agreeing that neither the Former Employees nor Universal would access or disclose any documents or other information obtained from Dresser-Rand and that they would not destroy, conceal, or dispose of any documents, items, or data compilations stored electronically and belonging to Dresser-Rand.

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Bluebook (online)
571 S.W.3d 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-plant-servs-inc-v-dresser-rand-grp-inc-texapp-2018.