Zep Manufacturing Co. v. Harthcock

824 S.W.2d 654, 1992 WL 13958
CourtCourt of Appeals of Texas
DecidedJanuary 16, 1992
Docket05-90-01554-CV
StatusPublished
Cited by145 cases

This text of 824 S.W.2d 654 (Zep Manufacturing Co. v. Harthcock) 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
Zep Manufacturing Co. v. Harthcock, 824 S.W.2d 654, 1992 WL 13958 (Tex. Ct. App. 1992).

Opinion

OPINION

STEWART, Justice.

Zep Manufacturing Company appeals from a summary judgment in favor of Gregory B. Harthcock and Panther Industries, Inc. 1 on Zep’s claims against Harth-cock for breach of an employment contract and against Panther for tortious interference with contract. In seventeen points of error, Zep complains that the trial court erred in granting summary judgment. We affirm in part, reverse and render in part, and reverse and remand in part.

FACTUAL BACKGROUND

Zep and Panther compete in the manufacture and sale of industrial chemicals. Each company develops its own chemical formulas, which distinguish it in the chemical industry. These formulas generally are not patented because patents are expensive and require the disclosure of the company’s formula. Zep seeks to protect its chemical formulas and other proprietary information by having its employees sign an employment agreement.

*657 In April 1987, Zep hired Harthcock as a chemist. His duties included quality control of plant production and analyses of competitive products. Harthcock signed an employment agreement which contained, among other things, the noncompete and nondisclosure covenants at issue here. Zep trained Harthcock as an industrial chemist 2 and gave him access to Zep's chemical formulas.

In May 1989, Daniel Stultz, chairman of the executive committee at Panther, contacted Harthcock concerning an employment opportunity at Panther. When Harthcock told Stultz about his employment agreement with Zep, Stultz said that Panther would handle any legal matters that arose from Harthcock’s employment with Panther. On May 26,1989, Harthcock resigned from Zep. He subsequently began to work as a chemist for Panther.

On August 15 and October 18, 1989, Zep sent Harthcock and Panther notice that it believed that Harthcock’s employment violated the employment agreement and that it intended to enforce the employment agreement. Harthcock continued to work for Panther.

In December 1989, Zep filed this lawsuit against appellees, alleging Harthcock’s breach of the noncompete, nondisclosure, and nonsolicitation covenants 3 contained in the employment agreement; Panther’s tor-tious interference with contractual relations; and unfair competition. On December 13, 1989, the trial court granted Zep’s request for a temporary restraining order. On December 22, 1989, the trial court entered an agreed temporary injunction restraining Harthcock from, among other things, knowingly or intentionally disclosing any of Zep’s trade secrets or confidential information.

On July 27, 1990, appellees filed their motion for summary judgment, alleging the following grounds:

1.The noncompete covenant is unenforceable as a matter of law as not being ancillary to an otherwise enforceable agreement.
2. The noncompete covenant is an unreasonable restraint on trade and unenforceable on the grounds of public policy.
3. The nondisclosure covenant is unenforceable as a matter of law because it is part of and operates in conjunction with an otherwise unenforceable noncompete covenant and/or contains an unreasonable period of time and has no geographical limits to its enforceability.
4. Zep cannot base its action for damages for tortious interference against Panther on Harthcock’s unenforceable noncompete covenant and nondisclosure agreement.

On November 2, 1990, the trial court rendered judgment granting appellees’ motion for summary judgment on all of Zep’s claims.

STANDARD OF REVIEW

In reviewing a summary judgment record, this Court applies the following standards:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.
3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). For the defendant as movant to prevail on a summary judgment, it must either (1) disprove at least one element of the plaintiff’s theory of recovery or (2) plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff’s cause of action. Traylor v. Unitedbank Orange, 675 S.W.2d 802, 804 (Tex.App.—Beaumont 1984, writ ref’d n.r.e.). A *658 matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982). The question on appeal is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the cause of action. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970). When, as here, the trial court’s judgment does not specify the grounds relied upon for its ruling, summary judgment will be affirmed if any of the grounds advanced in support of summary judgment is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989).

ENFORCEABILITY OF THE NONCOMPETE COVENANT

Panther alleged as grounds for summary judgment that the noncompete covenant was unenforceable because it is not ancillary to an otherwise enforceable agreement and because it is an unreasonable restraint on trade and, thus, unenforceable on grounds of public policy.

Courts generally disfavor noncom-pete covenants because of the public policy against restraints of trade and the hardships resulting from interference with a person’s means of livelihood. Martin v. Linen Sys. for Hosps., Inc., 671 S.W.2d 706, 709 (Tex.App.—Houston [1st Dist.] 1984, no writ). Section 15.50 of the Texas Business and Commerce Code provides that a noncompete covenant is enforceable if it:

(1) is ancillary to an otherwise enforceable agreement but, if the covenant not to compete is executed on a date other than the date on which the underlying agreement is executed, such covenant must be supported by independent valuable consideration; and

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Bluebook (online)
824 S.W.2d 654, 1992 WL 13958, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zep-manufacturing-co-v-harthcock-texapp-1992.