Cardinal Health Staffing Network v. Bowen

• Citation: 106 S.W.3d 230
• Decision Date: 03 April 2003
• Docket Number: No. 01-02-00769-CV.,01-02-00769-CV.
• Parties: CARDINAL HEALTH STAFFING NETWORK, INC., Appellant, v. Jay BOWEN, Appellee.
• Court: Court of Appeals of Texas

106 S.W.3d 230

CARDINAL HEALTH STAFFING NETWORK, INC., Appellant, v. Jay BOWEN, Appellee.

No. 01-02-00769-CV.

Court of Appeals of Texas, Houston (1st Dist.).

April 3, 2003.

COPYRIGHT MATERIAL OMITTED

Drew B. Tipton, Baker & Hostetler, LLP, Houston, for Appellant.

Shelly Ward Bennett, Tony P. Rosenstein, Amy Douthitt Maddux, Baker Botts, L.L.P., Houston, for Appellee.

Panel consists of Justices TAFT, KEYES, and ALCALA.

OPINION

TIM TAFT, Justice.

Appellant, Cardinal Health Staffing Network, Inc. ("Cardinal"), appeals from the denial of its application for a temporary injunction in its suit to enforce a non-competition covenant and for unfair competition and misappropriation of trade secrets, among other things. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(4) (Vernon Supp.2003). We determine (1) whether the trial court erred in implicitly finding that Cardinal would not suffer irreparable injury pending trial and, alternatively, (2) whether Cardinal had to show that it had an irreparable injury for which it had no adequate legal remedy. We affirm.

Background

Professional Health Care Resources, Inc. ("PHR") was in the interim-pharmacy-staffing business. PHR provided pharmacists and pharmacy technicians to hospital and retail pharmacies on a temporary basis. The PHR employees who filled vacancies for pharmacists and technicians at client pharmacies were called "schedulers." Appellee, Jay Bowen, started working with PHR as a temporary pharmacy technician, but he became a PHR scheduler on January 30, 2000.

On his first day of work as a scheduler, Bowen signed PHR's employment agreement, which contained non-disclosure and non-competition covenants. The non-competition covenant provided in pertinent part that if Bowen were to leave PHR, he would not, directly or indirectly, (1) call on, solicit, or take away any of PHR's clients or prospective clients on whom he had called or with whom he had became acquainted during his employment with PHR or (2) engage in, manage, operate, join, control, or own an interest in any business that was competing with PHR when he left PHR or that would come into "direct" competition with PHR during the year after he left. The covenant precluded the defined competition anywhere in Texas east of San Angelo for one year after Bowen left PHR, unless PHR and its affiliates had ceased doing business in a particular city or county or in the State.

On November 15, 2001, Cardinal purchased all of PHR's stock. Bowen did not wish to work for Cardinal. Some time that same month, Bowen began discussing employment opportunities with CompleteRx, a pharmacy-management company that Bowen had serviced while working at PHR. CompleteRx offered Bowen a job at the end of November 2001, and Bowen accepted it shortly thereafter. Bowen left Cardinal on January 24, 2002. About the time that Bowan began work at CompleteRx, that company started an interimpharmacy-staffing business. Bowen worked as a scheduler for CompleteRx.

The parties disputed whether the PHR non-competition covenant bound Bowen or was valid, whether Bowen was violating that covenant by working for CompleteRx as a scheduler, and whether Bowen was using any of Cardinal's confidential information at CompleteRx.¹

Cardinal sued Bowen on March 5, 2002, claiming breach of the non-competition and non-disclosure covenants, tortious interference with Cardinal's business relations with its employees, theft of trade secrets, breach of the duty of loyalty, fraud, and unfair competition and requested temporary and permanent injunctive relief and actual and punitive damages. Bowen counterclaimed for, among other things, a declaration that the non-competition covenant was void and for damages for malicious prosecution and abuse of process.

The trial court heard Cardinal's motion for temporary injunction on June 25, 2002. On July 3, 2002, the trial court denied Cardinal's temporary-injunction motion without stating reasons.

Cardinal's Challenges

In three issues, Cardinal argues that the trial court erred by not issuing a temporary injunction to enforce the non-competition covenant and to restrain Bowen either from working in the same field as Cardinal or from soliciting or doing business with customers and clients with whom Bowen had worked at Cardinal.

Standard of Review

We may not review the merits of the applicant's case in an interlocutory appeal from a temporary-injunction order. Tel. Equip. Network, Inc. v. TA/Westchase Place, Ltd., 80 S.W.3d 601, 607 (Tex.App.-Houston [1st Dist.] 2002, no pet.). Whether to grant or deny a temporary injunction lies within the trial court's sound discretion. See Surko Enters., Inc. v. Borg-Warner Acceptance Corp., 782 S.W.2d 223, 224 (Tex.App.-Houston [1st Dist.] 1989, no writ). "We view the evidence in the light most favorable to the trial court's order and indulge every reasonable inference in its favor." Amalgamated Acme Affiliates, Inc. v. Minton, 33 S.W.3d 387, 392 (Tex. App.-Austin 2000, no pet.); accord Tel. Equip. Network, 80 S.W.3d at 607.

Rules Pertaining to Temporary Injunctions Generally

Injunction proceedings are governed by Civil Practice and Remedies Code chapter 65. See TEX. CIV. PRAC. & REM.CODE ANN. §§ 65.001-65.045 (Vernon 1997 & Supp. 2003). Chapter 65 provides, in pertinent part, that "[t]he principles governing courts of equity govern injunction proceedings if not in conflict with this chapter or other law." Id. § 65.001. The chapter further provides that a writ of injunction may be granted if, among other grounds not applicable here, "the applicant is entitled to a writ of injunction under the principles of equity and the statutes of this state relating to injunctions."² Id. § 65.011(3). The Rules of Civil Procedure similarly provide, "The principles, practice and procedure governing courts of equity shall govern proceedings in injunctions when the same are not in conflict with these rules or the provisions of the statutes." TEX.R. CIV. P. 693. Therefore, the default rule, created by chapter 65 and the rules of civil procedure, is that the rules of equity control the granting of temporary-injunctive relief unless a particular statute provides otherwise.

"[T]he inadequacies of the remedy at law [are] both the foundation of and conversely a limitation on equity jurisdiction." Sisco v. Hereford, 694 S.W.2d 3, 7 (Tex.App.-San Antonio 1984, writ ref'd n.r.e.). Accordingly, when "an adequate and complete remedy at law is provided, our courts, though clothed with equitable jurisdiction, will not grant equitable relief." Rogers v. Daniel Oil & Royalty Co., 130 Tex. 386, 110 S.W.2d 891, 894 (1937). Equity thus requires a temporary-injunction applicant to plead and prove not only (1) a cause of action and (2) a probable right to the relief sought, but also (3) a probable, imminent, and irreparable injury in the interim. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex.2002). To establish an irreparable injury, the applicant must show that it cannot be "adequately compensated in damages or the damages cannot be measured by any certain pecuniary standard." Id. That is, the applicant has to establish that there is no adequate remedy at law for damages. See Surko Enters., 782 S.W.2d at 225. An adequate remedy at law is one that is as complete, practical, and efficient to the prompt administration of justice as is equitable relief. Id. The purpose of a temporary injunction is to preserve the status quo of the litigation's subject matter pending a trial on the merits. Butnaru, 84 S.W.3d at 204.

The Showing of Irreparable Injury

Cardinal argues that the trial court abused its discretion in denying injunctive relief because the evidence showed that Cardinal would necessarily suffer irreparable injury for which it had no adequate legal remedy pending trial. We disagree. Much of the evidence on which Cardinal relies is not viewed in the appropriate light,³ which requires us to view the evidence in the light most favorable to the ruling and to indulge all reasonable inferences in its favor. See Amalgamated Acme Affiliates, 33 S.W.3d at 392. Rather, when viewed in the required light, the evidence showed that Cardinal's sales doubled between the fourth quarter of 2001 and the first quarter of 2002. Cardinal was in fact using two to three more schedulers at the time of the hearing than it had during the month that Bowen left Cardinal. CompleteRx and Cardinal had in common only about 7% of Cardinal's 150 pharmacists (about eight or nine pharmacists) and only about 5.6% of Cardinal's pharmacy technicians. Bowen did not solicit these pharmacists or technicians on behalf of CompleteRx; rather, these individuals came to CompleteRx on their own. Additionally, it is common in the industry for more than one interim-pharmacy-staffing company to place a given pharmacist or technician. Finally, Cardinal's general manager did not know whether Cardinal had suffered any economic damages since Bowen had left.

Given the above evidence, we hold that the trial court did not abuse its discretion in implicitly finding that Cardinal would not suffer an irreparable injury for which it had no adequate legal remedy pending trial.

By post-submission letter, Cardinal claims that the trial court erred nonetheless because a prima facie presumption of probable injury arose from Cardinal's proof that Bowen, whom Cardinal alleges was a highly trained employee, was breaching the non-competition covenant. See Unitel Corp. v. Decker, 731 S.W.2d 636, 641 (Tex.App.-Houston [14th Dist.] 1987, no writ); Martin v. Linen Sys. for Hosps., Inc., 671 S.W.2d 706, 709 (Tex. App.-Houston [1st Dist.] 1984, no writ); Hartwell's Office World, Inc. v. Systex Corp., 598 S.W.2d 636, 639 (Tex.Civ.App.-Houston [14th Dist.] 1980, writ ref'd n.r.e.). Cardinal effectively argues that the trial court was bound by this presumption.

We disagree. When the cited courts speak of "prima facie proof," they mean a rebuttable presumption. See Decker, 731...