Hallmark Personnel of Texas, Inc. v. Franks

• Decision Date: 23 February 1978
• Docket Number: No. 17050,17050
• Citation: 562 S.W.2d 933
• Parties: HALLMARK PERSONNEL OF TEXAS, INC., Appellant, v. Robert FRANKS, dba Robert Franks & Associates, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 933

562 S.W.2d 933

HALLMARK PERSONNEL OF TEXAS, INC., Appellant, v. Robert FRANKS, dba Robert Franks & Associates, Appellee.

No. 17050.

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

Feb. 23, 1978.

Richie, Greenberg & Brackman, David D. Peden, Jr., Houston, for appellant.

Roger H. Broach, The Woodlands, for appellee.

EVANS, Justice.

This is an appeal from the trial court's order denying the plaintiff's application for temporary injunction.

Hallmark Personnel of Texas, Inc., an employment agency, brought this action against Robert Franks, dba Robert Franks & Associates, to enforce a contractual covenant not to compete and to restrain misappropriation of trade secrets. At the conclusion of Hallmark's case, the trial court granted Franks' motion to deny the application for temporary injunction.

The employment contract between Hallmark and Franks dated February 25, 1975, forbids Franks from competing with Hallmark in the employment agency business for a period of six months following the termination of his employment. Franks terminated his employment in May, 1977, and in June, 1977, he commenced his own business. Thus, the six month period provided by the contract expired during the pendency of this appeal.

The existence of an actual controversy is essential to the exercise of appellate jurisdiction. If prior to the determination of the appeal the controversy is terminated, the appeal becomes moot. In re Ivey, 534 S.W.2d 163 (Tex.Civ.App. Austin 1976, writ ref'd n. r. e.). Thus Hallmark's points of error dealing with this aspect of the appeal need not be considered. Since there are other issues in the appeal which have not become moot, the appeal will not be dismissed. Weatherford Oil Tool Company v. Campbell, 161 Tex. 310, 340 S.W.2d 950, 953 (1960).

It is Hallmark's position with respect to the trade secrets issues of the appeal that the uncontroverted evidence shows that Franks breached his contractual and common law duties to preserve Hallmark's confidential disclosures of customer and business information.

The contract of employment provides that all records, material and information obtained by the employee in the course of the employment are confidential and that the employee will not at any time after the termination of his employment use the contents of such records or the information so acquired. Hallmark contends that it is entitled to common law protection of its confidential disclosures of business information consisting of "customer lists, training techniques and an analysis technique known as 'features, benefits and needs'."

Franks testified that upon termination of his employment, he took no applicant lists nor employer contract cards, and that the only record which he took with him was one which he had prepared for his personal use in preparation for a possible Certified Employment Consultant examination. This record, he testified, contained information on the types of placement he had made with Hallmark, where he had placed the applicants, the amount of the fee involved, and by whom it was paid. This record does not contain the names of persons to contact at the particular companies where placements were made. Although Franks testified that he was presently contacting employers for whom he had made placements while at Hallmark, there was no evidence that these customers had been the exclusive customers of Hallmark.

Mr. Leonard Buxkemper, the president of Hallmark, testified that both employees and applicants may be listed with a number of employment agencies at a given time. He testified that he had developed an analysis technique known as "features, benefits and needs", which was based upon his years of experience in the employment counseling business. He testified that he had personally taught this technique to Franks, that he had disclosed the information in confidence, and that he had not reduced to writing the information concerning such technique. He testified that he had "expounded" on the theory of his technique at national committee meetings, but had not disclosed "the finer details on it". It was...