Renewdata Corporation v. Strickler, No. 03-05-00273-CV (TX 3/3/2006)
| Decision Date | 03 March 2006 |
| Docket Number | No. 03-05-00273-CV.,03-05-00273-CV. |
| Parties | RENEWDATA CORPORATION, Appellant SHAWN STRICKLER, Cross Appellant. v. SHAWN STRICKLER, Appellee RENEWDATA CORPORATION, Cross-Appellee. |
| Court | Texas Supreme Court |
Appeal from the District Court of Travis County, 126th Judicial District, No.GN400288, Honorable Stephen Yelenosky, Judge Presiding.
Affirmed.
Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
This appeal involves an employee's post-termination obligations to a former employer under a covenant not to compete and nondisclosure agreement. Appellant/cross-appellee RenewData Corporation sued its former employee, appellee/cross-appellant Shawn Strickler, after Strickler began working for one of Renew's competitors. Renew claimed that Strickler breached a Proprietary Information and Inventions Agreement, tortiously interfered with Renew's prospective business relationship with a potential customer, and failed to comply with his post-termination fiduciary duty to Renew. After a jury trial, the court entered judgment in favor of Renew. For the reasons discussed below, we affirm the district court's judgment.
Testimony at trial showed that Renew provides various electronic evidence services—including electronic evidence production, consulting, expert witness services, and forensic work such as finding missing e-mail—for entities that are involved in investigations or litigation requiring large-scale production of information. Renew's usual customers are corporations seeking to respond to governmental agencies' subpoenas and law firms involved in the discovery phase of litigation. These customers' typical problem is the inability to retrieve data stored on their computer servers' backup tapes because the computer equipment (hardware) or the programs that saved the data (software) have changed. The unique configuration of hardware and software is called the "native environment." Renew has the technology to extract archived data from the servers' backup tapes without the delay and expense of re-creating the native environment for the information. Renew's chief executive officer, Robert Gomes, testified that Renew, Kroll Ontrack, and eMag are "the only companies" that have their own technology to extract data without restoring the native environment.
Shawn Strickler began working for Renew as its director of corporate sales services on April 21, 2003. Strickler's job required him to attempt to sell Renew's services to entities with a specific need for Renew's services, or "opportunities." The opportunities were identified on an internal list created by Renew's telemarketers, called a "pipeline document." The pipeline document identified opportunities by name, date, dollar amount, and status of their interest or project. Renew also monitored its potential customers with a Web-based tool, accessible to authorized employees, called "SalesForce.com."
Six days before Strickler started his job, Renew's counsel sent a Proprietary Information and Inventions Agreement to Strickler by e-mail. The Agreement contained a covenant not to compete for one year, a nondisclosure agreement, and promises that, upon separation from employment with Renew, the employee will not solicit Renew's clients and will return Renew's company documents.
In his e-mail, Renew's counsel stated that he wanted to be sure Strickler had a chance to read the Agreement before signing it. Strickler responded by requesting the creation of a Renew e-mail account and asking that the Agreement be sent to his new e-mail address so that he could print and sign it the following week. Strickler's job offer was contingent upon signing the Agreement, and he signed it on April 21, 2003, initialing the bottom of each page. On his first day at Renew and after signing the Agreement, Strickler began his training on the process of the electronic evidence business, received the pipeline of prospective customers, and obtained a password to access SalesForce.com.
On November 14, 2003, Renew terminated Strickler, who was an at-will employee. Under the terms of Strickler's Agreement with Renew, the covenant not to compete would be effective until November 14, 2004.
Strickler sent an e-mail to Brendan Sullivan, the chief executive officer of eMag Solutions, Inc., a competitor of Renew's, on November 17, 2003, with a subject line stating "employment opportunity request from Shawn Strickler at Renew Data." Strickler wrote:
My name is Shawn Strickler and up until last Friday evening I was the Director of Corporate Sales at Renew Data. Several weeks back I was made aware of your recent meeting with Bob and Bonnie Gomes, CEO and Dir. of Partnerships at Renew Data, respectively, to discuss complementing (and learn competing) technologies. Based on their feedback from that meeting your name was the first that came to mind when determining employment opportunities to explore. I would appreciate the opportunity to discuss my qualifications with you and to determine if eMag could benefit from my knowledge and skills.
If there is a potential interest on your part I will be happy to discuss with you the reason for my departure, but given the potential relationship between your company and Renew Data I would prefer not to unnecessarily have the discussion.
I can be reached on my mobile phone at . . ., or at this e-mail address, and will gladly send over my resume upon request. I look forward to speaking with you soon.
Although Strickler had never met him, Sullivan replied by e-mail the same day, stating that he "was interested in a chat." On November 26, 2003, Strickler called his former supervisor, Gomes, to ask whether he "minded" if Strickler went to work for an unspecified partner of Renew's and whether Gomes might waive his Agreement. Gomes did not give a waiver to Strickler during their telephone conversation, nor did Gomes provide any written waiver to Strickler.
During pre-employment negotiations, Strickler told eMag that he believed he could bring in $1 million of business during his first year. The company's e-mail response informed Strickler that there was not any cap on his earning potential and emphasized that its goal was for Strickler "to bring in NEW business." On December 22, 2003, eMag sent an employment offer to Strickler which stated that Strickler would be required to sign eMag's confidentiality, noncompetition, and nondisclosure agreement, and that his employment would be predicated upon a "satisfactory completion of references." But Strickler did not execute an agreement with eMag, and eMag did not contact any of Strickler's references.
On December 29, 2003, Strickler wrote a letter to Gomes at Renew, stating that he had accepted a position with eMag and would begin work on January 2. Renew's counsel responded two days later and advised Strickler that his employment with eMag—Renew's "direct competition"—before November 14, 2004, would constitute a breach of Strickler's covenant not to compete.
Strickler began working for eMag on January 2, 2004, as director of forensic services. That day, his immediate supervisor, Quintin Gregor, urged him to seek his retained attorney's advice regarding his relationship with Renew and his job at eMag. Gregor also requested that Strickler briefly document his goals and "who the immediate easy money targets are."
During his second week at eMag, Strickler sent an e-mail to DTI, a client he had worked with while at Renew, informing them that he no longer worked for Renew and that he had "joined forces" with eMag. Strickler attached his new contact information, asked DTI to call him to assist with its "opportunities," advised that he was substituting temporarily for Gregor, and stated that he looked forward to working with DTI "once again." Fifteen days later, DTI sent an e-mail to Strickler seeking a price quote for recovery of data from a damaged laptop computer's hard drive. Although Strickler testified that he made this contact with DTI at eMag's request, Sullivan testified that it would be inappropriate for an employee like Strickler, who had worked previously at Renew, to contact someone who had done business with him at his former place of employment.
Also during his second week on the job, Strickler sent an e-mail to Maurice Leibenstern, counsel at Computer Associates, offering eMag's services concerning a pending investigation by governmental agencies. Although Computer Associates had a prior business relationship with eMag, Leibenstern's reply informed Strickler that Computer Associates had already contacted Renew "on this for a related matter, but did not proceed." While Leibenstern wanted to speak with Strickler, he wrote that Computer Associates would also contact Renew. Strickler's supervisors, Sullivan and Gregor, were copied on Strickler's January 13, 2004 e-mail to Leibenstern and Leibenstern's same-day response.
A bidding war for the Computer Associates project ensued. Strickler handled all communication concerning eMag's bids to Computer Associates. Discussing the "strategy for Computer Associates" in an e-mail to Sullivan and Gregor, Strickler stated that he had been "subtly pointing out things we can offer CA that Renew Data cannot." After receiving an e-mail from Leibenstern containing Renew's bid, Strickler told his bosses at eMag that Renew was "playing dirty." In response, Sullivan sent an e-mail to Strickler with an attached spreadsheet "to play around with in case [eMag] need[ed] to re-bid." Ultimately, Computer Associates recommended eMag to PriceWaterhouseCoopers and PriceWaterhouseCoopers selected eMag as the vendor for the Computer Associates project. Strickler received between $ 2,000 and $3,000 as his commission for the project. While at eMag, Strickler also closed a deal with FTI, which had been a customer of eMag's and Renew's.
Renew sued Strickler on January 30, 2004, and filed an ...
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