First, i hope everyone is doing as well as can be expected in this turbulent time.
Second, take care of yourselves and your family/friends/community.
Third, my apologies for the hiatus. I’ve probably read over 50 Anti-Slapp opinions since the last post on January 4. I have some items in the hopper that are unique and will carry over until we get the first Post Sept. 2019 case. I don’t know if we will ever see a Texas Supreme Court case resolving the conflict amongst the COAs as to the breadth and application of the Right of Association.
Which brings me to today’s blog. Two ROA cases – two different decisions out of the Houston COAs’. 1st and 14th Districts.
In William Reeves v. Harbor America Central, Inc., No. 14-18-00594-CV(Houston COA [14th Dist.] April 28, 2020), on a 2-1 decision with a dissent, the 14th District reversed the denial of a Texas Anti-Slapp.* The underlying counterclaims subject to the Texas Anti-Slapp were breach of an employment agreement containing non-compete, non-solicitation, and confidentiality provisions, misappropriation of trade secrets, conversion, and breach of fiduciary duty.
This is what Texas law blogger Zach Wolfe, and longtime nemesis of www.antislapptexas.com, would call a garden variety non-compete case.** To wit, Company hires Employee and everything is great until it isn’t. Employee decides to start a competing business, maybe takes another employee with him/her, along with a few clients, a rolodex, and possibly the secret sauce that makes the company succeed. Employer sues Employee, or Employee sues first and Employer counterclaims.
In a risky gambit the non-movant (employer) only argued the TCPA does not apply to ROA cases such as a former employee leaving to start a competing business and associating with others to do so (what longtime readers know is Step 1). Relying on its prior holdings in Abatecola v. 2 Savages Concrete Plumbing, LLC, No. 14-17-00678-CV, (Houston [14th Dist.] 2018) and Austin ROA stalwarts such as Elite Auto Body and Craig v. Tejas Promotions, the 14th District determined that the garden variety non-compete case is covered by ROA.
The 14th District also rejected nonmovant’s arguments that the TCPA conflicts with Texas Uniform Trade Secrets Act and Covenant Not to Compete Act. These particular issues are not likely to get resolution from the Texas Supreme Court because the New TCPA has specific exemptions that should prevent such issues from arising.
The real kicker at the end of this decision is that the 14th District sent it back to the trial court for a determination as to whether the non-movant met Step 2, because the trial court’s order denying the Texas Anti-Slapp specifically said it did not reach Step 2. Undoubtedly, Reeves will have a third opinion sometime in 2021.***
Next up, National Signs, Inc. v. John Graff, No. 01-18-00662-CV (Houston COA [1st Dist.] Apr. 28, 2020), is the other side of the same coin. Again, a garden variety non-compete case, but the trial granted the employee’s Texas Anti-Slapp. The 1st District reversed the grant and remanded back to the trial court. Relying on the recent en banc opinion in Gaskamp v. WSP USA, Inc., No. 01-18-00079-CV (Houston COA [1st Dist.]), the 1st District rejected Elite Autobody and declined to adopt a reading of the Old TCPA that covers what appear as narrow business disputes.
The takeaway is that the viability of a ROA claim as against standard business disputes is going to turn on what COA a litigant could end up in. Unless or until the Texas Supreme Court provides some guidance on this issue, the COAs will continue to issue conflicting opinions.
*This is the second appeal TCPA appeal involving these litigants. Reeves v. Harbor Am. Cent., Inc., 552 S.W.3d 389, 392 (Tex. App.—Houston [14th Dist.] 2018, no pet.) (trial court refused to consider the merits of the TCPA motion)
**When Zach isn’t busy working out, his excellent legal insight is available at https://fiveminutelaw.com/author/zachwolfe99/
***You can read the dissent here, which primarily relies on Kawcak.