Ramirez v. Ignite Holdings, Ltd.
Dallas Court of Appeals, No. 05-12-01024-CV (August 26, 2013)
Justices O’Neill, FitzGerald (Opinion), and Lang-Miers
Dallas Court of Appeals, No. 05-12-01024-CV (August 26, 2013)
Justices O’Neill, FitzGerald (Opinion), and Lang-Miers
In a case involving alleged violations of covenants not to compete and misappropriation of trade secrets, the Court of Appeals reversed two provisions in a temporary injunction that prohibited the defendants from possessing or using the plaintiff’s “Proprietary Information/Trade Secrets” and from destroying relevant documents. The court concluded the provisions required the defendants to infer what conduct was forbidden and were insufficiently specific. It declined to reform the injunction and instead reversed and remanded for further proceedings.
The defendants, former independent sales associates of plaintiff Ignite Holdings, had
contracts with Ignite that contained various non-competition covenants. When
the defendants allegedly started working for a competitor and violating these
covenants, Ignite sued them on several theories of liability, including breach
of contract and misappropriation of trade secrets. The trial court issued a
temporary restraining order, and later a temporary injunction.
The temporary injunction contained seven paragraphs describing the enjoined activities, five of which had expired by the time the Court of Appeals issued its opinion. The two paragraphs that remained in effect prohibited the defendants from: (1) “possessing, disclosing to any third party, or using for their own benefit or to the detriment of Ignite . . . any of [its] Proprietary Information/Trade Secrets (including but not limited to proprietary information, confidential information, training materials, templates, or sales or customer lists)”; and (2) “destroying, discarding, altering, or deleting any documents, emails, or text messages relating in any way to this lawsuit or the subject matter of this Order.” The order defined “Proprietary Information/Trade Secrets” to include “valuable business, training, and sales techniques, methods, forms, materials, guides, lists, downline associate and customer lists, including personal identifying information, and other confidential and proprietary information discussed above.”
The Court of Appeals noted that, while some of the words used to define the central concept of “Proprietary Information/Trade Secrets” were fairly specific—“downline associate and customer lists” and “organizational reports,” for example—others were broad and general—like “confidential information,” “proprietary information,” “techniques,” “materials.” The court concluded that, taking the order as a whole, it did not define “Proprietary Information/Trade Secrets” with enough specificity to give the defendants adequate notice of the acts they were restrained from doing. Rather, the defendants would have to infer whether any particular information in their possession was subject to the injunction, making the injunction impermissibly vague under Texas Rule of Civil Procedure 683. The court similarly concluded that the paragraph enjoining destruction of relevant documents “relating in any way to . . . the subject matter of this Order” was impermissibly vague, as it incorporated the nonspecific concepts used in the other paragraph.
In deciding the relief to be granted, the Court of Appeals drew a distinction between an injunction that is overbroad and one that is insufficiently specific. The court noted that, in a previous case, it had modified and narrowed an injunctive provision that was overbroad, but had reversed and remanded a provision that was too vague. It followed that approach in this case and reversed the two remaining paragraphs of the injunction and remanded for further proceedings.
