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Cochrum v. National Bugmobiles, Inc.

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

January 11, 2018

MICHAEL COCHRUM, Appellant,
v.
NATIONAL BUGMOBILES, INC., Appellee.

         On appeal from the 24th District Court of Victoria County, Texas.

          Before Chief Justice Valdez and Justices Longoria and Hinojosa Memorandum Opinion by Justice Hinojosa

          MEMORANDUM OPINION

          LETICIA HINOJOSA JUSTICE.

         In the trial court, appellee National Bugmobiles, Inc., a pest control company, sued appellant Michael Cochrum, a pest control technician, for breach of contract shortly after Cochrum resigned from Bugmobiles and immediately joined Stout Pest Control, another pest control company. Bugmobiles obtained a temporary injunction that Cochrum, by two issues, asks us to modify. First, Cochrum argues that the temporary injunction is void under Texas Rule of Civil Procedure 683 because it fails to define in reasonable detail and without reference to the pleadings and documents the acts to be restrained. Second, in what we classify as four sub-issues, Cochrum argues that the evidence is legally and factually insufficient to support: (a) the geographic restrictions; (b) the customer restrictions; (c) the trial court's finding that Bugmobiles would suffer a probable, imminent, and irreparable injury in the interim; and (d) the amount of the bond. We modify the temporary injunction and affirm it as modified.

         I. Background[1]

At the hearing on Bugmobiles's application for a temporary injunction, the trial court heard from James Kiening, the president of Bugmobiles, and Cochrum. Cochrum, who lacks a college degree, started working at Bugmobiles after working for several years selling life insurance at first, then Yamahas, and ultimately Fords. The record does not specify whether Bugmobiles apprised Cochrum of the provisions in the employment agreement before he accepted its job offer. Nevertheless, Cochrum signed an employment agreement on March 22, 2004, before starting as an apprentice technician at Bugmobiles. The employment agreement contains, among other things, non-solicitation and non-competition provisions that provide:

10. Diversion of Business. The Employee shall not, during the period of employment by the Employer and following termination of employment (whether such termination be with or without cause) either for the Employee or on behalf of any person, firm, corporation, or any other operation or entity, directly or indirectly:
10.1 Divert or attempt to divert from the Employer any business whatsoever by influencing or attempting to influence, or soliciting or attempting to solicit any of the customers of the Employer with whom Employee may have dealt at any time or who were customers of the Employer on the date of termination of the Employee's employment or had been customers of the Employer thereto; or
10.2 Divert or attempt to divert from the Employer any person employed by the Employer by influencing or attempting to influence such person to leave Employer's employ.

         11. Non-Compete Clause. For a period of two (2) years from the termination of employment, the Employee shall not, either for the Employee or on behalf of any other person, firm, corporation, or any other operation or entity, directly or indirectly own, control, or participate in the ownership or control of, or be employed by on [sic] behalf of, any business which is similar to and is competitive with the business of the Employer within a seventy-five (75) mile radius of Employer's locations in, but not limited to, Bay City, Cuero, Edna, El Campo, Goliad, Karnes City, La Grange, Luling, Palacios, Port Lavaca, Rockport, Runge, Schulenburg, and Victoria-all locations in TEXAS.

         The employment agreement, Cochrum's resignation letter, one of Cochrum's paystubs from Bugmobiles, a list of Bugmobiles's customers that Cochrum serviced, and an employee handbook were admitted into evidence by the trial court during the hearing on Bugmobiles's application for a temporary injunction. Kiening testified as to Bugmobiles's employment agreement, business model, service area, training, and investments in marketing and dissemination or protection of customer lists. Cochrum discussed some of the same topics and his resignation and endeavors at Stout Pest Control.

         A. Employment Agreement

         Kiening explained that Bugmobiles employs approximately twenty-five technicians, and it requires that all employees, including non-technicians, sign an employment agreement that contains non-solicitation and non-disclosure provisions similar to the one Cochrum signed. Such employment agreements are, according to Kiening, common in the pest control industry.

         B. Business Model

         Kiening characterized Bugmobiles's business model as "unique" in that it encourages employees to develop relationships with customers. Kiening posited that other pest control companies purposefully rotate technicians to avoid the development of such relationships. Cochrum echoed an emphasis on customer relationships. During Cochrum's approximately thirteen years at Bugmobiles, he helped customers by burying dogs, "fixing beds, " answering their late-night phone calls, and giving one customer a TV.

         C. Service Area

         Bugmobiles's service area extends around Austin, San Antonio, Corpus Christi, and Houston. Cochrum's service area for the approximately 300 Bugmobiles customers consisted of Calhoun, Jackson, and Matagorda counties. According to Kiening, any Bugmobiles technician may service any customer throughout Bugmobiles's territory. In accordance with this policy, Kiening recalled that Cochrum once provided service to a customer as far away as Schulenburg.

         D. Training

         Kiening insisted that Bugmobiles's technicians received specialized training that consisted of two parts: formal education and access to experienced technicians. Each technician receives eight hours of continuing education, the state minimum, and, in Keining's words, "a lot more than that." Kiening highlighted Bugmobiles's experienced technicians, noting that Bugmobiles's technicians may call him or one of their supervisors and say, "I have a so-and-so. Can we do it?" In response, Keining or one of Bugmobiles's "experienced technicians" would generally answer, "Yes, we can. We'll get down there and take care of it. We will show you how to do it."

         Cochrum characterized Bugmobiles's training as "basic" rather than "specialized" because it primarily consisted of merely shadowing a different technician every day. Cochrum noted that "it could be different from one tech-from one technician to another, because one may do something his way. One may do it this way. One may use this. The other may use this." Cochrum commented that the continuing education programs were presented by one of the four pesticide manufacturers that supplied Bugmobiles with the pesticides that its technicians used. These pesticides are, in Cochrum's estimation, similar to but more potent than those available at retailers such as Home Depot or Lowe's.

         E. Business Investments

         Kiening estimated that Bugmobiles has approximately 20, 000 customers, and he believes that it obtained these customers through marketing efforts that include social media advertising and gifts to charities. Over the past 13 years, Bugmobiles has spent $1.8 million in advertising, spending $150, 000 in 2016 alone. Kiening recalled that in the last eight or nine years, none of Bugmobiles's employees have had access to its entire customer lists. However, before this period, employees may have accessed printouts listing all of Bugmobiles's customers.

         F. Cochrum's Experience with Bugmobiles

          A year after beginning as an apprentice, Cochrum earned a commercial and private pesticide application license from the Texas Department of Agriculture. Cochrum acknowledged that all of his training, experience, client contact, and information regarding pest control came during his employment with Bugmobiles. He also acknowledged that at Bugmobiles he relied on its advertising because his wages were based on a service commission. Cochrum could supplement his wages with a 10 percent "bonus" for generating new sales. As for compensation, the employment agreement provides:

5. Compensation. As compensation for services rendered hereunder, Employer agrees to pay the following:

Route Commission

Monthly Volume

Commission %

$0 - $6, 000

25%

$6001 - $7000

27.5%

$7001-$10, 000

30%

$10, 001

32.5%

         Example: Monthly Volume of $12, 000 and Sales of $3, 000.

Monthly Volume

Commission

% Gross Pay

$0 - $6, 000

25%

$1, 500

$6001 - $7000

27.5%

$275

$7001-$10, 000

30%

$900

$10, 001

32.5%

$625

$3325

Sales Total

Sales %

$3, 000

10%

$300

Gross Pay

$3, 625

         Cochrum's January 2016 paystub showed a total gross commission of $3, 611.38 and a net monthly income of $2, 155.57, after deductions for taxes, medical and disability insurance, and retirement.

         Depending on the day, Cochrum may have worked in different areas. Cochrum acknowledged that Bugmobiles was free to assign and reassign customers to different technicians. He, however, denied that he had access to the list of all of Bugmobiles's customers.

         G. Cochrum's Resignation

         Cochrum began thinking about leaving Bugmobiles about a year before his resignation. He had first met Mr. Stout[2] around 2004, and the two kept in touch. In their conversations, Stout mentioned to Cochrum, "[w]henever we get ready to retire, it would be great if we worked together." Cochrum's goal in joining Stout Pest Control was that the endeavor would allow him to take "a week off here or there" while Stout covered for him and vice-versa.

         Before Cochrum joined Stout Pest Control, Stout asked him about any potential non-competition agreement. Cochrum could not recall signing a non-competition agreement and none appears in the employee handbook given to Cochrum when he began working for Bugmobiles. Stout's inquiry prompted Cochrum to ask Ricardo Salinas, another Bugmobiles technician, whether he had signed a non-competition agreement.

         On Friday, February 10, 2017, Cochrum informed the first Bugmobiles customer that he was leaving Bugmobiles and joining Stout Pest Control. Cochrum "felt [he] owed it to her, being [that] she was a good friend." On Monday, February 13, 2017, Cochrum, as Kiening recalled, told him, "Here's my keys. Here's my card. Here's my telephone. I quit. I'm going to retire, and I'm going to do things like I want-things that I want to do that I haven't been able to do while I worked." Cochrum's handwritten February 13, 2017 resignation letter provides, "I, Michael Cochrum do hereby resign my employment with Bugmobiles effectively [sic] this date. I feel it is time in my life to do things I want to do personally. I thank you for the opportunity to work at Bugmobiles." Cochrum began working at Stout Pest Control on the same date.

         Upon leaving Bugmobiles, Cochrum used customer phone numbers and addresses stored on his personal cell phone, which he used for work, to contact former customers. Cochrum claimed that he would not have contacted such customers if he had known about the employment agreement. Since leaving Bugmobiles, Cochrum has provided pest control service to 47 former customers through Stout Pest Control. In the six weeks between ...


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