United States District Court, W.D. Texas, Austin Division
PITMAN UNITED STATES DISTRICT JUDGE
the Court is Plaintiff American Mortgage & Equity
Consultants, Inc.'s (“AMEC”) motion for entry
of a temporary restraining order and preliminary injunction,
(Dkt. 8), and responsive briefing from Defendants Arien
Bowersock (“Bowersock”) and The Home Loan Expert
(collectively, “Defendants”), (Dkt. 13). On May
16, 2019, the parties participated in a hearing on AMEC's
motion. The hearing was continued on May 23, 2019. After
considering the motion, the supporting evidence, and the
relevant law, the Court finds that the motion should be
a full service mortgage lender incorporated in Minnesota,
where it also has its headquarters and principal place of
business. (Compl., Dkt. 1, at ¶ 1). Bowersock is a Texas
resident who was employed by AMEC as a Loan Officer in its
Austin office. (Id. ¶ 2). Bowersock serviced
AMEC customers throughout the Austin area. (Id.).
The Home Loan Expert is another full service mortgage lender,
incorporated in Missouri and with its headquarters and
principle place of business there. (Id. ¶ 3).
Bowersock now works for The Home Loan Expert out of its
Austin office. (Id. ¶ 2).
alleges that on the morning of March 8, 2019, Bowersock
suddenly resigned. (Id. ¶ 11). When her
coworkers began to arrive at the office that morning, they
found that the locks on the doors had been changed. According
to AMEC, Bowersock had hired a locksmith to change the locks
while she “hijacked” the office. (Id.).
With her coworkers locked out, Bowersock “downloaded
and took her AMEC Outlook email database and customer and
vendor contact information, and other stored customer
information” including dozens of hard copy files.
(Id.). AMEC further alleges that for weeks prior to
her resignation, Bowersock had been transitioning business
over to The Home Loan Expert. She had allegedly (1) told her
assistant that she was already transferring AMEC customer
loan information to The Home Loan Expert; (2) used her AMEC
email and computer to conduct business for The Home Loan
Expert; (3) consulted with an IT expert about how to take
information from AMEC's computer databases undetected;
(4) forwarded information about AMEC customers and their
loans from her AMEC email address to her personal email
address; (5) set up a Dropbox in violation of AMEC policy to
store information about the AMEC customers with whom she
worked; (6) marked files in the Dropbox as “HLE”
for The Home Loan Expert and provided The Home Loan Expert
with access to those files; and (7) intentionally delayed
completing pending loans so that she could close them for The
Home Loan Expert. (Id.). Bowersock also allegedly
solicited an AMEC support staff member to leave AMEC to work
for Defendants. (Id. ¶ 13; Schneider Decl.,
Dkt. 8-1, ¶ 7). According to AMEC, the information taken
by Bowersock is all that was needed for The Home Loan Expert
to “set up shop” in Austin and start competing
with AMEC. (Id. ¶ 12).
basis of these allegations, AMEC asserts causes of action
against Defendants for (1) breach of contract; (2)
misappropriation of trade secrets under the Defend Trade
Secrets Act, 18 U.S.C. § 1836 et seq.
(“DTSA”); (3) violation of the Computer Fraud and
Abuse Act, 18 U.S.C. § 1030 (“CFAA”); (4)
breach of fiduciary duty; (5) tortious interference with a
contact; (6) misappropriation of trade secrets under the
Texas Uniform Trade Secrets Act, Tex. Civ. Prac. & Rem.
Code §§ 134A.001 et seq.
(“TUTSA”); (7) civil conspiracy; (8) unjust
enrichment; and (9) conversion. (Id. at 10-18).
after filing its complaint, AMEC filed the instant motion for
a temporary restraining order
(“TRO”). (Mot., Dkt. 3, at 2-4). AMEC bases its
request for a TRO on its breach of contract, misappropriation
of trade secrets, and tortious interference claims. (Mot.,
Dkt. 8, at 2-7).
party moving for a TRO must establish that: “(1) there
is a substantial likelihood that the movant will prevail on
the merits; (2) there is a substantial threat that
irreparable harm will result if the injunction is not
granted; (3) the threatened injury outweighs the threatened
harm to the defendant; and (4) the granting of the [TRO] will
not disserve the public interest.” Clark v.
Prichard, 812 F.2d 991, 993 (5th Cir. 1987). “A
[TRO] is an extraordinary remedy and should only be granted
if the plaintiffs have clearly carried the burden of
persuasion on all four requirements.” Nichols v.
Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008)
(citation and quotation marks). Upon reviewing AMEC's
motion, the Court concludes that AMEC has failed to
demonstrate (1) a substantial likelihood that it will prevail
on the merits of its breach of contract claims or (2) that
irreparable harm will likely result if an injunction is not
granted on the basis of its trade secret claims. AMEC's
tortious interference claims are preempted by the TUTSA, or
alternatively, waived and abandoned. Accordingly, AMEC has
failed to show that it is entitled to the extraordinary
relief of a temporary restraining order with respect to any
of the claims on which it bases its request for such relief.
Breach of Contract
condition of her employment with AMEC, Bowersock signed a
Loan Officer Employment Agreement (the
“Agreement”). (Compl., Dkt. 1, ¶ 5).
Relevant here, the Agreement includes restrictive covenants
preventing Bowersock from competing with AMEC for a 12-month
period over “certain customers and loans about which
she had confidential information and/or for which she was
responsible at AMEC, and from using or disclosing its
confidential and proprietary information.” (Mot., Dkt.
8, ¶ 6; Compl., Dkt. 1, ¶¶ 5-7). The parties
dispute whether the Agreement is enforceable. AMEC argues
that the above limitations make the Agreement reasonable.
Defendants argue that the Agreement is not reasonable because
it (1) lacks a geographical limitation, (2) applies to
customers with whom Bowersock never had any contact while at
AMEC, and (3) contains an unreasonable non-solicitation
provision. (Resp., Dkt. 13, at 4-9).
Texas, “[e]very contract . . . in restraint of trade or
commerce is unlawful.” Tex. Bus. & Com. Code §
15.05(a). “An agreement not to compete is in restraint
of trade and therefore unenforceable . . . unless it is
reasonable.” DeSantis v. Wackenhut Corp., 793
S.W.2d 670, 681 (Tex. 1990). “By statute, covenants not
to compete are reasonable-and therefore enforceable-only to
the extent that they contain ‘limitations as to time,
geographical area, and scope of activity to be restrained
that are reasonable and do not impose a greater restraint
than is necessary to protect the goodwill or other business
interest of the promisee.'” TFC Partners, Inc.
v. Stratton Amenities, LLC, No. 1:19-CV-58-RP, 2019 WL
369152, at *5 (W.D. Tex. Jan. 30, 2019) (quoting Tex. Bus.
& Com. Code § 15.50(a)). The court may
“dispense[ ] with one or more” of these
limitations “when the totality of circumstances
indicate[ ] that the covenant not to compete [is] reasonably
narrow to protect a company's business interest or
goodwill.” M-I LLC v. Stelly, 733 F.Supp.2d
759, 799 (S.D. Tex. 2010).
lack of several limitations is relevant here. First,
“[g]enerally, a reasonable area for purposes of a
covenant not to compete is considered to be the territory in
which the employee worked while in the employment of his
employer.” Butler v. Arrow Mirror & Glass,
Inc., 51 S.W.3d 787, 793 (Tex. App.-Houston [1st Dist.]
2001, no pet.). Because the Agreement contains no limitation
as to geographic scope, Defendants argue that it purports to
prevent Bowersock from working for any AMEC competitor
anywhere in the country, even if ...