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Rose v. Scientific Machine & Welding, Inc.

Court of Appeals of Texas, Third District, Austin

June 25, 2019

Kevin Rose, Appellant
v.
Scientific Machine & Welding, Inc., Appellee

          FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-18-005034, THE HONORABLE JAMES LEE CARROLL, JUDGE PRESIDING

          Before Justices Goodwin, Baker, and Triana

          MEMORANDUM OPINION

          THOMAS J. BAKER, JUSTICE

         Scientific Machine & Welding, Inc. (Scientific) sued its former employee, Kevin Rose, for breach of contract and trade-secret misappropriation after he left its employ and began working for one of its customers. Rose moved to dismiss the action under the Texas Citizens Participation Act (TCPA). See generally Tex. Civ. Prac. & Rem. Code §§ 27.001-.011. The trial court denied the motion. On appeal, Rose argues that the trial court erred in denying his motion because Scientific's lawsuit relates to his exercise of the rights of free speech and association, and Scientific has proved neither exemption of its lawsuit from the TCPA under the Act's "commercial speech" exemption nor a prima facie case for its claims. See id. §§ 27.005(b), (c), .010(b). For the following reasons, we affirm the trial court's denial of Rose's TCPA motion.

         BACKGROUND[1]

         Scientific is a manufacturing company that specializes in producing specialty parts and equipment. It regularly creates customized orders based on specialized drawings and blueprints that it prepares for its customers. Scientific formerly employed Rose as its Operations Manager, and Rose worked with its customers to develop manufacturing drawings and blueprints for it to create the necessary final products. Upon ceasing his employment with Scientific, Rose began working for Scientific's customer, FlashParking. Rose allegedly "improperly removed and divulged trade secrets and proprietary assets of Scientific" to FlashParking either while still working for Scientific or after starting to work for FlashParking. Scientific alleges that it "has information and belief that Rose has in his possession a number of the original manufacturer drawings from Scientific and continues to profit from the sale and design of such drawings with many of the former customers of Scientific." Additionally, before termination of his employment with Scientific, Rose "made copies of manufacturing drawings" and "used [Scientific]'s trade secrets for the purpose of manufacturing and selling, in competition with Scientific."

         Scientific supported its response to Rose's TCPA motion with the affidavit of its president, Alan Basta. Basta averred that Scientific "considers the manufacturing diagrams and accompanying instructions and documentation to be a trade secret of [Scientific]" and that Rose's responsibility at Scientific "was to manage relationships and commercial sales with the different commercial customers, the creation of manufacturing drawings, the coordination of purchase material and components, the overseeing of the manufacturing and assembly process, and to ensure quality control and product delivery." Basta averred that Rose "spent the vast amount of his time at [Scientific] servicing FlashParking, a major client of [Scientific]."

         Basta's affidavit stated that Scientific began its work for FlashParking by designing and manufacturing a parking-ticket kiosk (the SmartStation) and then later designing various other items. Basta further averred:

• For each of these manufactured items, [Scientific] created a drawing package that details the assembled product and technical specifications for [its] manufacture;
• The drawings were considered [Scientific's] proprietary information and trade secrets;
• No drawings [of the SmartStation] other than those created by Scientific existed outside of Scientific prior to Rose's termination;
• During the time that [] Rose was an employee of [Scientific], I instructed [him] not to remove any schematics/blue prints and instructions for any components related to FlashParking or any other Client;
• Rose agreed that he would neither remove any of the schematics/blue prints and instructions nor disclose any such documents to FlashParking or those belonging to any other client. I further explained to [] Rose that all such documents were confidential;
• [Scientific] has evidence of the improper removal and disclosure of the drawings by Rose based in part in how quickly vendors of [Scientific] began ...

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