                                                                                            ACCEPTED
                                                                                       12-14-00254-CV
                                                                           TWELFTH COURT OF APPEALS
                                                                                        TYLER, TEXAS
                                                                                   3/9/2015 9:13:09 AM
                                                                                          CATHY LUSK
                                                                                                CLERK

                           NO. 12-14-00254-CV
                     TO THE COURT OF APPEALS FOR
                    THE TWELFTH DISTRICT OF TEXAS                      FILED IN
                           AT TYLER, TEXAS                      12th COURT OF APPEALS
                                                                     TYLER, TEXAS
                                                                 3/9/2015 9:13:09 AM
                   ___________________________________
                                                                     CATHY S. LUSK
                                                                         Clerk
                      NEURODIAGNOSTIC TEX, L.L.C.
                              Appellants,

                                        v.

             ROBERT “JOSH” PIERCE and SYNERGY IOM, L.L.C.
                              Appellees.
                 ___________________________________


            APPELLEE SYNERGY IOM, LLC’S OPENING BRIEF

                   ___________________________________

             Appeal from the 7th District Court, Smith County, Texas,
                      Honorable Kerry L. Russell, Presiding
                       ____________________________

WHITAKER CHALK SWINDLE & SCHWARTZ PLLC
301 Commerce Street, Suite 3500
Fort Worth, Texas 76102-4186
Phone: (817) 878-0500
Fax: (817) 878-0501

WILLIAM BRENT SHELLHORSE
Texas Bar No. 24008022
HUNTER T. MCLEAN
Texas Bar No. 00788026
PATRICK H. ROSE, IV
Texas Bar No. 24079244
WHITAKER CHALK SWINDLE
& SCHWARTZ PLLC
301 Commerce Street, Suite 3500
Fort Worth, Texas 76102-4186
(817) 878-0500
(817) 878-0501 (Facsimile)
                     IDENTITY OF COUNSEL AND PARTIES

      Appellant has accurately set forth the identity of the parties, with the exception of

Synergy’s counsel:

Synergy’s Trial Counsel:
Hunter T. McLean
Patrick H. Rose, IV
William Brent Shellhorse
WHITAKER CHALK SWINDLE & SCHWARTZ PLLC
301 Commerce Street, Suite 3500
Fort Worth, TX 76102


Synergy’s Appellate Counsel:
William Brent Shellhorse
Hunter T. McLean
Patrick H. Rose, IV
WHITAKER CHALK SWINDLE & SCHWARTZ PLLC
301 Commerce Street, Suite 3500
Fort Worth, TX 76102




                                            ii
                                          TABLE OF CONTENTS

IDENTITY OF COUNSEL AND PARTIES ...................................................................... ii

TABLE OF CONTENTS ...................................................................................................iii

INDEX OF AUTHORITIES .............................................................................................. vi

STATEMENT REGARDING ORAL ARGUMENT ......................................................... 1

I. STATEMENT OF FACTS ............................................................................................ 2

II. SUMMARY OF ARGUMENT ..................................................................................... 5

III. ARGUMENT & AUTHORITIES ................................................................................. 6

    A. APPELLANT HAD ADEQUATE TIME FOR DISCOVERY (APPELLANT’S ISSUE #1)....... 6

         1. Appellant Cannot NOW Complain of Scheduling Order ................................... 7

         2. Different Issues Raised On Appeal..................................................................... 7

         3. Motion and Brief Are Insufficient ...................................................................... 8

         4. No Abuse of Discretion in Denying Appellant’s Continuance .......................... 9

             (a).      Maximum Allowable Time Under Scheduling Order ............................. 9

             (b).      Rule 166a(i) Does Not apply to Traditional Summary Judgment ........... 9

             (c).      Appellant Did NOT Need Synergy’s Revenue/Profit Information
                       to Respond to Summary Judgment Challenges ....................................... 9

     B. ADEQUATE NOTICE OF SUMMARY JUDGMENT
        GROUNDS (APPELLANT’S ISSUE #2C) ..................................................................... 13

         1. Appellant’s Special Exceptions are Insufficient............................................... 14

         2. Synergy’s Motion Sufficiently Delineated Grounds ........................................ 14




                                                          iii
C. COURT PROPERLY CONSIDERED SYNERGY’S SUMMARY JUDGMENT
   EVIDENCE (APPELLANT ISSUE #3) .......................................................................... 15

   1. Trial Court Properly Considered Second Supplement
      (i.e. Appellant’s Judicial Admissions) .............................................................. 15

   2. Hearing Transcripts Were Properly Admitted .................................................. 19

D.SYNERGY COULD NOT INTERFERE WITH THE COVENANT BECAUSE
  IT IS NOT ANCILLARY TO AN OTHERWISE ENFORCEABLE
  AGREEMENT (APPELLANT’S ISSUE #4B)................................................................. 20

   1. Training .......................................................................................................... 23

        (a).      No Evidence that Training or Advancement of Funds for
                  Training Was Worthy of Protection ...................................................... 23

        (b).      Training and Advancement of Funds for Training Was NOT
                  An Interest Worthy of Protection .......................................................... 24

   2. Covenant Not Designed to Enforce Pierce’s Return
      Promise Regarding Training ............................................................................. 27

        (a).      No Evidence Covenant Was Designed to Enforce Pierce’s Promise
                  Regarding Training ................................................................................ 27

        (b).      Covenant NOT Designed to Enforce Pierce’s
                  Promise Regarding Training.................................................................. 28

   3. Customer Information Not an Interest Worthy of Protection ........................... 29

        (a).      No Evidence that Customer Information Was Worth
                  Of Protection or Reasonably Related to One......................................... 29

        (b).      Customer Identities NOT Worthy of Protection.................................... 34

        (c).      Surgeon Identities/Preferences NOT an Interest Worthy of Protection.35

        (d).      Appellants’ Pricing NOT an Interest Worthy of Protection .................. 36

        (e).      Appellant Not Relieved From Establishing Ancillary Requirements ... 38




                                                         iv
      E. THE COVENANT’S RESTRAINTS ARE UNREASONABLE (APPELLANT’S ISSUE #4C).40

          1. No Evidence that 5 Year Covenant Was Reasonable ....................................... 40

               (a).      Advancement Does NOT Make 5 Years Reasonable............................ 41

               (b).      Long Employment Does NOT Equal Long Covenant........................... 42

          2. Geographic Restraints Were Unreasonable ...................................................... 43

          3. Scope of Activities from Which Pierce is Prohibited is Unreasonable ............ 46

      G.TRIAL COURT NOT REQUIRED TO REFORM COVENANT (APPELLANT ISSUE #4E).. 48

      H.APPELLANT DID NOT PROVE ELEMENTS OF CLAIM (APPELLANT ISSUE #4D) ....... 52

          1. Damages Foreclosed by Statute ........................................................................ 52

          2. No Evidence of Lost Profits (i.e. “Recoverable Damages”) ............................ 54

          3. No Evidence of Interference (Appellant Issue #6) ........................................... 55

PRAYER ........................................................................................................................... 58

CERTIFICATE OF COMPLIANCE ................................................................................ 59

CERTIFICATE OF SERVICE.......................................................................................... 59




                                                                 v
                                         INDEX OF AUTHORITIES

Cases
Acad. of Skills & Knowledge, Inc. v. Charter Sch., USA, Inc.,
  260 S.W.3d 529, 534 (Tex. App.—Tyler 2008, pet. denied) .................................. 38, 39
Accord Amigo Broad., LP v. Spanish Broad. Sys., Inc.,
  521 F.3d 472, 493 (5th Cir. 2008) ................................................................................. 56
ACS Invs., Inc. v. McLaughlin, 943 S.W.2d 426, 431 (Tex.1997) .................................... 56
Aldous v. Bruss, 405 S.W.3d 847, 857
  (Tex. App.—Houston [14th Dist.] 2013, no pet.)........................................................... 14
Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 649
  (Tex. 2006)......................................................................................................... 22, 23, 26
Allan J. Richardson & Assocs., Inc. v. Andrews, 718 S.W.2d 833, 837
  (Tex. App.—Houston [14th Dist.] 1986, no writ) .......................................................... 31
Allen v. United of Omaha Life Ins. Co., 236 S.W.3d 315, 326
  (Tex. App.—Fort Worth 2007, pet. denied) .................................................................... 9
Am. Fracmaster, Ltd. v. Richardson, 71 S.W.3d 381
  (Tex. App.—Tyler 2001, pet. granted, judgment vacated w.r.m.) ................................ 40
Am. Precision Vibrator Co. v. Nat'l Air Vibrator Co., 764 S.W.2d 274, 276
  (Tex. App.—Houston [1st Dist.] 1988) as modified, 771 S.W.2d 562
  (Tex. App.—Houston [1st Dist.] 1989, no writ)............................................................. 31
Arabesque Studios, Inc. v. Academy of Fine Arts Int’l, 529 S.W.2d 564
  (Tex. App.—Dallas 1975, no writ) .......................................................................... 12, 13
Atlas Copco Tools v. Air Power Tool & Hoist, 131 S.W.3d 203, 209
  (Tex. App.—Fort Worth 2004, pet. denied) ............................................................ 54, 55
Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 857 (Tex. App.—Houston
  [14th Dist.] 2001, pet. denied) ........................................................................................ 56
Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) ....................................... 14
Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996)..................................... 16


                                                              vi
Benson v. Gaston, 2014 Tex. App. LEXIS 2753, at *6 (Tex. App.—Tyler 2014, pet.
  denied)............................................................................................................................ 53
Blake v. Lewis, 886 S.W.2d 404, 409 (Tex. App.—Houston [1st Dist.] 1994, no writ) ..... 8
Browning–Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex.1993) ................................. 56
Butler v. Arrow Mirror & Glass, Inc., 51 S.W.3d 787, 792
  (Tex. App.—Houston [1st Dist.] 2001, no pet.) ..................................... 18, 44, 45, 46, 52
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 686 (Tex. 2002).............. 16
Carter v. MacFadyen, 93 S.W.3d 307, 311 (Tex. App.—Houston
  [14th Dist.] 2002, pet. denied) .......................................................................................... 6
Castano v. San Felipe Ag., Mfg., & Irrigation Co., 147 S.W.3d 444, 453
  (Tex. App.—San Antonio 2004, no pet.)....................................................................... 14
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625-26 (Tex. 1996) .......................... 53
Cobb v. Caye Publ. Grp., Inc., 322 S.W.3d 780, 784-86
  (Tex. App.—Fort Worth 2010, no pet.)................................................................... 44, 45
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923
  (Tex. 2013) reh'g denied (Feb. 14, 2014) ...................................................................... 20
Cook v. Nacogdoches Anesthesia Grp., L.L.P., 167 S.W.3d 476, 480
  (Tex. App.—Tyler 2005, no pet.) .................................................................................. 17
Courtney v. Nibco, Inc., 152 S.W.3d 640, 644 (Tex. App.—Tyler 2004, no pet.) ........... 30
Custom Drapery Co. v. Hardwick, 531 S.W.2d 160, 165
  (Tex. Civ. App.—Houston [1st Dist.] 1975, no writ)..................................................... 24
Dale v. Hoschar, 2014 Tex. App. LEXIS 8816, *4
  (Tex. App.—Dallas 2014, no pet.)........................................................................... 43, 44
Davis v. HydPro, Inc., 839 S.W.2d 137, 140 (Tex. App.—Eastland 1992, writ denied) . 56
Daytona Grp. of Tex., Inc. v. Smith, 800 S.W.2d 285, 290
  (Tex. App.—Corpus Christi 1990, writ denied) .......................................... 23, 26, 49, 50
DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 681-82 (Tex. 1990)............. 40, 48, 49, 50
Emergicare Sys. Corp. v. Bourdon, 942 S.W.2d 201, 204
  (Tex. App.—Eastland 1997, no pet) .............................................................................. 49


                                                                 vii
Evan's World Travel, Inc. v. Adams, 978 S.W.2d 225, 230-31
  (Tex. App.—Texarkana 1998, no pet.)...................................... 18, 21, 24, 44, 45, 46, 52
Flory v. Daimler Chrysler Corp., 2003 Tex. App. LEXIS 10235, at *7-*8
  (Tex. App.—Tyler 2003, pet. denied) ........................................................................... 53
Flynn Bros., Inc. v. First Med. Associates, 715 S.W.2d at 785......................................... 18
Gallagher Healthcare Ins. Services v. Vogelsang, 312 S.W.3d 640, 654
  (Tex. App.—Houston [1st Dist.] 2009, pet. denied) ...................................................... 40
Gambling Paraphernalia Devices v. State, No. 12-01-00161, 2002 Tex. App.
  LEXIS 3613, *5 (Tex. App.—Tyler 2002, no pet.)......................................................... 7
Gomez v. Zamora, 814 S.W.2d 114, 118 (Tex. App.—Corpus Christi 1991, no writ)….44
Grace v. Orkin Exterminating Co., 255 S.W.2d 279, 285
  (Tex. Civ. App.—Beaumont 1953, writ ref'd n.r.e.)...................................................... 24
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 n.1 (Tex. 1992).................... 54, 55
Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001) .............. 16
Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 905 (Tex. 2000) ..................... 16
Hospital Consultants, Inc. v. Potyka, 531 S.W.2d 657, 662
  (Tex. Civ. App.—San Antonio 1975, writ ref'd n.r.e.) .................................................. 23
IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W .3d 191, 197
  (Tex. App. — Fort Worth 2005, no pet.)....................................................................... 31
In re Cauley, 437 S.W.3d 650, 657 (Tex. App.—Tyler 2014, orig. proceeding) ....... 30, 33
John Paul Mitchell Sys. v. Randalls Food Markets, Inc., 17 S.W.3d 721, 730
  (Tex. App.—Austin 2000, pet. denied) ......................................................................... 56
John R. Ray & Sons, Inc. v. Stroman, 923 S.W.2d 80, 84-85
  (Tex. App.—Houston [14th Dist.] 1996, writ denied)..........20, 40, 45, 46, 47, 48, 49, 50
Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 207 (Tex. 2002) ......................... 15
Johnston v. Am. Med. Int'l, 36 S.W.3d 572, 576 (Tex. App.—Tyler 2000, pet. denied).. 53




                                                       viii
Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 663, 665 (Tex.
  1990), superseded on other grounds by statute as stated in Coinmach Corp. v.
  Aspenwood Apartment Corp., 417 S.W.3d 909, 923
  (Tex. 2013) reh'g denied (Feb. 14, 2014) .......................................................... 18, 20, 53
Lazer Spot, Inc. v. Hiring Partners, Inc., 387 S.W.3d 40, 49
  (Tex. App.—Texarkana 2012, pet. denied) ................................................. 18, 21, 24, 56
Malooly Brothers, Inc. v. Napier, 461 S.W.2d 119, 120 (Tex. 1970)............................... 53
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
  289 S.W.3d 844, 849 (Tex. 2009).................................................................................. 21
Marsh United States, Inc. v. Cook, 354 S.W.3d 764, 768, 773 (Tex. 2011)............... 22, 43
Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989)......................................................... 16
McClure v. Attebury, 20 S.W.3d 722, 729 (Tex. App.—Amarillo 1999, no pet.) .............. 6
McConathy v. McConathy, 869 S.W.2d 341, 342 (Tex. 1994) ......................................... 20
McCoy v. Rogers, 240 S.W.3d 267, 272 (Tex. App.—Houston [1st Dist.] 2007, pet.
  denied)............................................................................................................................ 53
Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593, 599
  (Tex. App.—Amarillo 1995, no writ)............................................................................ 21
Morgan v. City of Alvin, 175 S.W.3d 408, 420
  (Tex. App.—Houston [1st Dist.] 2004, no pet.) .............................................................. 8
National Union Fire Ins. Co. v. Valdez, 863 S.W.2d 458, 461 (Tex. 1993) ..................... 39
NCH Corp. v. Share Corp., 757 F.2d 1540, 1543–1544 (5th Cir.1985) ...................... 18, 21
Numed v. McNutt, 724 S.W.2d 432, 435
  (Tex. Civ. App.—Fort Worth 1987, no writ) .................................................... 31, 37, 38
Patel v. City of Everman, 179 S.W.3d 1, 17 (Tex. App.—Tyler 2004, pet. denied) ........ 43
Peat Marwick Main & Co. v. Haass, 818 S.W.2d 381, 387
  (Tex. 1991)..............................................................passim, 18, 20, 43, 44, 45, 46, 47, 52
Philip H. Hunke, D.D.S. v. Wilcox, 815 S.W.2d 855, 858
  (Tex. App.—Corpus Christi 1991, writ denied) ............................................................ 36
Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex. 1998).................................. 52, 55


                                                                 ix
Rest. Teams Intern., Inc. v. MG Sec. Corp., 95 S.W.3d 336, 339
  (Tex. App.—Dallas 2002, no pet.)................................................................................... 6
Sentinel Integrity Solutions, Inc. v. Mistras Grp., Inc., 414 S.W.3d 911, 921
  (Tex. App.—Houston [1st Dist.] 2013, pet. denied) ...................................................... 49
Sharma v. Vinmar Int'l, Ltd., 231 S.W.3d 405, 424
  (Tex. App.—Houston [14th Dist.] 2007, no pet.)........................................................... 34
Simon v. Tudor Ins. Co., 2014 Tex. App. LEXIS 1321, 18-19
  (Tex. App.—Dallas 2014, no pet.)................................................................................... 8
Sivley v. Sivley, 972 S.W.2d 850, 861 (Tex. App.—Tyler 1998, no pet.)........................... 7
SJW Prop. Commerce, Inc. v. Sw. Pinnacle Properties, Inc., 328 S.W.3d 121, 152
  (Tex. App.—Corpus Christi 2010, pet. denied)............................................................. 56
Star-Telegram, Inc. v. Walker, 834 S.W.2d 54, 57 (Tex. 1992) ................................. 34, 37
Stone v. Griffin Communications & Sec. Sys., Inc., 53 S.W.3d 687, 696, no pet.),
  overruled on other grounds by Am. Fracmaster, Ltd. v. Richardson, 71 S.W.3d 381
  (Tex. App.—Tyler 2001, pet. granted, judgment vacated w.r.m.) .......................... 40, 41
Tex. Dep't of Pub. Safety Officers Ass'n v. Denton, 897 S.W.2d 757, 761
  (Tex. 1995)..................................................................................................................... 39
Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 844–45
  (Tex. App.—Houston [1st Dist.] 1987, writ ref'd n.r.e.), cert. dismissed,
  485 U.S. 994, 108 S.Ct. 1305, 99 L.Ed.2d 686 (1988).................................................. 56
Texas Div.-Tranter, Inc. v. Carrozza, 876 S.W.2d 312, 314 (Tex. 1994)......................... 33
Travel Masters, Inc. v. Star Tours, Inc., 827 S.W.2d S.W.2d 830, 832-833
  (Tex. 1991)............................................................................................................... 18, 21
U.S. Risk Ins. Group, Inc. v. Woods, 399 S.W.3d 295, 301
  (Tex. App.—Dallas 2013, no pet.)................................................................................. 47
Weatherford Oil Tool Co. v. Campbell,
  161 Tex. 310, 340 S.W.2d 950, 951-52 (1960) ....................................................... 44, 47
Webb v. Hartman Newspapers, Inc., 793 S.W.2d 302, 303
  (Tex. App.—Houston [14th Dist.] 1990, no writ) ........................................ 44, 45, 46, 52


                                                                x
Zep Mfg. Co. v. Harthcock, 824 S.W.2d 660-61, 654, 660, 663-64
   (Tex. App.—Dallas 1992, no writ) .................................................. 21, 44, 45, 46, 52, 53

Statutes
TEX. BUS. & COMM. CODE §§ 15.50-15.52......................................................................... 6
TEX. BUS. & COMM. CODE § 15.05 ................................................................................... 21
TEX. BUS. & COMM. CODE ANN. § 15.50................................................................ 6, 21, 40
TEX. BUS. & COMM. CODE ANN. §§ 15.51(b), (c)..................................... 19, 21, 40, 49, 53

Rules
TEX. R. APP. P. 33.1(a) ........................................................................................................ 7
TEX. R. CIV. P. 198.3 ................................................................................................... 16, 18
TEX. R. CIV. P. 90 .............................................................................................................. 14
TEX. R. CIV. P. 91 .............................................................................................................. 14




                                                                xi
                   STATEMENT REGARDING ORAL ARGUMENT

      Appellee believes that the issues have been fully briefed and does not believe

that oral argument will aid this Court. Appellee will participate in oral argument if

Appellant’s request for oral argument is granted.




                                         1
          Appellee Synergy IOM LLC (“Synergy”) believes that Appellant Neurodiagnostic

Tex. LLC’s (“Appellant”) brief fails to set forth all relevant facts; therefore, Synergy

provides the following statement of facts. Synergy requests that this Court affirm the

judgment and would respectfully show this Court as follows:

                                    I. STATEMENT OF FACTS

          Synergy and Appellant are among a number of companies providing intraoperative

neurophysiologic monitoring (“IOM”) to hospitals. (CR 231). Appellant contracts with

hospitals where other IOM companies simultaneously contract with that same hospital.

(CR 231, 962).

          While a surgeon decides whether to have IOM during a surgical procedure (CR

231-34, 821), Appellant does not contract with surgeons (CR 231-34) and does not

consider surgeons to be its customers. (CR 231-34). The surgeon merely requests that the

surgical facility have IOM available. (CR 231-34).

          The surgical facility (e.g., a hospital) contracts directly with the IOM provider (CR

231-32, 821, 856), and it is the hospital that schedules the IOM procedure and assigns

cases to Appellant. (CR 235-37).1 Appellant cannot provide services in a hospital unless

it contracts with that hospital. (CR 231-34). Appellant characterizes itself in this process

as a subcontractor to the hospital. (CR 266).

          Appellee Josh Pierce (“Pierce”) is a former employee of Appellant and is certified

as an IOM technician. (CR 172).               As an IOM technician, Pierce works in surgical

operating rooms where he simply connects monitoring equipment to patients and makes

1
    Appellant does not know how it is selected to provide IOM services on a given case. (CR 235-37).


                                                     2
sure the equipment is working. (CR 172).                   Pierce does not interpret the IOM data

gathered by the equipment. Pierce stays in the operating room monitoring the equipment

while a neurologist remotely monitors and interprets the data throughout surgery. (CR

172). Pierce does not perform IOM outside the four walls of a surgical facility. (CR

172). And, Pierce does not use any confidential information in the performance of his

duties.     In fact, an IOM technicians are board certified such that their duties are

standardized throughout the industry. (CR 183-84, 457).

          While Appellant’s employee, Pierce did not negotiate with hospitals and was not

involved in meetings where negotiations occurred. (CR 173). He was not asked to solicit

customers and did not solicit customers on behalf of Appellant. (CR 173). Pierce was

never given Appellant’s marketing materials and does not recall receiving any

information from Appellant that Appellant indicated was proprietary or secret. (CR 173).

          Pierce signed an employment agreement containing a covenant not to compete

(the “Covenant”). (CR173, 176-90).2 In the employment agreement, Appellant agreed to

advance Pierce the costs for certification training; however, Appellant did so in exchange

for: (i) Pierce’s promise to work for 48 months after becoming board eligible; or (ii)

repayment of $5,000.00, with interest. (CR183-186). Pierce is not prohibited from using

or disclosing this training in any manner whatsoever. (CR 179-80).

          The Covenant prohibits Pierce from, among other things, engaging in any business

or activity which “directly” or “indirectly” competes with Appellant; there is also an “all


2
 The employment agreement is contained in the Appendix as Exhibit A, which is filed by Synergy
contemporaneously herewith.


                                                      3
customers” non-solicitation provision. (CR 181-82).           Although “directly” and

“indirectly” are undefined, Appellant admits that an IOM tech working with surgeon with

whom Appellant has not previously worked is neither directly nor indirectly competitive

with Appellant. (CR 220-21).

       Dr. Brent Alford (“Dr. Alford”) is a surgeon. (CR 173). For a short period of time

in 2012, Dr. Alford owned a monitoring company, and that company used Appellant as a

subcontractor to provide monitoring services. (CR 209-10). Dr. Alford’s monitoring

company paid Appellant $150 per procedure, as a subcontractor performing monitoring

services; however, this relationship ended at the conclusion of 2012. (CR 209-10).

       Appellant also had historically provided IOM at one or more hospitals where Dr.

Alford was the surgeon. (CR 173, 208). Pierce occasionally served as the technician on

some of those surgeries. (CR 173).

       Synergy was formed in 2012 and was owned partially by Dr. Alford. (CR 173,

208, 937). However, Dr. Alford is not employed by Synergy and does not manage

Synergy. (CR 937).

       By March 2013, Synergy was routinely handling all IOM for Dr. Alford’s cases,

with only minimal overflow being handled by Appellant. (CR 211, 208, 277-79).

Appellant characterizes this minimal overflow as a “backstop” for the time or two when

Synergy did not have enough IOM personnel to handle the work or did not have

privileges at a hospital. (CR 251).

       Pierce worked for Appellant for approximately eight years. (CR 172). He left in

October 2013 and went to work as an IOM technician for Synergy. (CR 173, 987).


                                            4
       Since becoming a Synergy employee, Pierce has only worked with two surgeons

and has not participated in any surgery where the surgeon was a surgeon that he had

worked with while an employee of Appellant, this includes Dr. Alford. (CR 173, 958).

Furthermore, Synergy assigned Pierce primarily to Victory Medical Center in Plano, a

hospital that he did not work at while in Appellant’s employ. (CR 934, 958, 964). Pierce

also has not solicited surgeons, hospitals, or surgery centers to do business with Synergy.

(CR 173-74).

                            II. SUMMARY OF ARGUMENT

       Appellant’s only cause of action against Synergy is tortious interference with

Pierce’s Covenant. Appellant makes numerous dilatory challenges, including that the

trial court abused its discretion by: (i) failing to grant a continuance; (ii) failing to grant

special exceptions; and (iii) failing to strike summary judgment evidence. Appellant

waived many of these complaints and the trial court did not abuse its discretion.

       As to Appellants’ merit-based challenges, Synergy cannot be liable for interfering

with an unenforceable contract. The Covenant is invalid because: (i) Appellant did not

have an interest worthy of protection; (ii) any consideration given to Pierce was not an

interest worthy of protection or reasonably related to one; and (iii) as it relates to training,

the Covenant was not designed to enforce Pierce’s return promise regarding training.

       The Covenant is also unenforceable because it contains restraints (geographic,

duration, and activity) that are unreasonable. Assuming (arguendo) Appellant sought

reformation, Appellant failed to establish reasonable, alternative restraints. Reformation

was, therefore, properly denied.


                                               5
         Finally, Appellant lacks evidence supporting the elements of its causes of action.

Appellant failed to present evidence of Synergy’s interference. Appellant also has no

evidence of damages and is additionally foreclosed from obtaining damages under the

Covenant Not to Compete Act3 (the “Act”). Appellant also failed to challenge Synergy’s

damage-foreclosure ground. The trial court’s judgment should be affirmed.

                           III. ARGUMENT & AUTHORITIES

                           A. APPELLANT HAD ADEQUATE TIME
                         FOR DISCOVERY (APPELLANT’S ISSUE #1)

         Appellant contends that it had inadequate time to conduct discovery; thus, it

argues the trial court abused its discretion by failing to grant a continuance.4 (CR 1458).

The trial court did not abuse its discretion by denying Appellant’s continuance request.

         Whether an adequate time for discovery has occurred is case specific and

determined by factors such as the nature of the cause of action, the nature of the evidence

necessary to controvert the no-evidence motion, and the length of time the case had been

active in the trial court. Rest. Teams Intern., Inc. v. MG Sec. Corp., 95 S.W.3d 336, 339

(Tex. App.—Dallas 2002, no pet.).

         Some matters may require minimal or no discovery in order to respond to

summary judgment. McClure v. Attebury, 20 S.W.3d 722, 729 (Tex. App.—Amarillo

1999, no pet.); Rest. Teams, 95 S.W.3d at 339. Requiring parties to conduct discovery

when it will make no difference is a waste of time and expense. Carter v. MacFadyen,

93 S.W.3d 307, 311 (Tex. App.—Houston [14th Dist.] 2002, pet. denied).

3
    TEX. BUS.& COMM. CODE §§15.50-15.52.
4
    App. Br. p. 15.


                                              6
                1. Appellant Cannot NOW Complain of Scheduling Order

        Appellant complains to this Court of the expedited nature of the scheduling order

claiming that the order resulted in a condensed and the inadequate discovery period.5

However, Appellant did not complain to the trial court of the scheduling order in any

manner whatsoever. (CR 768-72). Appellant cannot complain of the scheduling order

when it did not complain below. TEX. R. APP. P. 33.1(a); Sivley v. Sivley, 972 S.W.2d

850, 861 (Tex. App.—Tyler 1998, no pet.).

                             2. Different Issues Raised On Appeal

        Appellant’s brief is a substantial departure from its motion for continuance. Other

than the mention of two depositions, both of which occurred, Appellant’s motion for

continuance stated only a general need for evidence of “lost profits” but failed to: (i)

identify any specific discovery requests or evidence that it lacked; or (ii) how it was

prevented from responding to the summary judgment motions by the lack of any

evidence or Synergy’s discovery responses. (CR 768-72).6

        On appeal, Appellant recites a list of discovery requests to which Synergy

objected. Neither the list nor these arguments were presented to the trial court.7 The

complaint on appeal must also be the same as that presented in the trial court. Gambling

Paraphernalia Devices v. State, No. 12-01-00161, 2002 Tex. App. LEXIS 3613, *5 (Tex.




5
  Appellant’s Br. p. 17.
6
  Appellant mentioned Dr. Alford’s deposition might produce evidence of Synergy’s intent to interfere,
but Appellant does inform the Court why this is needed - Appellant presented text messages from Dr.
Alford to argue Synergy’s intent (CR 1022-23, 1064-67) and had already taken Pierce’s deposition.
7
  This is in addition to the new complaint about the scheduling order.


                                                   7
App.—Tyler 2002, no pet.). Appellant has not raised the same complaint; thus, this

Court should not consider Appellant’s argument.

                             3. Motion and Brief Are Insufficient

        As previously noted, other than the two above-mentioned depositions both of

which actually occurred, Appellant’s motion for continuance merely stated a need for

evidence of “lost profits,” without any specifics. General allegations in a motion for

continuance are insufficient; the motion or the affidavit must state specific reasons for the

request. Morgan v. City of Alvin, 175 S.W.3d 408, 420 (Tex. App.—Houston [1st Dist.]

2004, no pet.). Appellant was required, among other things, to identify for the trial court

what was material and why. Blake v. Lewis, 886 S.W.2d 404, 409 (Tex. App.—Houston

[1st Dist.] 1994, no writ). The trial court did not abuse its discretion in the face of such a

deficient motion.

        On appeal Appellant is required, among other things, to provide this Court with

“substantive analysis explaining why denial of the motion[] for continuance . . . was

improper” and “address how the additional time and discovery would have allowed

[Appellant] to respond to the motions for summary judgment.” Simon v. Tudor Ins. Co.,

2014 Tex. App. LEXIS 1321, 18-19 (Tex. App.—Dallas 2014, no pet.). Appellant’s brief

does neither.8 Appellant has further waived this point on appeal by its deficient brief. Id.




8
  For example, there is nothing showing that Appellant learned anything relevant in Dr. Alford’s or Dr.
Craven’s depositions that could have been used in responding to the summary judgment motions, had the
trial court granted a continuance. Appellant also fails to address any of the written discovery that it
complains of for the first time on appeal.


                                                   8
             4. No Abuse of Discretion in Denying Appellant’s Continuance

                (a). Maximum Allowable Time Under Scheduling Order

         Even if Appellant’s continuance complaint is considered, it is without merit. The

trial court entered a scheduling order imposing a May 12, 2014 deadline for the filing of

motions seeking summary judgment. (CR 33-35). Synergy filed its motion on Friday,

May 9, 2014. (CR 140). Appellant had all of the time allowable under the scheduling

order.

          (b). Rule 166a(i) Does Not Apply to Traditional Summary Judgment

         Appellant’s motion for continuance sought relief claiming an inadequate time for

discovery under Texas Civil Procedure Rule 166a(i). The “adequate time for discovery”

provision of Rule 166a(i) does not apply to traditional motions for summary judgment.

Allen v. United of Omaha Life Ins. Co., 236 S.W.3d 315, 326 (Tex. App.—Fort Worth

2007, pet. denied). Synergy raised several traditional summary judgment grounds in its

motion, including that damages were foreclosed as a result of the unreasonable

geographic restrictions. Thus, the trial court could not have abused its discretion in

considering Synergy’s traditional summary judgment grounds.

          (c). Appellant Did NOT Need Synergy’s Revenue/Profit Information
                     to Respond to Summary Judgment Challenges

         With regard to Synergy’s no-evidence challenges, Appellant’s motion for

continuance stated that the depositions of Dr. Alford and Pierce’s expert (Dr. Cravens)

had been scheduled for June 10 and 13, respectively. (CR 769). These depositions

occurred; however, Appellant provides no argument and fails to direct this Court to any



                                             9
evidence that it uncovered in either deposition that Appellant did not have when it

responded to the summary judgment motions. Thus, Appellant has not shown the trial

court abused its discretion based on the assertions raised in the motion for continuance.

       The written discovery responses that Appellant currently identifies as “lacking”

are: (i) all hospitals in which Synergy has worked; (ii) contact information for every

surgeon that Pierce has worked with and hospital he has worked in; (iii) all documents

between Synergy and Dr. Alford regarding Appellant, Pierce, and hiring IOM techs; (iv)

Synergy’s ownership and corporate documents; (v) all documents regarding this case; (vi)

Synergy’s bills and receipts for IOM procedures where Pierce was the tech; and (vii)

Synergy’s profit and loss statements, account of income and expenses and its general

ledger.9

       Pierce only worked with two surgeons (CR 962) and Appellant was provided with

a list of every procedure in which Pierce was involved, including identifying the date,

time, hospital and doctor. (CR 118, 133-38, 949-54). Appellant attached this list as an

exhibit to its summary judgment response. (CR 949-54). Thus, Appellant did not need a

continuance for any information relating to the procedures in which Pierce was involved.

       The remaining discovery identified as lacking in Appellant’s brief is Synergy’s

revenue, profits, and other financial information (together “Synergy’s revenues/profits”).


9
  Much of Appellant’s discovery is manifestly overly broad and not reasonably tailored to include only
information regarding Pierce. Nor is there anything to show why the locations where Synergy operated
was necessary for Appellant’s summary judgment response. If Appellant had such a valuable relationship
with surgeons, as it tries to convince this Court, why would Appellant need to be provided with contact
information provided by Synergy. Finally, there is nothing showing why any of the other information
was necessary to respond to Pierce’s summary judgment Synergy’s ownership and corporate documents
and all documents regarding this case.


                                                  10
Appellant had all of the information to identify every procedure in which Pierce was

involved and determine whether Appellant had been damaged by any of those

procedures. Appellant did nothing to bring forward evidence of any actual loss or its

own financial information to show a loss of any amount. Appellant attempts to distract

this Court from its shortcomings arguing it needed Synergy’s revenue/profits. For a

number of reasons, it was unnecessary for Appellant to have Synergy’s

revenues/profits in order to respond to the summary judgment motions.

           Foremost, Appellant was absolutely barred by the Act from obtaining damages for

any alleged violation of the Covenant because it contained unreasonable restraints.10 As

a consequence, lost profits are immaterial to Appellant’s summary judgment response.

Therefore, a continuance was unnecessary to obtain Synergy’s revenues/profits.

           Second, Appellant testified that it had documents showing its actual economic

damages, including lost profits. (CR 339-41, 349). It chose not to offer that evidence.

Appellant cannot create a need for a continuance by refusing to come forward with its

own documents.

           Next, if Synergy’s revenues/profits were relevant to anything, it was only to the

quantum of Appellant’s alleged damages. Appellant must first, however, establish it

suffered damages before there is a need to quantify.            It could not establish this

predicate fact.

           Pierce’s leaving had nothing to do with any decline in Appellant’s revenues from

Dr. Alford’s group. (CR 337-38). When asked — “Do you have any evidence that Josh

10
     Section III(H)(1), infra.


                                               11
had anything to do with Dr. Alford’s decision to stop using Neurodiagnostics,” the

answer was “I don’t know.” (CR372).

       Except for occasions where it was short staffed, Appellant repeatedly admitted

that it did not know whether it had lost any business following Pierce leaving. (CR

342-343, see also CR 332-33). When asked:

               Q.   Since Josh — since his employment with
               Neurodiagnostics was terminated, from that time
               to the present are you able to identify a single
               surgical procedure that Neurodiagnostics lost as
               a result of him working for Synergy?
               A.   I don’t know. 11

(CR 372-73). Appellant wholly failed to bring forward any evidence that it experienced

any damages. If Appellant did not lose business, Synergy’s revenues/profits were neither

material nor necessary to respond to Pierce’s summary judgment motion. Therefore, the

trial court could not have abused its discretion in deny the request for a continuance.

       Despite claiming to have its own evidence of damages, failing to establish it had

suffered an injury, and the statutory bar to the recovery of damages, Appellant argues that

Synergy’s revenues/profits are relevant under Arabesque Studios, Inc. v. Academy of Fine

Arts Int’l, 529 S.W.2d 564 (Tex. App.—Dallas 1975, no writ). Appellant’s reliance on

Arabesque is misplaced.

       In Arabesque, the departing employee admittedly took thirty-two students from his

former employer and moved those students to the new employer’s business. Id. at 569.

Because the departing employee lured away the customers, the Arabesque Court held the

11
  Appellant had a list of every IOM procedure (including the doctor and facility) that Pierce performed
while at Synergy. (CR 118, 133-38, 949-54). Appellant had sufficient information by which to identify
any lost procedures.


                                                  12
jury could infer the profits the new employer received would have, at least in part,

accrued to old employer. Id. No similar evidence exists in this case.

          Here, Appellant admits that months before Pierce left its employ, Appellant was

doing little to no IOM work where Dr. Alford was the surgeon. (CR 208, 211, 277-78).

Appellant proffered no evidence that Pierce’s change in employment caused it any injury

(CR 337-38, 342, 343, 372, 373, 332-33) and whatever revenue Appellant had

historically received from procedures where Dr. Alford or his group was the surgeon had

ceased long before Pierce became a Synergy employee. (CR 337).

          Unlike Arabesque, Pierce stopped working for Appellant months after Appellant

was no longer being assigned by hospitals to Dr. Alford’s and his group’s surgical cases.

In other words, Pierce was not the pied piper luring Dr. Alford or his group away.

Arabesque is inapposite and Synergy’s revenues/profits were neither material nor

necessary for Appellant to respond to Pierce’s summary judgment motion. Therefore, the

trial court did not abuse its discretion in denying Appellant’s request for a continuance.

                              B. ADEQUATE NOTICE OF SUMMARY
                         JUDGMENT GROUNDS (APPELLANT’S ISSUE #2C)12

          Appellant asserts Synergy’s summary judgment motion failed to delineate

between traditional summary judgment grounds and no-evidence summary judgment

grounds. Based on this assertion, Appellant argues the trial court erred by failing to grant

its special exceptions. (CR 1448).




12
     Appellant’s issues 2a-2b are not directed solely to Synergy’s motion.


                                                      13
       A trial court has broad discretion in ruling on special exceptions. Baylor Univ. v.

Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007). A trial court's ruling will be reversed

only if there has been an abuse of discretion. Aldous v. Bruss, 405 S.W.3d 847, 857 (Tex.

App.—Houston [14th Dist.] 2013, no pet.). The trial court did not abuse its discretion.

                   1. Appellant’s Special Exceptions are Insufficient

       Absent from Appellant’s special exceptions and also absent from its briefing to

this Court is any specific paragraph or ground that Appellant asserts is unclear or

objectionable. (CR 812-14). Appellants’ special exceptions are nothing more than a

claim that Synergy’s entire summary judgment motion is “general and confusing.”

       Special exceptions must “point out intelligibly and with particularity” the alleged

defect or omission in the pleadings. TEX. R. CIV. P. 91. When special exceptions fail to

specifically point out the defective allegations, they constitute a general demurrer and are

prohibited. TEX. R. CIV. P. 90; see also Castano v. San Felipe Ag., Mfg., & Irrigation

Co., 147 S.W.3d 444, 453 (Tex. App.—San Antonio 2004, no pet.). Because Appellant

failed to “point out intelligibly and with particularity” the complained-of defects, the trial

court did not abuse its discretion in denying the special exceptions.

                 2. Synergy’s Motion Sufficiently Delineated Grounds

       Synergy’s motion for summary judgment clearly delineated between the summary

judgment grounds raised. In each instance where Synergy challenged a lack of evidence,

Synergy stated there is “no evidence” and underlined the words “no evidence” to

emphasize that Synergy was making a no-evidence challenge.                This is shown in

Paragraphs 29, 36, 37, 43, 50, 51, 55, 56, 59, 62, 72, 76, 88, 90, 97, 104, 105, 110, and


                                             14
111 of Synergy’s motion. (CR 149, 151-155, 158-59, 162, 164-67). In each instance,

Synergy went on to identify what it was that Appellant had to prove and further identified

what evidence Appellant lacked. This is exactly what is required of a no-evidence

challenge. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 207 (Tex. 2002).

      Synergy’s traditional summary judgment grounds, on the other hand, were

supported by evidence and textually indicated a basis other than a lack of evidence. By

way of example, Paragraphs 38-40 (“evidence conclusively establishes …” and

“Appellant admits”); Paragraph 58 (“conclusory claims disproven by the facts);

Paragraphs 63-66 (nowhere in section is there a mention of “no evidence”); Paragraphs

67-71 (same); Paragraph 87 “as a matter of law it is . . . .”). (CR 148, 153, 155-58, 161-

62, 167-68). The trial court did not abuse its discretion by denying Appellant’s special

exceptions.

                   C. COURT PROPERLY CONSIDERED SYNERGY’S
                SUMMARY JUDGMENT EVIDENCE (APPELLANT ISSUE #3)

      Appellant’s third point complains that the trial court erred by refusing to strike

Synergy’s summary judgment evidence offered via supplementation and erred by

refusing to grant Appellant’s objections to hearing excerpts tendered by Synergy. These

complaints will be addressed in turn.

                         1. Trial Court Properly Considered
               Second Supplement (i.e. Appellant’s Judicial Admissions)

      Appellant argues the trial court erroneously granted Synergy leave to file its

Second Motion to Supplement Summary Judgment (the “Second Supplement”). (CR

1453-54).     Summary judgment evidence may be filed late, with leave of court.


                                           15
Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996). A ruling on a motion

for leave to file a late summary judgment evidence is reviewed for an abuse of discretion.

Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 686 (Tex. 2002). The trial

court did not abuse its discretion.

           Appellant neglects to mention the “content” of the Second Supplement, which

consists entirely of:

               • Appellant’s responses to requests for admissions, which Appellant served
                 on Synergy after the May 12, 2014 deadline for summary judgment
                 motions under the Scheduling Order (CR 763-67);13

               • A request that the Court take judicial notice of Appellant’s Motion for
                 Reconsideration, which was filed on May 20, 201414 (CR 757); and

               • A brief argument explaining why these judicial admissions were relevant to
                 Synergy’s pending summary judgment grounds (CR 756-62).

           Appellant’s responses to admissions are judicial admissions, as are its pleadings.

Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001) (statements

in pleadings); Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989) (responses to requests

for admissions). A judicial admission conclusively establishes the admitted fact. TEX. R.

CIV. P. 198.3. A judicial admission “not only relieves [an] adversary from making proof

of the fact admitted but also bars the party himself from disputing it.” Horizon/CMS

Healthcare Corp. v. Auld, 34 S.W.3d 887, 905 (Tex. 2000).




13
     The Second Supplement with Appellant’s admissions is contained in the Appendix as Exhibit B.
14
  The Motion for Reconsideration sought reconsideration of the trial court’s decision not to hold Pierce in
contempt. (CR 486-539) The reason for Synergy’s supplementation was Appellant’s admission that
Pierce had not worked in all counties covered by the Covenant. (CR 487).


                                                         16
          By the Second Supplement, Synergy requested leave to supplement the pending

summary judgment motion with Appellant’s judicial admissions, which were made after

Synergy filed its motion. (CR 757). Other than stating that the Second Supplement was

filed only fourteen days prior to the summary judgment submission date, Appellant did

not identify any surprise or prejudice that would result from admission of its judicial

admissions. (CR 781-84). In its briefing to this Court, Appellant conclusorily asserts that

it was prejudiced by the trial court’s consideration of the Second Supplement on only

fourteen days’ notice but fails to state how or why.15

          Appellant’s judicial admissions cannot be a surprise to Appellant. Nor is allowing

judicial admissions into evidence prejudicial because it is an undisputed fact. In fact, the

admission of such evidence furthers the purpose of summary judgment — elimination of

patently unmeritorious claims and defenses. Cook v. Nacogdoches Anesthesia Grp.,

L.L.P., 167 S.W.3d 476, 480 (Tex. App.—Tyler 2005, no pet.). Therefore, the trial court

did not abuse its discretion in considering Appellant’s judicial admissions.

          Appellant complains that Synergy added additional briefing by the Second

Supplement, but fails to identify what is objectionable. Synergy did not raise any new

summary grounds in its Second Supplement. (CR 756-62). Rather, Synergy showed the

Court, by reference to sections, how Appellant’s judicial admissions were relevant to the

pending summary judgment motion grounds.

      •   In Section III(B)(4) of Synergy’s Motion for Summary
          Judgment, Synergy raised and establishes that Appellant’s
          purported customer list is neither secret nor an interest

15
     Appellant’s Br. pp. 28-29.


                                              17
          worthy of protection. Appellant admits this fact by filing
          of public record a list of each surgeon and each hospital
          that Appellant claims Pierce worked with while an employee
          of Appellant.   This list is attached to Appellant’s Motion
          for Reconsideration.      Such filing, even if not an
          admission, vitiates any right to protection; and

      •   In Section III(C) of Synergy’s Motion for Summary Judgment,
          Synergy raises and establishes that Josh Pierce’s covenant
          not   to  compete   is  not   valid  because   it  contains
          unreasonable restrictions.

      Synergy then went on to state:

          In APPELLANT’S RESPONSE TO SYNERGY IOM’S REQUEST FOR ADMISSIONS,
          Appellant judicially admits that Pierce never worked
          for Appellant in Ellis County, Hood County, Johnson
          County, Kaufman County, and Parker County.16           This is
          five (5) of the eleven (11) counties covered by the
          covenant.     In other words, almost ½ of the counties
          enumerated in the covenant are counties in which
          Pierce never worked for Appellant.

          These admissions conclusively establish17 that Pierce’s
          covenant contains unreasonable restrictions.     Haass,
          818 S.W.2d at 387; Evan's World Travel, 978 S.W.2d at
          232-33; Butler, 51 S.W.3d at 792.

          As a consequence, the covenant is not valid and
          enforceable and cannot be the basis of a tortious
          interference claim. Juliette Fowler Homes, 793 S.W.2d
          at 665; Travel Masters, 827 S.W.2d at 833; NCH Corp.,
          757 F.2d at 1543–1544; Lazer Spot, 387 S.W.3d at 49;
          Flynn Bros., Inc. v. First Med. Associates, 715 S.W.2d
          at 785. Therefore, Synergy is entitled to judgment on
          the tortious interference claim asserted by Appellant.

          . . . .

          In Section III(E) of Synergy’s Motion for Summary
          Judgment, Synergy raises Neurodiagnostic’s lack of
          damages as a summary judgment ground.



16
     See Responses 7-11.
17
     TEX. R. CIV. P. 198.3.


                                         18
          APPELLANT’S RESPONSE TO SYNERGY IOM’S REQUEST FOR ADMISSIONS
          conclusively     establishes    that  Pierce’s    covenant
          contains unreasonable restrictions.

          Assuming   (arguendo)   the   other  predicates   as  to
          formation   of  a   valid   non-compete   and  competent
          evidence of reasonableness, Appellant’s best case
          scenario is that the Court reform the limitations
          contained in the covenant.       See TEX. BUS. COMM. CODE
          §15.51(c).

          . . . .

          Appellant is, therefore, precluded from obtaining the
          very damages it now seeks from Synergy.       Because
          Appellant is foreclosed, as a matter of law, from
          obtaining damages, the tortious interference claim
          fails as a matter of law.

(CR 759-61).

          Because the Second Supplement only sought leave for the trial court to consider

Appellant’s judicial admissions and informed the trial court why such supplementation

was appropriate, the trial court did not abuse its discretion by granting leave and

considering Appellant’s admissions.

                         2. Hearing Transcripts Were Properly Admitted

          Synergy tendered excerpts from the temporary injunction hearing and the

contempt hearing (Appendix Tabs 5 and 6 respectively). (CR 201-13, 215-23). Appellant

contends these excerpts were unauthenticated.18       Appellant further claims that it is

unclear who was speaking on the cited pages; thus, consideration of such testimony was

improper.19



18
     Appellant’s Br. pp. 31-32.
19
     Appellant’s Br. p. 31.


                                              19
        Equally available transcripts, such as these, do not require authentication via a

reporter's certification or an affidavit. See McConathy v. McConathy, 869 S.W.2d 341,

342 (Tex. 1994) (stating “[a]ll parties have ready access to depositions taken in a cause,

and thus excerpts submitted with a motion for summary judgment may be easily verified

as to their accuracy. Authentication is not necessary and is not required under the present

rules.”). The same is true for these hearing excerpts. Besides, each of the excerpts

included the reporter's certification. (CR 213, 223).

        As to Appellant’s complaint that it is unclear “who” is testifying on the cited

pages, Appellant need only look to its copy of the transcripts to identify the speaker. Id.

at 342. Moreover, the excerpts contained everything needed to independently determine

who was testifying. Each excerpt included, among other things, a table of contents

identifying “who” is testifying on the various pages. (CR 201-05, 215-18). The trial

court, therefore, did not abuse it discretion in overruling Appellant’s evidentiary

objections.

     D. SYNERGY COULD NOT INTERFERE WITH THE COVENANT BECAUSE IT IS NOT
             ANCILLARY TO AN OTHERWISE ENFORCEABLE AGREEMENT
                           (APPELLANT’S ISSUE #4B)

        When, as here, a covenant not to compete is an unreasonable restraint of trade; it

cannot form the basis of an action for tortious interference. Juliette Fowler Homes, Inc.

v. Welch Assocs., Inc., 793 S.W.2d 660, 663, 665 (Tex. 1990),20 superseded on other

grounds by statute as stated in Coinmach Corp. v. Aspenwood Apartment Corp., 417
20
  Although some cases predate the 1989 adoption of the Act, courts should look to pre-Act cases for
guidance in applying an interpreting the Act. Haass, 818 S.W.2d at 388; John R. Ray & Sons, Inc. v.
Stroman, 923 S.W.2d 80, 84-85 (Tex. App.—Houston [14th Dist.] 1996, writ denied). This decision is
highlighted and contained in the Appendix as Exhibit C.


                                                          20
S.W.3d 909, 923 (Tex. 2013) reh'g denied (Feb. 14, 2014); Travel Masters, Inc. v. Star

Tours, Inc., 827 S.W.2d S.W.2d 830, 833 (Tex. 1991);21 NCH Corp. v. Share Corp., 757

F.2d 1540, 1543–1544 (5th Cir.1985); Lazer Spot, Inc. v. Hiring Partners, Inc., 387

S.W.3d 40, 49 (Tex. App.—Texarkana 2012, pet. denied).22                        Here, the trial court

correctly determined that the Covenant was an unenforceable restraint of trade and

properly granted summary judgment to Synergy.

           A covenant not to compete is presumed illegal. TEX. BUS. & COMM. CODE

'15.05. The Act creates a safe harbor allowing enforcement; provided, the covenant

strictly complies with the Act. Travel Masters, 827 S.W.2d 832; Miller Paper Co. v.

Roberts Paper Co., 901 S.W.2d 593, 599 (Tex. App.—Amarillo 1995, no writ); Zep Mfg.

Co. v. Harthcock, 824 S.W.2d 654, 660 (Tex. App.—Dallas 1992, no writ). Appellant

has the burden to establish compliance with the Act. TEX. BUS. & COMM. CODE ANN.

'15.51(b).

           Two initial inquiries are made when assessing compliance with Act: (i) is there an

“otherwise enforceable agreement,” and (ii) is the covenant “ancillary to or part of” that

agreement at the time the otherwise enforceable agreement was made. TEX. BUS. &

COMM. CODE ANN. ' 15.50; Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289

S.W.3d 844, 849 (Tex. 2009); Evan's World Travel, Inc. v. Adams, 978 S.W.2d 225, 230-

31 (Tex. App.—Texarkana 1998, no pet.).




21
     This decision is highlighted and contained in the Appendix as Exhibit D.
22
     This decision is highlighted and contained in the Appendix as Exhibit E.


                                                           21
       In order to be “ancillary” the:

            a. consideration given by the employer in the otherwise enforceable
               agreement must be reasonably related to an interest worthy of protection;
               and

            b. covenant must be designed to enforce the employee's return consideration
               (e.g., a promise) in the otherwise enforceable agreement.

See, e.g., Marsh USA Inc. v. Cook, 354 S.W.3d 764, 773 (Tex. 2011); Alex Sheshunoff

Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 649 (Tex. 2006).

       Synergy challenged Appellant’s lack of evidence of confidential or proprietary

information or any other interest worthy of protection (CR 147-60) because Pierce did

not use confidential information in the performance of his duties and IOM technicians are

board certified such that their duties are standardized throughout the industry. (CR 183-

84, 457). Appellant failed to bring forward competent evidence to satisfy its burden.

       As discussed in more detail below, the only “consideration” that Appellant

identified in discovery as having provided to Pierce as part of an “otherwise enforceable

agreement” are: (i) training; (ii) customer information, including surgeon preferences;

(iii) pricing; and (iv) technique. (CR 241, 263, 272, 275-77).      Appellant would not

identify or describe, even generally, any technique it believed to be a protectable (CR

275-77) or what was confidential as to the delivery of its service. (CR 368-69).

Appellant only generically identified the other categories, but provided no details or

evidence. This is due to the fact that this is standardized procedure throughout the

industry.




                                           22
                                               1. Training

                 (a). No Evidence that Training or Advancement of Funds
                          for Training Was Worthy of Protection

        Synergy specifically challenged that the training Pierce received or Appellant’s

advancement of funds for that training was an interest worthy of protection by a

noncompete. (CR 291, 147-60). Without such proof, the provision of, or payment for,

training was not ancillary to the Covenant.

        Appellant responded by merely claiming that it had paid the cost of Pierce’s

certification training23 (CR 822-23, 834, 835) and that such “training directly related to

the type of work that [Pierce] did for [Appellant] and now does for Synergy.” (CR 825-

26, 836).     Appellant’s response would require this Court to hold that any training

whatsoever, if it is job related, is automatically worthy of protection. This is incorrect for

many reasons.

        First, mere advancement of funds is not an interest worthy of protection.

Sheshunoff, 209 S.W.3d at 650 (recognizing payment of money is not a protectable

interest). Second, Appellant’s contention that all work-related training is sufficient is

incorrect. See Daytona Grp. of Tex., Inc. v. Smith, 800 S.W.2d 285, 290 (Tex. App.—

Corpus Christi 1990, writ denied) (holding publicly available training is not a protectable

interest); Hospital Consultants, Inc. v. Potyka, 531 S.W.2d 657, 662 (Tex. Civ. App.—

San Antonio 1975, writ ref'd n.r.e.) (training given to emergency room physicians was



23
  It is a misstatement to say Appellant paid for training. Pierce re-paid for cost of training under the
precise terms set forth in the employment agreement. (CR 183-86).


                                                     23
not a protectable interest because it belongs to the employee); Evan's World Travel, 978

S.W.2d at 231 (training given to employee was not worthy of protection).

       Appellant’s response failed to connect the dots by failing to provide evidence

establishing whether Pierce’s certification training was, in fact, an interest worthy of

protection. There was nothing showing that what Pierce did or learned was different than

what is done throughout the IOM industry.           Appellant came forth with nothing

identifying any curriculum, content, or information that Pierce learned in that training

that was unique to Appellant, confidential, or that would be protectable for any reason

whatsoever. Because Appellant failed to come forward with evidence that the training

provided to Pierce was worthy of protection by a noncompetition agreement, Appellant

failed to establish the agreement regarding training was ancillary to the Covenant.

                (b). Training and Advancement of Funds for Training
                      Was NOT an Interest Worthy of Protection

       In comparison, the training was conclusively shown not to be an interest worthy of

protection. The mere fact “[t]hat a former employee was trained by the employer is not a

ground for enforcing a restrictive covenant not to compete, even if the training was

complex and extensive.” Custom Drapery Co. v. Hardwick, 531 S.W.2d 160, 165 (Tex.

Civ. App.—Houston [1st Dist.] 1975, no writ); see Grace v. Orkin Exterminating Co., 255

S.W.2d 279, 285 (Tex. Civ. App.—Beaumont 1953, writ ref'd n.r.e.); Lazer Spot, 387

S.W.3d at 46. While Appellant suggests that there is some distinction between the cited

cases and this case (CR 837), none exists. Just as in Custom Drapery and Grace,




                                            24
Appellant’s promise to train is not identified in the employment agreement as “quid pro

quo” for the Covenant. (CR 176-90).

       Synergy acknowledges that “specialized” training involving a company’s

proprietary information may be worthy of protection; however, the facts necessary to

warrant protection do not exist in this case. This is board certification training that is

taught, tested, and applied by all IOM technicians throughout the IOM industry.

Appellant admits there is nothing confidential or proprietary about the training that Pierce

received and it is available in the open market.

              Q.     And I believe you answered a question
                     that   Mr.  Hampton   asked.     There's
                     nothing about the training --
              A.     No.
              Q.     -- that's confidential?
              A.     No.
              Q.     It's all in the public domain?
              A.     Correct.
              Q.     It just costs you time and money, right?
              A.     Correct.

(CR 263).

       Indeed, Appellant unequivocally testified that it did not care about protecting the

educational training that Pierce received.

              Q.     Let me see if I can ask it again. Your
                     concern is that Mr. Pierce was trained
                     and then worked in an environment where
                     he gained certain specialized knowledge
                     and expertise.
              A.     Um-hum.

              Q.     You've got to say yes or no.
              A.     Yes.

              Q.     Okay.   And then because of that, he
                     should be bound by the covenant not to


                                             25
                           compete that he signed prior to being
                           trained or receiving any knowledge,
                           specialized knowledge.
                   A.      Not the education, not –

                   Q.      You don't            care        about   the   education
                           part.
                   A.      Correct.

(CR 244). Because the training in this case is “in the public domain” (and is admittedly

not an interest Appellant even seeks to protect) it is not an interest worthy of protection.

See, e.g., Daytona Grp., 800 S.W.2d at 290. Consequently, the training Pierce received

cannot support the Covenant.

           Appellant’s advancement of monies does not transform training, which does not

warrant protection, into a protectable interest. Sheshunoff, 209 S.W.3d at 650

(recognizing payment of money is not a protectable interest).                  More importantly,

Appellant’s advancement of funds for training has been fully repaid, precisely as

contemplated in the employment agreement. Appellant allowed Pierce to repay the

advanced funds by working for 48 months after becoming board eligible. (CR 183-86).

Pierce became board eligible in 2006 and worked for Appellant for more than 48 months

after that time. (CR 843,24 173). Appellant was fully repaid its advancement of training

costs, precisely as it had agreed. (CR 183-86). Pierce, therefore, effectively paid for his

own training.

           Appellant also argues that Pierce received and Appellant paid for continuing

education and on-the-job training (CR 823, 843, 857); however, the employment

agreement does not mention continuing education or on-the-job training. (CR 183-84).

24
     Also judicially admitted Appellant’s Br. p. 51.


                                                       26
The employment agreement only refers to training to “become board eligible,” to

“become registered as an REPT,” and to “become registered as a CNIM,” there is no

mention of any continuing education or training after “eligibility” or “registration.” (CR

183-86). There are also no facts identifying or detailing what was encompassed by this

“on-the-job-training” and whether it was worthy of protection. (CR 823, 843, 857).

Therefore, regardless whether Pierce received or Appellant paid for continuing education,

this was not part of an otherwise enforceable agreement ancillary to the Covenant at the

time it was made. Because the evidence conclusively establishes that Pierce’s training

was not an interest worthy of protection and further establishes that Pierce repaid the cost

of that training as provided for in the employment agreement, the agreement regarding

training was not ancillary to the Covenant.

                     2. Covenant Not Designed to Enforce Pierce’s
                         Return Promise Regarding Training

                      (a). No Evidence Covenant Was Designed to
                     Enforce Pierce’s Promise Regarding Training

       Appellant has no evidence showing that the Covenant was designed to enforce any

promise by Pierce related to training. (CR 149). When challenged on this precise issue,

Appellant responded:

       The noncompete may have been designed, at least in
       part, to make Pierce live up to his agreement to repay
       Appellant for training expenses if he left employment
       with Appellant within 5 years.

(emphasis added) (CR 838).




                                              27
          Appellant provides no evidentiary citation to support its assertion of a possible

nexus and fails to even unambiguously claim such a nexus exits. Appellant instead

argues that other proprietary information existed to support the Covenant but failed to

identify that information (discussed below). Because Appellant failed to come forward

with evidence that the Covenant was designed to enforce Pierce’s consideration regarding

training, Appellant failed to establish the agreement regarding training was ancillary to

the Covenant.

                                (b). Covenant NOT Designed to
                          Enforce Pierce’s Promise Regarding Training

          In actuality, the evidence conclusively established the Covenant was not designed

to enforce Pierce’s consideration regarding training. Appellant agreed to provide for

Pierce’s training in exchange for either: (i) Pierce’s promise to work for a stated period

of time; or (ii) payment of $5,000, with interest. (CR 183-86).

          Other than repayment under the stated terms, Pierce made no other promise in the

employment agreement related to training. By way of example, there is no prohibition on

Pierce’s use or disclosure of whatever knowledge, education, or techniques he learned

through training. (CR 179-80).25

           Moreover, the repayment obligation establishes that Pierce’s five-year Covenant

was not intended as an enforcement mechanism to insure repayment. For example,

repayment is: (i) immediately due and payable “in cash upon the date of termination” of

Pierce’s employment; (ii) the unpaid debt accrues eight percent (8%) interest; (iii)


25
     There can be no agreement as to the alleged ongoing training because it was never mentioned.


                                                     28
Appellant is entitled to an award of attorney’s fees and costs to collect any unpaid debt;

(iv) applied in specific order. (CR 184-85). While the terms expressly cover how the

repayment obligation is to be repaid, there is no mention of the Covenant. The Covenant

was not designed to enforce either Pierce’s promise to “work off” or repay the cost of his

training. Therefore, the agreement regarding training was not ancillary to the Covenant.

             3. Customer Information Not an Interest Worthy of Protection

       As noted previously, Appellant argued that proprietary information, other than

training, supported the Covenant. When asked to identify the confidential information

provided to Pierce in any detail, Appellant refused to answer most questions (CR 272-77,

246-47, 311, 368-69) and would only generically state that its customer list, surgeon

preferences, and pricing structure were proprietary. (CR 241, 263, 272, 275-77).26

Appellant never identified any allegedly confidential information with any specificity.

                     (a). No Evidence that Customer Information Was
                    Worthy of Protection or Reasonably Related to One

       With regard to all allegedly confidential customer information, Synergy

specifically challenged that there was no evidence that:                  (i) such information is

Appellant’s trade secret; (ii) such information is entitled to protection (in other words an

interest worthy of protection); (iii) such information was disclosed to Pierce by

Appellant, as opposed to by the hospital or surgeon; or (iv) that Pierce took any such

information with him, other than by way of his general knowledge and skill. (CR 151).



26
  Appellant suggests that Pierce may have some of its business forms, but admitted these forms were
neither confidential nor secret and were created from reference books (CR 264-65).


                                                  29
       In its summary judgment response, Appellant provided nothing demonstrating that

surgeon preferences was its confidential information, that it had provided Pierce with this

information, or that the information was an interest worthy of protection. (CR 835-37).

In fact, Appellant’s summary judgment response failed to mention surgeon preferences.

Thus, Appellant failed to produce a scintilla of evidence that surgeon preferences was an

interest it was entitled to protect or one even worthy of protection.

       As to pricing, Appellant’s response indicates that “methods of pricing” are

mentioned in the employment agreement (CR 835, 840) and Boldery’s affidavit states

Appellant’s pricing was confidential (CR 857); however, Appellant falls short of any

competent evidence showing that any pricing information given to Pierce was

confidential or worthy of protection by a noncompete covenant. There are no facts,

including “how” or “why” any pricing information in this case should be protected by a

covenant not to compete. (CR 857-59). Appellant’s conclusory statement and subjective

beliefs are not evidence. In re Cauley, 437 S.W.3d 650, 657 (Tex. App.—Tyler 2014,

orig. proceeding); Courtney v. Nibco, Inc., 152 S.W.3d 640, 644 (Tex. App.—Tyler

2004, no pet.). Thus, Appellant failed to produce a scintilla of evidence that its pricing

was an interest worthy of protection.

       Appellant also argues that its customer list/identities are worthy of protection

because customer information has been recognized by courts as protectable. Appellant

relies on a bevy of cases where a temporary injunction issued to protect customer

lists/identities/information; however, issuance of a temporary injunction does not mean




                                             30
the information was, in fact, a trade secret. See, e.g., IAC, Ltd. v. Bell Helicopter Textron,

Inc., 160 S.W .3d 191, 197 (Tex. App. — Fort Worth 2005, no pet.).

       Appellant’s argument presupposes anything falling within the category of

customer information is worthy of protection. (CR 840). The mere fact that courts have

issued temporary injunctions to protect information falling within the category of

customer information does not relieve Appellant from establishing that its customer

information is confidential and worthy of protection in this particular case. Protection

does not automatically attach to such things as a customer list. Numed v. McNutt, 724

S.W.2d 432, 435 (Tex. Civ. App.—Fort Worth 1987, no writ); Allan J. Richardson &

Assocs., Inc. v. Andrews, 718 S.W.2d 833, 837 (Tex. App.—Houston [14th Dist.] 1986,

no writ).

       To rise to a level of an interest worthy of protection, the information must be more

than merely of a kind and character encompassed by the definition. It must be

information that is not publicly available or readily ascertainable by independent

investigation. Numed, 724 S.W.2d at 435; Allan J. Richardson & Assocs., 718 S.W.2d at

837. A customer list must have a substantial element of secrecy for protection. Numed,

724 S.W.2d at 435; Am. Precision Vibrator Co. v. Nat'l Air Vibrator Co., 764 S.W.2d

274, 276 (Tex. App.—Houston [1st Dist.] 1988) as modified, 771 S.W.2d 562 (Tex.

App.—Houston [1st Dist.] 1989, no writ).

       Appellant does nothing more than make conclusory statements as to status of its

customer information. There is no evidence of exactly “what” is confidential/protectable,

much less “how” or “why” any information in this case is protectable. (CR 857-59).


                                             31
Appellant wholly failed to come forward with evidence that any of its customer

information (lists, identities, or anything else) was worthy of protection. In fact, it

refused to do so. When Appellant’s founder, sole owner, and corporate representative,

was asked about the alleged confidentiality of customer information, Ms. Boldery would

not disclose “what” exactly was confidential or “why” such information was confidential.

      Q.     Is there anything confidential about the identity of
             the hospitals or surgical facilities that I might want
             to contact in order to market my new business?
             Certainly you're not claiming that, are you?
      A.     I believe that there is.

      Q.     So, you think there's something confidential about the
             fact that there are surgeries that occur at Harris
             Hospital, Cook's Hospital, Baylor All Saints, HEB,
             Huguley?
      A.     Yes.

      Q.      Okay.  What about the physicians that might perform,
             say a neurosurgeon?    Is there anything confidential
             about the identity of the physicians that are
             neurosurgeons at certain hospitals?
      A.     Yes.

      Q.      (By Mr. McLean) What?
      A.      It's confidential.

             . . . .

      Q.     So are you claiming that the identity of the
             physicians that might use IOM at USMD Fort Worth is
             confidential?
      A.     No.

      Q.     Okay.     And are you claiming                   that the contact
             information for how to contact                   their offices is
             confidential?
      A.     No.

      Q.     Because that's published too.   So, what is it other
             than physician preferences -- I'm not – I understand
             you've said that, like if they like hams for


                                           32
              Christmas, but what is it about identifying a list of
              potential physician customers that is confidential to
              Neurodiagnostics?
       A.     It's confidential.

       Q.     What is?
       A.     The information is confidential.

       Q.     So you're not even going to tell me what it is?
       A.     (Witness shakes head.)

       Q.     All right.
       A.     No.

(CR 272-77, 246-47).

       Appellant’s assertion that its information falls within a recognized category of

potentially protectable information coupled with its bare conclusions that its customer

information is confidential, thus implicitly suggesting worthy of protection, is insufficient

to overcome a no-evidence challenge. Texas Div.-Tranter, Inc. v. Carrozza, 876 S.W.2d

312, 314 (Tex. 1994) (conclusory statements unsupported by facts are insufficient to raise

a fact issue to prevent the granting of summary judgment); In re Cauley, 437 S.W.3d at

657 (same).

       Because Appellant failed to come forward with evidence demonstrating “what”

and “why” surgeon preferences, its customer list/identities, or other customer information

constituted an interest worthy of protection in this case, Appellant failed to raise a

genuine issue of fact. Appellant, therefore, failed to meet its burden of establishing

compliance with the “ancillary” requirements for an enforceable covenant.




                                             33
                    (b). Customer Identities NOT Worthy of Protection

        To the extent Appellant alleges there was some undisclosed “confidentiality”

regarding client identities or other customer information, this was conclusively disproven

by the facts. First, Appellant filed pleadings identifying the hospitals where Pierce

worked and the surgeons with whom Pierce worked. (CR 860-61, 497-98). Once filed,

the information is public record and prevents the identity of these hospitals and surgeons

from being an interest worthy of protection. See Star-Telegram, Inc. v. Walker, 834

S.W.2d 54, 57 (Tex. 1992) (filing documents destroys confidentiality/secrecy).

        Second, as to the surgeons, Appellant does not have a contract with any surgeon

(CR 231-34) and Appellant does not even consider the surgeon to be its client (CR 231-

34). The identity and contact information of non-clients cannot be an interest worthy of

protection.

        Finally, the identity of the surgeons and the hospitals where they practice is

publicly available and readily ascertainable.27 Appellant admits surgeon and hospital

identities are not confidential and available on the doctor’s and hospital’s websites. (CR

272-77, 246-47). It is axiomatic that the hospitals know whether they have contracted

with Appellant. Likewise, the hospital knows the surgeons to whom the hospital has

assigned Appellant as the IOM provider. (CR 235-37). If Appellant’s IOM technician is

present in surgery, the fact Appellant contracts with that hospital is also known by the

surgeon(s) and surgical staff involved in the procedure. The identity of the hospitals and
27
  A defendant can be liable for misappropriation for actually taking protectable information, even though
that information may be readily ascertainable through legitimate means. See, e.g., Sharma v. Vinmar Int'l,
Ltd., 231 S.W.3d 405, 424 (Tex. App.—Houston [14th Dist.] 2007, no pet.). However, there is no
evidence Pierce took anything.


                                                   34
surgeons is also known to the surgical patients, as well as third-party payors who pay

Appellant directly for its services (CR 266-69).

        Additionally, the identity of the surgeons and hospitals was already known to Dr.

Alford and others because Appellant has subcontracted its IOM services to others. (CR

209-10).     Such information was also known to Appellant’s competitors who have

contracts with the same hospitals and provide monitoring for the same surgeons. (CR

241-43, 234).

        Appellant has no protectable interest in this public and readily available

information. Nor does Appellant have a right to prevent dissemination of the identity of

the hospitals with which it contracts or the identity of surgeons with whom it is assigned

to work. (CR 234,28 268-69,29 209-1030). Appellant came forward with nothing to show

an obligation on the part of any surgeon, hospital, or third party payor to maintain the

identity of these surgeons and hospitals confidential. Consequently, there is nothing

preventing Synergy, a hospital, surgeon, or anyone else that knew this information from

disclosing or using such information. These facts conclusively establish that identity of

hospitals and surgeons were not an interest worthy of protection.

       (c). Surgeon Identities/Preferences NOT an Interest Worthy of Protection

        Synergy also established that any information about a surgeon is not worthy of

protection. Here, it is the hospitals that assign cases to Appellant and its competitors.

(CR 235). Assuming, as Appellant suggests, the surgeon requests that a hospital assign a

28
   Admitting no contracts with doctors.
29
   Admitting that it does not have contracts, or many contracts, with third-party providers.
30
   Admitting contract with Synergy ended in December 2012.


                                                     35
specific IOM company to handle a procedure, the surgeon is merely a referral source.31

Professional referral sources are not legitimate proprietary interests that may be protected

by a covenant not to compete. See Philip H. Hunke, D.D.S. v. Wilcox, 815 S.W.2d 855,

858 (Tex. App.—Corpus Christi 1991, writ denied) (holding the fact “flow of new

patients would be diluted whenever a [competitor] is introduced into the group of local

professionals” does not “form a legitimate proprietary interest which may be protected by

a covenant”). Therefore, the identities and other information regarding surgeons are not

interests worthy of protection.

        Additionally, Dr. Alford is free to disclose to Appellant’s competitors or anyone

else for that matter, what he likes and dislikes a monitoring technician do to in surgery.

The same is true for any other surgeon. Any surgeon can freely disclose to Synergy,

Appellant, nurses, or any stranger on the street his/her preferences for monitoring and

testing during a procedure. Accordingly, a surgeon’s preferences are not an interest of

Appellant’s that is worthy of protection via a covenant.

             (d). Appellants’ Pricing NOT an Interest Worthy of Protection

        The final category of information that Appellant claims worthy of protection is its

pricing information; the evidence established otherwise. Appellant admitted that its

pricing has been the same for more than a decade. (CR 270-71). There is nothing secret

about Appellant’s pricing, especially after twelve (12) years.




31
  Neither Pierce nor any of Appellant’s IOM technicians are assigned to any specific doctor or hospital.
(CR 363). Appellant assigned its IOM technicians on an “as available” basis. Thus, Pierce was not the
continual point of contact or even the primary contact between Appellant and any surgeon or hospital.


                                                  36
         First, Appellant’s so-called confidential pricing is dictated to it by others. In many

instances Appellant’s pricing was set by the hospitals or a third-party payor. (CR 209).

Appellant has also been asked to reduce its rates so as to remain competitive with other

IOM providers. (CR 241-43, 238).

         Second, Appellant has also publicly disclosed the amount it receives ($150) by

filing invoices with the trial court. (CR 209-10). This public disclosure prevents the

information from being an interest worthy of protection. See Star-Telegram, 834 S.W.2d

at 57.

         Third, its pricing is also contained in its contracts with the hospitals (CR 234), is

contained in invoices Appellant sends out (CR 195-99), and is known to the hospitals and

third-party payors who set the prices and pay the invoices. (CR 266-67). Dr. Alford’s

former monitoring company, was also aware of Appellant’s pricing. (CR 209-10).

Appellant cannot establish that any hospital, third-party payor, Dr. Alford, or anyone else

has an obligation to maintain Appellant’s pricing confidential.

         The Fort Worth Court of Appeals has addressed the protectability of information

when it is available to a much lesser degree than Appellant’s pricing information. In

Numed the court held:

                Here, the facts do not justify conferring the status of trade
                secret on the data Numed claims requires protection. The
                evidence reflects much of the information Numed wishes to
                protect is not secret. Instead, it is contained in the contracts
                distributed to Numed's customers, which in turn may be
                discovered by anyone.

Numed, 724 S.W.2d at 435.



                                               37
          Appellant’s pricing information has been repeatedly disclosed for twelve (12)

years, without restriction, and can be readily obtained from any number of sources.

Accordingly, Appellant’s pricing information is unworthy of protection. Numed, 724

S.W.2d at 435. Because Appellant’s pricing information is not worthy of protection, it

cannot have a valid enforceable covenant not to compete based thereon.

           (e). Appellant Not Relieved From Establishing Ancillary Requirements

          Appellant argues that it was relieved of establishing the “specific details of [its]

confidential and proprietary information” because it had “sought and received protection

from the [trial court] regarding these details.”32 Assuming this to be correct, Appellant

was not faced with a discovery request, it was faced with a no-evidence summary

judgment.

          A no-evidence motion for summary judgment must be granted if: (i) the moving

party asserts that there is no evidence of one or more specified elements of a claim or

defense on which the adverse party would have the burden of proof at trial; and (ii) the

respondent produces no summary judgment evidence raising a genuine issue of material

fact on those elements. See, e.g., Acad. of Skills & Knowledge, Inc. v. Charter Sch., USA,

Inc., 260 S.W.3d 529, 534 (Tex. App.—Tyler 2008, pet. denied).

          Appellant certainly has the option of not coming forward with evidence in support

its claims, it just cannot refuse to come forward with evidence and also maintain claims

for affirmative relief. As stated by the Texas Supreme Court:



32
     Appellant’s Br. pp. 45-48.


                                               38
           A plaintiff cannot use one hand to seek affirmative
           relief in court and with the other lower an iron
           curtain of silence against otherwise pertinent and
           proper questions which may have a bearing upon his
           right to maintain his action.

National Union Fire Ins. Co. v. Valdez, 863 S.W.2d 458, 461 (Tex. 1993).

           Assuming Appellant has a right to protect the information:

           [it] cannot eat [its] cake and have it too. The
           defendant also has certain rights, one of which is to
           defend [the] lawsuit and to develop an affirmative
           defense which may well destroy the plaintiff's right
           to maintain his action.

Tex. Dep't of Pub. Safety Officers Ass'n v. Denton, 897 S.W.2d 757, 761 (Tex. 1995).

           Appellant argues it only needed to show that it had information falling into

categories of information where other courts had found those categories protectable.33

To put this in perspective, Appellant claims it does not have to identify the information it

claims was supposedly given to Pierce in support of the Covenant or why such

information was worthy of protection. The mere fact Appellant claims its information

falls within a category of information is insufficient to raise a fact issue.34

           In the face of a no-evidence summary judgment, Appellant elected not to come

forward with information necessary to raise a fact issue on its claims. Because Appellant

was unwilling to provide anything more than ipse dixit statements regarding a protectable

interest, Appellant failed to meet its burden of proof under Texas Business Commerce

Code Section 15.51 and required the trial court to grant Synergy judgment. Acad. of

Skills & Knowledge, 260 S.W.3d at 534.

33
     Appellant’s Br. pp. 45-48.
34
     Section III(D)(3)(a), supra.


                                               39
                E. THE COVENANT’S RESTRAINTS ARE UNREASONABLE
                             (APPELLANT ISSUE #4C)

       Assuming (arguendo) some protectable interest is found to exist, the Covenant is,

nonetheless, unenforceable because it is broader than necessary to protect Appellant’s

interests. A covenant is enforceable only to the extent that it contains restraints as to

time, geographic area, and scope, which are no greater than necessary to protect good

will or other business interests of the employer. TEX. BUS. & COMM. CODE §15.50;

Gallagher Healthcare Ins. Services v. Vogelsang, 312 S.W.3d 640, 654 (Tex. App.—

Houston [1st Dist.] 2009, pet. denied); John R. Ray & Sons, Inc. v. Stroman, 923 S.W.2d

80, 85 (Tex. App.—Houston [14th Dist.] 1996, writ denied).

       Restraints are unreasonable if they are broader than necessary to protect the

legitimate interests of the employer. DeSantis v. Wackenhut Corp., 793 S.W.2d 670,

681-82 (Tex. 1990); Stroman, 923 S.W.2d at 84-85. Appellant bears the burden to

establish the reasonableness of each restraint. TEX. BUS. & COMM. CODE ANN. '15.51(b).

                1. No Evidence that 5 Year Covenant Was Reasonable

       Synergy challenged the lack of evidence establishing that a five (5) year restraint

was a reasonable in this case. (CR 162). Appellant could not articulate any basis for a 5-

year restraint. (CR 355-59).

       Appellant cites Stone v. Griffin Communications & Sec. Sys., Inc., 53 S.W.3d 687,

696, no pet.), overruled on other grounds by Am. Fracmaster, Ltd. v. Richardson, 71

S.W.3d 381 (Tex. App.—Tyler 2001, pet. granted, judgment vacated w.r.m.), for the

proposition that a 5-year restraint is per se reasonable. Appellant misreads Stone. Stone



                                           40
recognizes that a 5-year restraint is not per se unreasonable, it does not hold that a 5-year

restraint is per se reasonable. Stone went on to hold that a 5-year restraint reasonable

because the evidence in that particular case established that it would take 5 years for the

protectable information to become outdated.35

        Unlike Stone, Appellant offers no evidence that whatever information Pierce

allegedly received will not become outdated for at least five (5) years. Here, there is no

evidence that any protectable information (assuming it exists) will not be outdated at the

end of the month or that it is not already outdated. Appellant’s reliance on Stone is

misplaced.

                   (a). Advancement Does NOT Make 5 Years Reasonable

        To justify the duration of the Covenant, Appellant returns to its advancement of

$5,000 for Pierce's training claiming this makes the 5-year restraint is reasonable.36

Because, the training is not an interest worthy of protection,37 it is self-evident that a 5-

year restraint is broader than necessary to protect that training.

        Appellant’s assertion is also devoid of authority and provides no logical nexus

between the training/funds and the 5-year restraint. Appellant could have summarily

stated any duration was reasonable, just as it has done with stating 5 years is a reasonable

period. There is simply no nexus between the advance or its amount and the imposition

of a 5-year noncompete.




35
   Appellant’s Br. p. 49.
36
   Appellant’s Br. p. 51.
37
   Section III(D)(1)-(2), supra.


                                              41
       Examination of the repayment arrangement also establishes that a 5-year covenant

is unreasonable. If Pierce did not repay the loan via the workout, he was obligated to

immediately reimburse Appellant $5,000.00, with interest. (CR 183-86). In other words,

if Pierce quit 90 days after becoming board certified he would have had to immediately

repay Appellant the entire sum. The Covenant was in no way tied to his promise to repay

the advancement of training costs. For example, if Pierce had to repay the advancement

the Covenant is not tied to his final payment. With regard to the workout period, it was

48 months, not 60 months. Moreover, the mere fact Pierce elected to “work off” the debt

in lieu of a cash repayment does not justify an additional five (5) year prohibition after

the debt has been satisfied.

               (b). Long Employment Does NOT Equal Long Covenant

       Finally, Appellant argues Pierce was employed for more than 5 years and received

“on the job training” and continuing education during his entire employment. (CR 823,

843, 857). Essentially, Appellant’s argument is that because Pierce remained employed

for a long time, he should be restricted for a long time. The term of the employment was

limited to just 90 days. (CR 176).        Otherwise, Pierce’s employment was at-will.

Appellant offers no authority for its tit-for-tat argument and provides no evidence that 5

years is a reasonable restraint based on the duration of Pierce’s employment.

       With regard to Appellant’s claim of ongoing training, neither the “on-the-job-

training” nor the continuing education is mentioned in the employment agreement. (CR

183-84). And, there are no facts identifying or detailing what this ongoing training

consisted of. (CR 823, 843, 857). Even if this training occurred at the tail end of Pierce’s


                                            42
employment, this supposed ongoing training could have been publicly available or the

information out-of-date within a week. There is simply no evidence that whatever the

ongoing training Pierce might have received makes a 5-year restraint reasonable.

Therefore, accepting (arguendo) Appellant’s claim that ongoing training occurred, this

does not raise a fact issue whether a 5-year restraint is reasonable. Because Appellant

failed to present any evidence of that a 5-year restraint is reasonable, Synergy is entitled

to judgment that the duration of the covenant is unreasonable and, therefore,

unenforceable and incapable of supporting a tortious interference claim.38 Patel v. City of

Everman, 179 S.W.3d 1, 17 (Tex. App.—Tyler 2004, pet. denied).

                         2. Geographic Restraints Were Unreasonable

        Separate from the 5-year restraint, the geographic restrictions are patently

unreasonable. (CR 181-82).39 A covenant not to compete is unenforceable when the



38
  Section III(D), supra.
39
   Appellant suggests that a no-solicitation provision in the employment agreement is enforceable and
provides an alternative to the 11-county covenant. The no-solicitation provision is equally flawed.
Without question, the no-solicitation provision is subject to the Act. Marsh United States, Inc. v. Cook,
354 S.W.3d 764, 768 (Tex. 2011). As a consequence, the absence of an otherwise enforceable agreement
to which the no-solicitation clause is ancillary is fatal to the enforcement of the no-solicitation provision.

       The no-solicitation provision applies to only current and future customers. Appellant admits
surgeons are not its customers. Moreover, whatever the relationship between Dr. Alford and his group
and Appellant, the evidence establishes that was a prior relationship, not a current or future one.

        Additionally, the no-solicitation provision contains no time period whatsoever. (CR 182). It is an
absolute bar to any contact with customers, regardless of activity. (CR 182). And, it applies to all of
Appellant’s customers, not just the ones with whom Pierce worked. (CR 182). Each of these failings
makes the no-solicitation provision unenforceable. Dale v. Hoschar, 2014 Tex. App. LEXIS 8816, *4
(Tex. App.—Dallas 2014, no pet.) (covenant with an indefinite duration is unenforceable as a matter of
law); Haass, 818 S.W.2d at 387-88 (activities have to be ones in which promisor engaged and cannot
“prohibit[] an employee from working with clients that did not exist at the time employee left or with
whom employee had no contact.”).



                                                     43
restraint includes areas that the employee did not work for the former employer. Peat

Marwick Main & Co. v. Haass, 818 S.W.2d 381, 387 (Tex. 1991) (holding “the

restrictive covenant must bear some relation to the activities of the employee. It must not

restrain his activities into a territory into which his former work has not taken him . . . .”);

Cobb v. Caye Publ. Grp., Inc., 322 S.W.3d 780, 784-86 (Tex. App.—Fort Worth 2010,

no pet.) (holding reformation limited to areas where former employee actually worked);

Evan's World Travel, 978 S.W.2d at 232-33 (holding noncompete enforceable only as to

the one county that employee had worked in for former employer); Butler v. Arrow

Mirror & Glass, Inc., 51 S.W.3d 787, 792 (Tex. App.—Houston [1st Dist.] 2001, no pet.)

(reforming covenant to only counties in which the employee had conducted his duties);

Zep Mfg., 824 S.W.2d at 660-61 (holding a covenant unenforceable because it prohibited

an employee from working anywhere, regardless of whether he had serviced the area

during his employment); Webb v. Hartman Newspapers, Inc., 793 S.W.2d 302, 303 (Tex.

App.—Houston [14th Dist.] 1990, no writ) (restricting geographical area of a noncompete

covenant between a newspaper publisher and former employee to the distribution area of

the newspaper for which the employee had worked).




        There is also a diversion of business provision, which applies to all “existing and future
business.” In addition to a lack of an ancillary agreement, it is not limited to business with which Pierce
was involved (Haass, 818 S.W.2d at 387-88) and is too indefinite to be enforced based on restrictive
language of “existing or future business.” See, e.g., Weatherford Oil Tool Co. v. Campbell, 161 Tex. 310,
340 S.W.2d 950, 951-52 (1960) (geographic scope described as “any area where Weatherford Oil Tool
Company, Inc., may be operating or carrying on business” undeterminable and subject to change;
therefore unenforceable); Gomez v. Zamora, 814 S.W.2d 114, 118 (Tex. App.—Corpus Christi 1991, no
writ) (holding restrictive language of “existing marketing area” and a "future marketing area of the
employer begun during employment” to indefinite to be enforced); Hoschar, 2014 Tex. App. LEXIS
8816, at *7.


                                                    44
        The Covenant restrains Pierce from engaging in activities in eleven counties;

however, Appellant did not perform any services in at least one of those counties (CR

259) and Pierce never worked for Appellant in five of those counties. (CR 764-65).

Appellant’s document shows that Pierce actually did not work in six of the eleven

counties. (CR 860). The Covenant’s geographic restraints are, therefore, unreasonable as

matter of law. Haass, 818 S.W.2d at 387; Evan's World Travel, 978 S.W.2d at 232-33;

Butler, 51 S.W.3d at 792; Zep Mfg., 824 S.W.2d at 660-61; Webb. 793 S.W.2d at 303.

        Appellant makes the bare assertion that the “geographic restriction at issue here is

limited to the territory in which the employee worked while in the employment of

NeuroTex.”40 Appellant cites no evidence to support this assertion because none exists.

        Appellant next asserts that the geographic restraints are reasonable because “[i]n

2005, when the Employment Agreement was entered into by the parties, Appellant had

either worked in or had prospective business in the counties included within the covenant

not to compete.” (CR 845)41 Appellant’s assertion misses the mark.

        Whether Appellant had or might have intended to do business in a geographical

locale is not the test for determining the reasonableness of Pierce’s Covenant.42 Cobb,

322 S.W.3d at 784-86; Haass, 818 S.W.2d at 387; Butler, 51 S.W.3d at 792; Evan's

World Travel, 978 S.W.2d at 232-33; Stroman, 923 S.W.2d at 85; Zep Mfg., 824 S.W.2d

at 660-61; Webb. 793 S.W.2d at 303.                 The reasonableness of the restraints is not

measured by where Appellant performed services, but where Pierce provided services for
40
   Appellant’s Br. p. 54.
41
   Appellant’s Br. p. 54.
42
   There is nothing establishing that Appellant’s historical or prospective service areas were known to or
discussed with Pierce at the time the Covenant was signed.


                                                    45
Appellant. Haass, 818 S.W.2d at 387; Butler, 51 S.W.3d at 792; Evan's World Travel,

978 S.W.2d at 232-33; Stroman, 923 S.W.2d at 85; Zep Mfg., 824 S.W.2d at 660-61;

Webb. 793 S.W.2d at 303. Because the 11-county restraint was conclusively established

to be unreasonable, it is unenforceable and incapable of being the basis of a tortious

interference claim.43

                              3. Scope of Activities from Which Pierce is
                                      Prohibited is Unreasonable

           The Covenant is also unenforceable because it unreasonably restrains Pierce’s

future activities. A restrictive covenant must bear some relation to the activities of the

employee at his former employer and must not restrain his activities in a field into which

his former work has not taken him. See, e.g., Haass, 818 S.W.2d at 387.

           The Covenant reads: “Employee shall not, directly or indirectly, become engaged

in any business or activity …, which directly or indirectly competes with the Company’s

business owned or operated by Company or any of Company’s subsidiaries, partners,

associates, or affiliates . . . .” (emphasis added) (CR 182).      On its face, the Covenant

prohibits Pierce from working as a janitor or in any other capacity for anyone that

Appellant might consider to be its competitor.

           The true breadth of this restraint is not even presently determinable. According to

Appellant, Pierce might or might not be prohibited from activities depending on what

Appellant decides to do in in the future.




43
     Section III(D), supra.


                                               46
      Q.   But you did testify that the noncompete would
      restrict him as written from performing clinical
      testing services performed outside the operating room,
      correct?
      A.   Well, it just encompass company business.   There
      was a time when clinical testing was a big part of the
      business.
      Q.   So is that a yes?
      A.   I’m not certain.   How’s that?   I’m not certain,
      because the nature of the business changes from time
      to time.   There could be a time in the future where
      clinical testing is a big part of the business.

(CR 1001).

      As written, the restraint is overly broad because it is based on Appellant’s

changing business, not Pierce’s limited duties provided to Appellant. (CR 173-74). See,

e.g., Weatherford Oil, 340 S.W.2d at 951-52 (restraint described as “any area where

Weatherford Oil Tool Company, Inc., may be operating or carrying on business”

undeterminable and subject to change; therefore unenforceable). Such restrictions are

effectively industry-wide exclusions from the enumerated counties. Id; Stroman, 923

S.W.2d at 85; see Haass, 818 S.W.2d at 387; U.S. Risk Ins. Group, Inc. v. Woods, 399

S.W.3d 295, 301 (Tex. App.—Dallas 2013, no pet.).

      In addition, the restraints apply to hospitals and surgeons with whom Appellant

has no contract or never had contact (CR 256-58). According to Appellant:

      I believe that any competition is in violation of the
      contract because there’s always the potential for
      [NeuroTex] to obtain a physician that either is not
      utilizing the monitoring and might and a hospital that
      has a company that can’t make it, won’t make it, isn’t
      there yet. There always the potential, always.

(CR 256; see also 257-58).




                                          47
           However, Appellant cannot provide services to a hospital without a contract and

privileges at that hospital. (CR 233). Further, Appellant admits that performance of

IOM for a surgeon with whom Appellant has not previously worked is neither directly

nor indirectly competitive with it. (CR 220-21). Moreover, whatever the relationship

between Dr. Alford and his group and Appellant, the evidence establishes that it was not

a current relationship, but a former relationship. Despite the absence of a competitive

threat and despite Appellant’s inability to even service certain facilities, the Covenant

prohibits and Appellant seeks to forbid Pierce from providing any services in his field to

surgeons, with whom Appellant has no relationship, and to hospitals that Appellant

cannot service.

           Without question, the Covenant, as written, forbids activities that are unreasonable

and greater than necessary to protect any interest that Appellant might have. DeSantis,

793 S.W.2d at 681-82; Stroman, 923 S.W.2d at 84-85. Accordingly, Synergy is entitled

to judgment that the Covenant is unenforceable and incapable of being the subject of a

tortious interference claim.44

                    G. TRIAL COURT NOT REQUIRED TO REFORM COVENANT
                                  (APPELLANT ISSUE #4E)

           Appellant next complains that the trial court did not reform the Covenant.

Appellant did not affirmatively seek reformation. Neither Appellant’s first amended

petition nor its second amended petition requested reformation. (CR 48-58, 455-66).




44
     Section III(D), supra.


                                                48
           Appellant consistently maintained throughout the litigation that the Covenant was

enforceable as written. As an alternative allegation in its summary judgment response,

Appellant raised for the first time that reformation of the geographic scope to Pierce’s

actual counties of employment was acceptable. (CR 846). This is insufficient and is a

waiver of any right to reformation. Sentinel Integrity Solutions, Inc. v. Mistras Grp., Inc.,

414 S.W.3d 911, 921 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); see Emergicare

Sys. Corp. v. Bourdon, 942 S.W.2d 201, 204 (Tex. App.—Eastland 1997, no pet);

Daytona Grp., 800 S.W.2d at 290.45

           Assuming a request for reformation is implied, the trial court did not err in failing

to reform the Covenant. First, reformation is only proper where the covenant is necessary

to protect a legitimate business interest. Daytona Grp., 800 S.W.2d at 290. Because the

Covenant was not necessary to protect any legitimate business interest of Appellant,46 the

Covenant could not be reformed. See id.

           Second, when, as here, a covenant involves the promisor's rendition of personal

services, the burden is on Appellant to establish that the covenant meets the requirements

of the Act. TEX. BUS. & COMM. CODE ANN. § 15.51(b); see Stroman, 923 S.W.2d at 85.

Appellant also has the burden to establish what, if any, reformation of the Covenant

would be reasonable and necessary to protect its legitimate business interest(s).

DeSantis, 793 S.W.2d at 685; Stroman, 923 S.W.2d at 85. Unless such a showing is




45
     There is no injunctive relief sought against Synergy.
46
     Section III(D), supra.


                                                       49
made, the covenant cannot be reformed. DeSantis, 793 S.W.2d at 685; Stroman, 923

S.W.2d at 85; Daytona Grp., 800 S.W.2d at 290.

          Appellant offered no alternative duration to the 5-year restraint and provided no

evidence as to the reasonableness of any alternative duration. Appellant also offered no

alternative and no evidence to establish any lesser degree of activity that reasonably

should be restrained.

          Appellant’s conditional and reluctant acceptance to have the trial court enforce the

Covenant in only those counties where Pierce worked during his employment falls far

short of establishing that a county-wide restraint is reasonable. An insurmountable gap

exists between the evidence in the record and the evidence that a county-wide restraint is

reasonable. For example, the evidence establishes that: (i) Pierce’s duties were limited

to that of an IOM technician and IOM only occurs in a surgical facility (CR 172); (ii) the

hospital, not the surgeon, is Appellant’s client (CR 231-37); and (iii) Appellant cannot

work in a surgical facility without contracting with that surgical facility. (CR 231-34).

Other than a desire to eliminate any possible competition,47 Appellant offered nothing to

explain why Pierce’s former work, which only occurs within the 4 walls of a surgical

facility, justified a county-wide restraint. Appellant’s admission that Pierce could work

in Tarrant and Dallas counties under the right set of circumstances (CR 1603) further

erodes any foundation for a county-wide restraint.




47
     (CR 256; see also 257-58).



                                               50
           As another example of this insurmountable gap, Appellant filed a list of hospitals

and surgeons that Pierce worked with over the tenure of his of employment (CR 860), but

nothing indicates the frequency or time period that he worked with any physician or in

any facility. In contrast, the evidence shows that Pierce worked at some hospitals only

once during his employment with Appellant. (CR 921).                Appellant fails to identify

anything showing what Pierce learned or could have learned during a single procedure or

even a few procedures that would allow the trial court to determine a reasonable duration

or geographic restraint for reforming the Covenant.

           As to the time periods involved, the record only allows for speculation wholly

insufficient to reform the Covenant. If the last time Pierce worked in a listed facility or

with a listed physician was 2006, there is no evidence showing the necessity of

restraining Pierce from working with that surgeon or in that facility beginning in 2013,

when he left Appellant’s employ, or for five years thereafter.48

           Here, for example, Pierce had worked in USMD hospital in Fort Worth while an

employee of Appellant, but had not worked in that hospital for possibly up to five years

before leaving Appellant’s employ. (CR 962). Given the fact the record is devoid of the

time periods during which Pierce worked at the enumerated facility and surgeons (CR

860), Appellant failed to provide sufficient evidence of alternative, reasonable duration or

geographic restraints.          Therefore, the trial court did not err by failing to reform the

Covenant.



48
     The same could be said for the most of the years thereafter.


                                                       51
                    H. APPELLANT DID NOT PROVE ELEMENTS OF CLAIM
                                (APPELLANT ISSUE #4D)

                                 1. Damages Foreclosed By Statute

        Appellant erroneously argues that damages are unnecessary and further argues that

Synergy failed to challenge Appellant’s request for injunctive relief; therefore, Appellant

asserts its claim should survive.49             Appellant did not seek injunctive relief against

Synergy. (CR 56-57, 463, 465-66).50 Appellant’s only cause of action against Synergy is

for alleged tortious interference with Pierce’s Covenant. (CR 54-55; 460-62). Damages

are a necessary element of Appellant’s tortious interference claim. See Powell Indus., Inc.

v. Allen, 985 S.W.2d 455, 456 (Tex. 1998).

        Assuming (arguendo) that the Covenant was otherwise valid, Appellant judicially

admitted (CR 756-62; 167-68) that Pierce never worked for Appellant in five of the

eleven of the counties covered by Pierce’s Covenant.51 (CR 764-65). Appellant also

admitted that it had never provided services in at least one of the counties in which Pierce

was prohibiting from working. (CR 259).                     Therefore, even if the Covenant were

otherwise enforceable, it would have to be reformed. Haass, 818 S.W.2d at 387; Evan's

World Travel, 978 S.W.2d at 232-33; Butler, 51 S.W.3d at 792; Zep Mfg., 824 S.W.2d at

660-61; Webb, 793 S.W.2d at 303.




49
   Appellant’s Br. p. 60.
50
   Further, Appellant sought and received return of the injunction bond. (CR 1527-29).
51
   This is not to say that a county-wide restriction is reasonable (assuming a protectable interest exists),
because IOM is a hospital-based practice that occurs within a surgical center.


                                                      52
           Reformation precludes damages and forecloses Appellant’s tortious interference

claim. TEX. BUS. & COMM. CODE § 15.51(c); Juliette Fowler Homes at 663; Zep Mfg.,

824 S.W.2d at 661, 663-64.52

           Appellant wholly fails to address the Act’s foreclosure of damages in this case.

(CR 167-168; 760-61) and did not assign a general point of error as provided for in

Malooly Brothers, Inc. v. Napier, 461 S.W.2d 119, 120 (Tex. 1970). Even if it had, that

is not the end of Appellant’s burden. In circumstances such as these, where a trial court

has potentially granted summary judgment on multiple elements of a claim, Appellant

must present arguments and supporting authority regarding each of the elements

challenged by the motion for summary judgment. McCoy v. Rogers, 240 S.W.3d 267, 272

(Tex. App.—Houston [1st Dist.] 2007, pet. denied). Appellant fails to raise or brief the

foreclosure-of-damages ground raised by Synergy. When, as here, a summary judgment

ground would support the grant of summary judgment, a court of appeals may affirm

regardless of whether the trial court specified the grounds on which it relied. Cincinnati

Life Ins. Co. v. Cates, 927 S.W.2d 623, 625-26 (Tex. 1996); Flory v. Daimler Chrysler

Corp., 2003 Tex. App. LEXIS 10235, at *7-*8 (Tex. App.—Tyler 2003, pet. denied).

Furthermore, the granting of summary judgment must be affirmed where it may have

been based on a ground not specifically challenged by the appellant and where there is no

general assignment of error. Malooly, 461 S.W.2d at 120; Benson v. Gaston, 2014 Tex.

App. LEXIS 2753, at *6 (Tex. App.—Tyler 2014, pet. denied); Flory, 2003 Tex. App.

LEXIS 10235, at *7-*8; Johnston v. Am. Med. Int'l, 36 S.W.3d 572, 576 (Tex. App.—

52
     Appellant’s challenges to the reasonableness of the restraints are dealt with in Section III(E)(2), supra.


                                                        53
Tyler 2000, pet. denied). Because Appellant did not challenge the damage-foreclosure

ground advanced by Synergy and the trial court could have granted summary judgment

on that ground, this Court must affirm summary judgment in favor of Synergy.

               2. No Evidence of Lost Profits (i.e. “Recoverable Damages”)

        Appellant argues that the record contains evidence of its damages because Boldery

testified that Appellant had historical, annual revenues of approximately $400,000 from

IOM procedures where Alford and his group were the attending surgeons.53 (CR 858).

        In addition to not addressing Synergy’s damage-foreclosure ground, Boldery’s

affidavit statement is merely an assertion of revenues, not evidence of recoverable

damages (i.e., lost profits). Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 n.1

(Tex. 1992); Atlas Copco Tools v. Air Power Tool & Hoist, 131 S.W.3d 203, 209 (Tex.

App.—Fort Worth 2004, pet. denied). Evidence of lost revenue that does not include

expenses lacks probative value and constitutes no evidence. Id.54

        Appellant admits it does not know how much of that alleged revenue is profit (CR

336-37) and that Appellant did not actually collect $400,000 in annual revenues from

procedures performed by Alford or his group in 2013 or 2012. (CR337).                              In fact,

Appellant could not state whether it had collected that much in 2011. (CR 337). In other

words, going back 3 years before Pierce left Appellant’s employ, Appellant cannot

provide evidence of its $400,000 revenue allegation.




53
  Appellant’s Br. pp. 10, 59-60; see also (CR 825, 852, 858).
54
  Appellant’s argument also ignores the admission that the relationship giving rise to this historical
revenue ended before Pierce left Appellant’s employee. (CR 208, 211, 277-78).


                                                     54
         Texas law unequivocally requires lost profits to be calculated by measuring lost

net profits, not lost gross profits. See Atlas, 131 S.W.3d at 209 (citing Holt Atherton, 835

S.W.2d at 83 n.1).      Net profits are “what remains in the conduct of business after

deducting from its total receipts all of the expenses incurred in carrying on the business.”

Atlas, 131 S.W.3d at 209. Evidence of lost revenue that does not include expenses lacks

probative value and constitutes no evidence. Id. Boldery’s affidavit statement is merely

an assertion of revenues, not evidence of damages.

                  3. No Evidence of Interference (Appellant Issue #6)

       Appellant also argues it raised fact issues precluding summary judgment on the

element of interference.    With regard to interference, Appellant must establish that

Synergy intentionally interfered with Pierce’s Covenant. See Powell Indus., 985 S.W.2d

at 456 (listing of elements for tortious interference). It failed to raise a genuine issue of

fact of this element.

       Appellant argues that Synergy, via Alford, knew of Pierce’s Covenant prior to

Synergy hiring Pierce. When asked to identify Synergy’s wrongful actions, Appellant

testified:

              Q.       Okay.    What is Neurodiagnostics
              claiming that Synergy has done wrong as it
              relates to the employment agreement that is
              Exhibit 4?
              A.     They maintained his employment even
              though Eric sent a letter informing him of
              the employment agreement.
              Q.   Anything else?
              A.   That sums it up.

(CR 252-53).



                                             55
       Appellant reasons, albeit incorrectly, this creates a fact issue of interference.

Simply hiring an employee or inducing an at-will employee to leave his/her employment

is insufficient to constitute interference. See, e.g., Lazer Spot, 387 S.W.3d at 50. Said

another way, a defendant cannot be liable for inducing a party to do what that party has a

right to do under a contract. ACS Invs., Inc. v. McLaughlin, 943 S.W.2d 426, 431

(Tex.1997); Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 857 (Tex. App.—Houston [14th

Dist.] 2001, pet. denied).

       A tortious interference defendant must be more than a willing participant in a

breach; the defendant must knowingly induce a contracting party to breach its obligations.

See Browning–Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex.1993); John Paul

Mitchell Sys. v. Randalls Food Markets, Inc., 17 S.W.3d 721, 730 (Tex. App.—Austin

2000, pet. denied). Merely entering into a contract with a party with knowledge of that

party's contractual obligations to someone else is not the same as inducing a breach. John

Paul Mitchell Sys., 17 S.W.3d at 731; SJW Prop. Commerce, Inc. v. Sw. Pinnacle

Properties, Inc., 328 S.W.3d 121, 152 (Tex. App.—Corpus Christi 2010, pet. denied);

Baty, 63 S.W.3d at 861; Davis v. HydPro, Inc., 839 S.W.2d 137, 140 (Tex. App.—

Eastland 1992, writ denied); Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 844–45 (Tex.

App.—Houston [1st Dist.] 1987, writ ref'd n.r.e.), cert. dismissed, 485 U.S. 994, 108 S.Ct.

1305, 99 L.Ed.2d 686 (1988); Accord Amigo Broad., LP v. Spanish Broad. Sys., Inc., 521

F.3d 472, 493 (5th Cir. 2008); see also Reyna, 865 S.W.2d at 927.

       Appellant has no proof that Synergy interfered with Pierce’s covenant not to

compete or any other provision of his employment contract. Appellant erroneously claims


                                            56
that there is no dispute that Pierce breached the Covenant.55 This is incorrect. As set

forth above, the Covenant is invalid and unenforceable; therefore, it could not be

breached.

        Further, Pierce primarily worked at Victory Medical Center in Plano, a hospital

that he never worked in while an employee of Appellant (CR 934, 958, 964) with

surgeons with whom he had not previously worked. (CR 173, 962).56                       This is not

competitive with Appellant by its own admission. (CR 220-21). Appellant’s contention

of an undisputed breach, and therefore interference, is incorrect.

        Further, the evidence showed no interference. The plain language of the Covenant

prohibits Pierce from activities in the enumerated counties, where the activities are

directly or indirectly competitive with Plaintiff. (CR 220-21). The evidence conclusively

shows that:

     • Pierce has not worked with surgeon that he worked with while he was employed
       by Plaintiff (CR 172-73);

     • Pierce has worked at Victory Medical Center, a surgical facility that he did not
       work at while in Appellant’s employ (CR 934, 958, 964);

     • Pierce has not solicited surgeons, whether he previously worked with or not, to do
       business with Synergy (CR 173-74);
55
  Appellant’s Br. p. 57.
56
  As a Synergy employee, Pierce worked at USMD hospital on a few occasions, where Dr. Tinley was
the surgeon (CR 957, 961-62). Pierce had not previously worked with Dr. Tinley (CR 497-98, 961-62).
Moreover, Appellant confesses that there is no breach related to working at USMD because there was no
damage.
        Q.      Well, we know based on the Reptrax report that you produced that Josh
        performed IOM monitoring services for Dr. Tinley at USWD Fort Worth. Those are the
        ones reflected on that Reptrax report.
        A.      um-humm, correct.

        Q.     Are you claiming that those are procedures that Neurodiagnostics lost?
        A.     No. (CR 373).


                                                  57
   • Pierce has not solicited hospitals or surgery centers to do business with Synergy
     (CR 173-74) ; and

   • Pierce has not contracted or been involved in contracting with hospitals or surgery
     centers while an employee of Synergy (CR 173-74).

There is no interference under these facts because Appellant admits that when an

intraoperative monitoring of a surgery occurs with a surgeon that Plaintiff has not worked

with, such is neither directly or indirectly competitive with Plaintiff. (CR 220-21). For

these reasons, Appellant cannot prevail on its tortious interference claim. Consequently,

Synergy is entitled to judgment on the tortious interference claim.

                                        PRAYER

       Appellee Synergy IOM, LLC requests that this Court uphold the trial’s judgment

in all respect and that judgment in favor of Appellee be affirmed.

                                          Respectfully submitted,

                                          WHITAKER CHALK SWINDLE & SCHWARTZ
                                          PLLC

                                          /s/ Brent Shellhorse
                                          William Brent Shellhorse
                                          State Bar No. 24008022
                                          Hunter McLean
                                          State Bar No. 00788026
                                          Patrick H. Rose, IV
                                          State Bar No. 24079244
                                          301 Commerce Street, Ste. 3500
                                          Fort Worth, Texas 76102
                                          (817) 878-0523
                                          (817) 878-0501 (Facsimile)

                                          ATTORNEYS FOR APPELLEE
                                          SYNERGY IOM, LLC



                                            58
                        CERTIFICATE OF COMPLIANCE

Relying on the word count function in the word processing software used to produce this
document (MS Word), I certify that the sections covered by T.R.A.P. 9.4(i)(1) contain
14,812 words.


                                                /s/ Brent Shellhorse
                                                Brent Shellhorse



                            CERTIFICATE OF SERVICE

       This is to certify that on March 9, 2015, a true and correct copy of the foregoing
APPELLEE SYNERGY IOM, LLC’S OPENING BRIEF with attached APPENDIX was delivered
to opposing counsel, listed below, in accordance with the Texas Rules of Civil Procedure.

                                                /s/ Brent Shellhorse
                                                Brent Shellhorse




                                           59
                       APPENDIX TABLE OF CONTENTS


Employment Agreement                                               Exhibit A

Synergy’s Second Motion to Supplement to
                                                                   Exhibit B
Summary Judgment Evidence

Juliette Fowler Homes, Inc. v. Welch Assocs., Inc.,                Exhibit C
793 S.W.2d 660, 663, 665 (Tex. 1990)

Travel Masters, Inc. v. Star Tours, Inc., 827 S.W.2d S.W.2d 830,   Exhibit D
832-833 (Tex. 1991)

Lazer Spot, Inc. v. Hiring Partners, Inc., 387 S.W.3d 40, 49       Exhibit E
(Tex. App.—Texarkana 2012, pet. denied)
EXHIBIT A
                            EMPLOYMENT AGREEMENT
        This Aireentint is made to be effective the lit day of November, 2005, between
vaaa.aaRtaaaaaaia ena. 11'1A a nomad; .r .1 vtavitaavialelvt
AlwikisAmsaimigmusiwo ....pal*wino" sr ...wow
                                                                 ItarArta
                                                r—..*•••••••nrm.lri           Its rrotrutirwl rilart% (if
                                                                    4omp ,r *amp ran.




bushiest at 1322 Old Conk Drive, Tyler, Smith County, Taxis 7370, bezebrafter

                       pLey", and Robert, "
    ---d to se the °Com—
referre                                   - Scsitiu Pierce,
                                                            hart after —
                                                                       vaferred ►to as the

°Employee*

                                                  Tfratill

        The Company agrees to employ the Employes and the Employee hereby accepts

etiployment with the Company for a period or ninety (90) days, beginning on the date

hereof, Foltowing the initial ninety -(90) day period (the "Initial Period", Company

agrees to employ Employee for a period of thirty (30) days with such periods being

lutomatioally renewable on a monthly calendar basis (the ""Continuing Parlor), =leo.

Company or Emplare gives notice of non-renewal. Notwithstanding the foregoing,

Company 'MA retain the right to terminate this Agreement for cause at an earlier the as

set forth in tkda Agreement. Thee Agreement may be terminated by either patty by giving

fourteen (14) days written notice of an intention to not renew              the   employment for the

following calendsx trotith.

                                   U. )tivasonrs Durnta
        employee shall work primarily in Tarrant County, Tens and surrounding counties:,

but may be assigned to plasm as the Company may from time to time direct. The
  rapieleit        porrewrn sttelN. dug.. Ils41 ristaiparty ;thin from rf;aa tit qrae 114u%    iswever,
                          fir

vamovsaarioxecuipc - Pap 1




                                                                                                            Page 176
it is the intention of the parties hereto that the primay duty of Employee shall be to

provide intraopentive teadog monitoring (I0lvf) services for the Company, but may

Include clinical testing marvioes parftxrned outside the °periling room.

                                                  M
                                                  - -. UK&


        The Employee shall devote Employee's entire time and attention to the business of

the Company while employed by Company. As a condition precedent for employment

with Company, Employee shill have no other employment without the Compiny's

expos written (tonna It Is specifically aciatowiedged by both Employee and Company

that the dune. to be pafortned by E4nployee axe of ;Koh a man that the number of hours

to be worked each, weak cannot be literally formes:2 or predicted. Employee agrees to

work that number of hours per week which will accomplhoh the results sought by both

patties herein.

                                        IV. cOmpitssAvoN
        As compound= for employmesat services rendered under 'this Agreenuknt,
TZnioiltirria shell be antltleril bi Twelve                 at the rate r3f Thirty.thnse Thrmasnel *nrt


NO/100 Dollars ($331000.00) per year, payable in bi-weekly equal installment".
                  V     112 A Frfel, raTNAVV. to WO Pt tIlLSA 7U''!2 AV 10
                  T I 1.7.T4 4 ALTA: Ca 6f5 Viii 4 4Lialimri: 60.41‘1711411.1. ,....41.
                                                                                        INV T V CF
                                                                                            4AMA.


       The employment of the 'Employee shall continue only as long as the services

rcaikumvu      41,9   zwaimurro say se4sss,,,kuly ry            IAN   %.A.Juayany, ivserlAs•as v. any   vvaor

provision oontained in this Agreement. The Company shall be the sole judge as to

whether the services of the Ertipkayee are satisfactory, in the event Company determines


gemoveismAGSLIMORr                  Pep 2




                                                                                                                Page 177
the serviode of Employee ars neiatidactory, ringioyment may be terminated by giving

Employee a fourteen (14) day uodce of nob termination ("Notice Fedor) and by paying

Employee to the end of the Nodes Period.

                                    11, MilthiDWIION FOR CAUSE
                                    1


          Company may terminate Employee at &try time for cause.                        CAllit shall be defined

to inoltutte, but is not limited to, my lots of dishonesty, theft, or involvement in any illegal

activity, whether or Ina such involvement rooks in criminal prosecution. Further, cause

Shan be defined to include tardiness, absence &en work, failure to follow the Instructions
nr   wined," nil retrnhanv. II? env Mho. ant at spares frit whirl' r_nrrinahv writi1 he

reasonably expected to take disciplinary actions or terminate an employee. In the event of
verogii.,* NAL   11.04 mouse,   the letrivniewaft
                                     1.44761,j ww
                                                  alsell 1%.* entitled
                                                          4V IMAI.I..••••P
                                                               4
                                                                               Ira nerrtrurstaufinet iiteritopf hga
                                                                               w 40149Welir V.M.14 WOMB .411...6.0.10 forj




Employes prior to the date of teeminetion as provided for in this Agreement =putted pro
*

            *ea rm. A losobl a Mae*     ta. • .lake     MU. 12whvamtn,  AS..111 ILA    *4 .4
441441   uy uo. wuu ma4uummi            cabal,   wow.   &h   m 4AurodeS coon     um 8111.446u tO          no bather

compensation se of the date of termination,
                            Itret   ILYA Sf 0.1"1...werr.vvvvrrir  "11 A aft rstWinblik
                             Y           fi.104•.# VINA.11.11L AA lull AvrnmaurfAx41


          Employee acknowledges that Company is agreeing to spend financial resources to

train Employee puranant to the -Training Agreement below and flare proprietary and

confidential information with Employee so that Employee will be capable of satisfying

Employee's duties under this Agfeeriett. Pear, Company egress to provide Employee

with a fourteen (14) day Dodos of termination of Employ=at, unless Employee is




EMPLOYMINTAcRwatir —Ns 3




                                                                                                                             Page 178
terminated for             CCM         as dracribed earlier in ibis Agreement, in the event Employee's

employment Is tundnated as described earlier in this Agreement.

L          Nen-Disclosure Agreement

           Employee and Company agree that, in the course of Employee's employment with

Co         thy. Employee will acquire confidential customer and patient related informsdon

that could damage C'oomporsy if this information were to corns. into the possession of

requ
-- anany's cermonitors, For this. mason, and for the protection of the Company's

pedants, Employ*, will not, except as authorized in writing by Company, during or at arty
thviik   Oft& Aft serptratinrs fly torntrinaAnn of                         ?ma    A errikerroast     Aleattly nt iintifreettlyo is

communicate, divulge, furnish to, or convey to any other parson, firm, or omporation, any

Wa
      4%&   voik
             GNW
      I•14V MB A
                 A a.P.Mlift
                      alit:rata     flftaanlal 4 rt Mom& NA
                             arm; 444A.ILIMMIPIO 6611eNr4 IAMPRI.1.104.1.
                                                                          w+rJw ',Aga&                    A# °thew
                                                                                                                 ..                    -r
                                                                                                                                       o


codicil:vial Information of Company or any of Company's subsidiaries, putters,
                        a ORILLA..                             arm nil ....a A111104Pial. 11.4a 4.• www      ekta A                 ft4.•
t aleg.14441411f11, $.44. 41.141A+41LWAIp   %.nd 1.01AANIPU 1.17 lo.044trAVVVIO     Mao MAW n4P+Lnn          1.4441, el* inninnen nit *11W




Information Timployes agrees not to disclose inchuies, but is not limited to, the following

           a.          fdendry end irAr—   rurritton regard' g jay put, present or prospective
                       cuitomer or patient of C.:oropany,

           b,          Any financial informs ion of any of Company's business;

           c.          Any list of Company's employees, whether permanent or temporary: and

           d.          Any results of any studies or investigations by Company or Employee
                       conducted daring the term of this Agreement.

           Further, Employee agrees that ell procedures and techniques used by Company or

other concepts created by Company for use in Company's business, whether actually used


11,1101.010/LEn AGIurzwavr- PIM 4
or not, shall bs deemed to bs works made for hire. Employee agrees to assign, and shell

assign to Company, its successors, assigns or nominees all rat, tide and interest

Employee may otherwise have in each copydghtabie WO7A1 In the etverit that Employee

tecorporatee or otherwise uses Eimployee's copyrighted, copyrightable materiel, or

tredernark ntaterial in the perlormance of Employee's duties frir Company, which

procedure or technique was not fret produced or composed by Employee in the

performance of said dude., to the extent Employee Fan the right to do 10, Employee

hereby grams, sari shall grant to Company, a roysity-free, nonexclusive and irrevocable

ilrenta to        raprodualsp translate3. publish use &jut, dispose of such procedures and

techniques, and to authorize others to do so in the conduce of any of Company's
byta4riabsarri.


2,        Proprietary rnitrittatioe of Former Employers

                             -r.
          lareirdravoi. tArowitawnts
                             ••••••••••        .1.11M•             -
                                                         Rrivriltiveat     •
                                                                                     tire miagartewrineristeul
                                                                                     ••••••••    RM. V.irtwormers•
                                                                                                                   vs*Artriptarti (LI



maiden:lel information from any former employer, which includes tU cottfidential
             as ••• .111 AVM. it".10.11ago :awe NI fr. hay  #111 a • I •          g ciPro.rob              et* ts  • *all.. la."
   CrIoasua.
Lolkihn10414116.104A4 Va. aciy 14.11.1614V4 le41101..fri140 $.1.46b 44,
                                                                               liLwow+            tpra
                                                                                        ra vAr.s.444 a► u...14 tem 'mow;     AA.",As«.
                                                                                                                                   w as   Lid
                                                                                                                                                fir a
                                                                                                                                                1.4W




public or to the former employer's competition in the industry. Examples of such

information being customer lies, sal usfiles, personnel -Masi =1.-puter t4e0tdil,

tillirIdid and marketing data, potentisl customers or projects, the former employer's

rowel sting =rice end strategy, the former employee', scheduling and cost budgeting

techniques, end the former employees bidding techniques. Employee flirther represents




IMFLOTMEIC Aoluturorr- Page s
    ►                                                                                          MOPINOMPMS1011171111MPOISIMMINIm11411111.1=11      1
                                                                                                                                                  1




                                                                                                                                         II  I 1

        that Employee's employment with Company is not in violation of any non-competition                                               II  I I

                                                                                                                                         11
        sgreernsed.

        3.       Indiesinifileadost of Company
                                                                                                                                             I     I
                 Employee agrees to indemnity and hold Company harmless from any dispute

        arising out of any erreements or employment of Employee with any former employe/of                                                   I     I
                                                                                                                                             I     I
        .Employee. Employee agrees to pay all attorneys' fees and costa incurred by Coinputy
        iristnsr out & such dlertatt., whether or not _Ruth &wow meat Ilthinion, arbttrettm                                               I        I

        or some other means of dispute resolution, Employee agrees to pay all anceneys' fees and
        rivet   triftrrteA   by   nit/Torii grhino• riot       arrielytlaptitht, whittlhAr   rrr not mirth rthipUt"
                                                                                                                                          l        I
        arise otat cat meritleas or frivolous claims, Employee agrees that ill settlement decisions
        .e
        .. ..
            sgrA
              ....L.up
                     o to& cattkr4 4.0..,u be rude r,,, aimisanyig 401.1. dlie......kleri.                                                i        I
—
        4.      Covenant Not to Compete

                EinplOTae.     aFece, flat the evens= end resuicions set ..4
                                                                          14uth balm ars intended                                        1         I
                                                                                                                                         1
        only as a reasonable protection of ihe Company. For a period of five (5) years after the
        api
         ration       ua
                             .6
                             c. —
                                .L nadonof Zr.u "pputunc, K.21AUee
                                                              Yha  S,                           oih
                                                                                                  t&May 1:14
                                                                                                                                         i
        indirectly, become engaged in any businese or activity in the Texas counties surrounding

        the Della      /   Fott Worth Wimple; which are. Collin, Dallas, Denton, Bilis, Hood,                                            i        1
        Johoson, le.eutman, Parker, Rockwell, Tarrant, and Wise comities located in the State of

        Tests, which directly or indirectly competes with the Company's                       tnIfilleill   owoed or                     i
        operated by Company or any of °armpit:1y* s subeidiarles, patters, associates, or affiliates,
                          •                                                                                                              I
                                                                                                                                         I


        toolOtiszln'AGRUsater - rip s                                                                                                    I
                                                                                                                                         I

                                                                             .                                                           I
                                                                                                                                         1

                                                                                                                                                 Page 181
unities approved by Company in writing before Employee's scceptance of such

employment or oppct-turtity.

          Bmployee shall not have my contact with any of Comport outrun customers or

oontects or solicit potential customs if such potential customers ate or were identified

thrtyittih lead* developed divine the oouras of Employee's rendering of services and duties

under this Agreement.
          Tintployo ithig1 few, AMAr amine the tat:41 sit thiti Acrponiant or fir & mind rwts,

(2) years thereafter, divert or attempt to divert say existing or future businces of

                  awArvni                -mow,
                                                 addles kepi's& Sha larflA   0.14;11.   A trossitrilaftt ;sr   Mr • inioeiNA
                                                                                                                     r. w•



two (2) years thereafter, either directly or indirectly, for himself or any third party, solicit,
              sorkiwn1M Wm. r. w.0 die.A1440104.611"9.111...
1.44.4106411fr LINAIWG,     .011011111W 11111WWWW         IAA
                                                                OA   employ Of toy      Sumliphies$ Ow•aed or op ra
                                                                                        wwi



by Company to terminate his/her employment for the purpose of joining, associating or
          2
       au.444
         '       torayAvpau Wou au; U. a.m..... a...I...J.1k I. dtkitAIL
                                    woman,.      INU4141 kV 'MGM                  wApAvolaumu          it mu    ‘..iwilyauy

that conducts or performs intraoperadve                               MOIlitOtin$                Serii041

          .f the foregoing covenant is not enforceable to the fullest extent provided, it snail

remain enforceoble to the extent provided by law. My breech hereof may be remedied by

any right or remedy available to Company, including, without limitation, the right to

obtain from a court of competent jurisdiction an order of specific performance or

injunctive relief without the necessity of the posting of arty bond or other security.

5.        Soliciting Employees After Termination of Eraproyvatet




IMPLOYMINT AGRI:VONT 1407




                                                                                                                               Page 182
                                                                                                                                                            'Won




          For a period of two C2) years immediately following the termination of the

Employee'a employment with the Company, the Employee shall not, either directly or

indirectly, solicit or offer employment to any than current employee or sub-contractor of

Company, or employ any former employee of Company for a period of one (1) year from

the data of termfnitIon of employment with Company,

6         llotificssion of Futura Enipleyese

          Pot     I   periot of -five (5) years                     ielle"MtAtfly fOnOVeng the tArrninstiesn of this

Agreement and Employee's employment with Company, Employee will inform each new
'NALL...NM *et/ et We PLO
             .7 I
                            kri   ilt;•"11 4   re MONA, AelPrtibiCt
                                                 •••4441/...L.7,            rho WWI 1114111eN"ii 41%
                                                                44.44.1.) VA *WI 1.0
                                                                                                      A
                                                                                                 41L.Ltt.   A1411111111   AT   dore A. fillodklinkilk Olt
                                                                                                                          SF • M... er'Lert."..44




and provide the Company with a copy of this Agreement
er        Eon
                                               laaLijilujr60
le                                 WAS


          Employee reptant* that Employee'. experience and eapebilities are sub that the
                      , b ...1.. 'kg not
ice lavau j la warm aw. animm ,                                   117VW451 ZKIVIAJyall WAILT1 obte.w.14
                                                                                                  -1-2-6- st;p4F
                                                                                                           ---kry----02c.
                                                                                                                       Ant

otherwise earning a living at the same general economic benefit 44 reasonsbly required by

Employee and that Employee haa, prior to the execution of this Agreemeat, reviewed this

Agreement thoroughly with Employee's legal counsel, if needed or desired.

                                               nria-MittirlairitiaTiat2TX
          A3 part of this Agreement, Company and Employee agree that Company is

prepared to expend large SUMS of money and invest considerable amounts of time to train,

educate and qualify Employee to (1) either become board eligible in. preparation of the

evoked potential and intraopentive monitoring boards or to become board eligible to


aststoystzta *moot= - ear a




                                                                                                                                                                   Page 183
provide evoked potential teatime / intreoperative monitoring (ICU) swims, (2) to

become registered u an REPT, and (3) to become registered ae a CNIM. Employee

Lc:bowled** that he has already become boarded falEIG. Employee and Company

agree that the can of the training to be provided to Bmployee is Five Thousand and

NO/100                           01,000,00). otrisidoitioo of thts ooveriintiazd aareemszits contained

herein, Employee and Compeny agree to the followinfp

                                       !Ave eAmorat of Traleing

             Company will advance the cost of training to train, educate end qualify Employee

14M•
  0    lit
       /1       rit :ALM
               1 L. .1141Pii
                               114.161.11.1414.1111. 1.k01116 • A
                               WWWIANIP WV Ila 1.11
                                                                    all nolla     lea            %TAAL   eifi
                                                                                                                 tkiji
                                                                                                                         AVM lea A ..Aala.ti a11
                                                                                                                         111 T 'WW1. yid10‘4144.1161 11.1w



intraoperartve mailtoring boards or to become board eligible to provide evoked potential
h -.rt.... I                               ea am                     am   Ar"ILIN a..,••••Johnos Ion     t......wra        mai       A a.       wenn+
ivituuji miememopop.av ir .tuvo.51/44 41.10 11.1A.FEW Mak V fJ.TIMPI 1,..00/                             10110    LIAQ   c1541100110014         &' i 1,



and (3j to become registered as a CNN, all of which shall hereinafter be referred to as
                                                                                        Aor

       — 1— t—
  I IlliMalige

2.           Service Period

             Company will be unsble to realize the full value of the Training provided to

Employee tinder this Training Agreement unless Employee successfully completes the

Training cleecribed above and continues to provide tervices for the Company for a

ressoosble period of time, Therefore, if Employee resigns, otherwise voluntarily

terminates employment with Company, or is ditchirged for cause pursuant to Section VI

at any time dud:4 the Training period or within foluty-eight (48) months of MI time

employment following Employee's board eligibility date ("Service Period"), Employee


amvittlywithrrAorassurtrr -Psalm 14




                                                                                                                                                             Page 184
                                    •



will repay Company the sum of Five Thousand tad NO/109 Dollars (35,000.00), with

introit at the rate of eight (B) percent par annum from the daze of termiration of

employment with Company, in cash upon the date of termination.

3.         Effect of Employee's More to Repay Training Costs

           Sliould Employee fon to make payment u described above, Compeny is entitled to

costs, attorney fees and related expenses incurred related to Company's csolleotice of the

nutitandint hemmer, together with intsreat thereon, to the extant permitted by applicable

law. Parnerate modes We Tubing Agreerunt will be applied first to the payment of
mentemtaa Af r.enTrnarne iyinnh as ttifirnevis fitaa anti nniti nf nntioneinti if atm Tlia htlitrieg


of the payments will be applied to the principal amount.

-4.        IPOIPaiet   of       T,arwelitreflor. dirlawronaverie ttatatrtarr or nooth of reap' orut

           Company win absorb the cost of the Training provided under this Trail:1w
A 010.111,1164f gm*    11111,
                                T.02111..olo                     le. ,71,0)110
                                                        ‘4,.,bno ....44          rirji.A
                                                                                     olvaly   er,"1.0).ated by Cirr'
                                                                                                                 460P4q




or if Employee dies before the =pled= of the Service Period,

at,
           see rya__ 1A
           ablaWILMMI J.I/L111111 RAM %rum:wawa,Va zhisAyaupumun


           Except as expressly provided herein, this Training Agreement does not alter any of

the redoing terms and coodidone of Ernplo`yee's etivicyyzent VA Company, either

during the period a Training or any subsequent period of employment with Company.

The existence of any claim that Employee may have against Compttly based upon any

averment with Company or upon Employee's employment with Company Mall not serve

as a defense to Company's ertforDOMMIt of this Training Agmement.


StailMOValaNTAGUICMITNT- PAD 10




                                                                                                                          Page 185
6.      Mange of Employees Adams

        If Ensployee's employmeot with Company is terminated for any TO114011 Won the

expiration of the Service Period, Employee agrees to promptly notify Company In malting

with all address changes for Employee.

7.      Acceleradoxt of Unpaid Sabina

        If Employee's onploymeit with Company is terminated and Compton elects to

wen its debts to repayment of the Tratniza costa as provided above. Company may elect

to accelerate the wiped balance of the principal and all wonted interest and declare the
:lima print!, it evilne without notice or dittnantl.

S.      *At VIM" Rittploystent Status
        This Trsining             dikarsperiarit shill not hoi intimrpretwi as a preirnlitp.     by rAmparly to

employ Employee for any length of time. This Training Agreement shall not be
hAtikeemarael
..basworn     sr • 1A1.4
                   elearkepaNr.
                             AfPrrtritrammes sterns A.00,1 an "at
                                          • W•4•114/I a.* woes a.
                                                                               fliqwrrkirrusia


                                             mrscELLAisovs movirsioils
•       1111.01.44.11.   1)....1484416.16
•       .044111   OAP 19M7IPM446 lia14104%




       The parties wee that ft is in their beat interest to resolve any dispute without

               Thereore, any party who La &wire unmet tl-ds Agreetuent must notify the

other party in writing of the nature of the dispute and the damages whoit the party is

seeking. Either party has a right to melte :eascrtable requests for documentation to

support the flow which are alleged by a party. If the parties cannot resolve the dispute

within thirty (30) days after the data of the written document notifying the party of a


11471,011401TAGREMIST -Peo11




                                                                                                                  Page 186
dispute is received by inch party, then the dispute shall be referred to a mutually

agreeable mediator. if the partial cannot agree to a mediator, then either party may file a

lawsuit Once the lawsuit is filed; the parties epee that the party that filed the lawsuit

shell insmallataty :aqua that the Court appoint a mediator and the parties shall attempt

to resolve the dispute through the court oppointed mediator. In such a dispute, the

prevailing party dull be entitled to reasonable attomay's fees mid courts costs of

lideation„ including appellate and collection costa. The oast for mediation shall ba

divided equally between the prides.

2.       .11 nem•_Aaretinunt

          This Agreement and its exhibits, if any, supersedes all other previous agreements
win., moral pr, Ittft perthrtesnei of Atte* nr paynuint of                  eflittitiPsuiehtn   ntttlinad In   ihtm

Agreement, either oral or in writing, between the parties to this Agreement and contains
'hi. *mire ,ittiterrimmno         ttuk ndirfirda intf all of the erwrirtainta aro{       itiewfflonst   botwAAI;

the parties.
          A ...mks,. A MA ale.*
         ell411.1461464AIMMIA


          No charge or. modLtication of this Agreement *hall be valid unless the
                                                                 ..... A
112041111G113,341.M. Al VA                    vs), 4:4140,4700   WM&       s...svaparly. 1-444-41 ?mil =KU V4

given written notice of any amendment of any section of this Agreement.

4.        Execution




1121,171.0 MINT AGIUM1Nr - pap 12




                                                                                                                      Page 187
          This Agreement shall bec•oute effective u to each party when executed by such

party or its representetive, but re patty *ball be entitled to claim a bandit under this

Agreement unlees each parry ar its representative has executed this Agreement,                                                                 II
L         Assignebility and Benefit

          This ARIVICIMISIlt Shan JAVA to the benefit of and be binding upon the parties hereto

and their successors, assists, heite, and legal repreeentstives, provided, however, that this
                                                                                                                                                I
Aunt„ beitta in thefignra of one for personel serviced may not be performed by any

person other than Employee, Imamate:wise approved by Company in writing, and the
r.AnAninztitmo.2 of Pritployetk cketriet hot isiginuati by VeriplOyEse, It it wrpreautly foretold that
                                                                                                                                               I     I
the rishts arising from. the terms and provisions of this Agreement shall be-assignable by
ilia   rig...M.1*MP
          diadir
                       t(t artu naretvft
                   4kg *90 MK,    ini•Virwriep
                                                 "APOPOPII *MN
                                                 ..01 •
                                                                    ft1644•R           ?Ye...44M til
                                                          MePeK 41 ea* IA WY 101.410.10 ..004.11/MA* s
                                                                                                         ,W4 AV
                                                                                                         A.10/.g
                                                                                                                       Alh AO Alio...4Pu
                                                                                                                   VA ,67104,104 ‘01,144.1ky
                                                                                                                                               II
which sumeds to the business of the Company, whether by incorporation, merger, stock
WIN. Via. MAR Al a r"troil
troamymparo, %rummy* 1,4 sawaa
                               MO 1 II Or 11.1 A 1104 ^In ra f Prarevr. wou ven.r.11.111411.1l ARP 1.1. 11•1 SAS A* ilk ra 'a
                                   LARVARAM111400111.        WIAAAPPAA       V44.110041041PW                                 wa
                                                                                                 sa 14404 vi 1.1.1460 114061KAM
                                                                                                                              y
                                                                                                                                doRN
                                                                                                                                     o    f     I
Company, or otherwise.
                    - et— —
Of        JFALIMMICIF ‘4111171141.1TV


          All specific remedies prirrided for in this Agreement shall be cumulative and not

exclusive of each other or of any other remedies available in law or equity,
                                                                                                                                                    I
7.        Governing Law and Veins
                                                                                                                                                     I
          This Agreement shall be cons ed in accordance with the lews of the State of

Texas, entirely independent of the forum in which this Agreement or any part of it may
                                                                                                                                                     I


IMFLOYMPrr evaittacm                      -nip 13                                                                                              I     I




                                                                                                                                                   Page 188
Mme       up for conetruction, interpretation, or eriforcamatn• Vanua for aoY judicial

proceeding under this Agreement dud be in Smith County, Texas.

8.        Waiver

          Any failure, forbearance or delay on the put of either the Employee or Company

to exerciee any *remedy or right under this Agreement shall not operate as a waiver. The

failure of either party to requhe performance of any of the terms, COVellikatto or provisione

of    thia Aaremeat by the other party shall not constitute a waiver of any of the rights

under tail Agreement
9,.       Airitretay.1 Rem end raitt

          If any action at law or in equity is necessary to enforce or interpret any of the rights
ante AIIIIir}arterers
      .r••••••••••••...
                        stnclAr +hi •Idarravianiort the ,--
                                                        rtravallfrict
                                                            •         rrilartv
                                                                 ONION. ....   shall ha
                                                                              •••••••••••, lawrarat/tiAri
                                                                                                •••••••,•••leevrw• tri
                                                                                                                   war        .•••••••re•-••




attorneys few costs, and necessary disbursements in addition to any other relief *which

WV
                      to, vkaeru
          161101.1421.10  id _a is WOOL?  hit      t 1 tlatA
                                   Ye.; %MP 11•1.1110101.011



10.       Readings
          'fir a k..Atm, row w rr.A                       r                                                                    kr aw
           r &ma 10.104,4444114, mows,'         /Mk
                                                               •Ii•Lett la InfrnetailF4 ~La at *Ma A...ar awaits* {.r a.ss
                                                       61W V 1141.4%"all
                                                                            .r.ad V 4041•Mill %It It ONIA 4hbVit41. LI% Via     kiwis.

Included only to nuke it easier to locate the subject matter covered by each provision and

are not to- be used In conamting thia Agroomea rz in aacaitairlinS th6 intentions for thili

Agreement.

11.       Severibtlity

          In the event any one or more of the provisions olntained in tie Agreement shall be

determined by a oourt to be invalid or unenforceable in any respect, the determiner:ion


 1al.° MINT AORZEMENT Pigs 14
gall not affect any odor provision, and this Agreement shell be enforced as if the invalid

provision did not exist

        Bxecuted at Tylsn Smith County, Tens on the data below,


COMPANY                                                      EMPLOYER

Neurodiagnostie Tax, Ltd., a Texas                            Robert "Josh" Pierce
&lilted partnership


                                                                 RA-00,-- )2_
Cathy Boldory                                                Robert iierce
Mager of New miners, UC
neitene Partner


Date              3-41S                                      Date!      7_1 4r"I o.




IV/VOCLUIPMCLUINTWaliwy, Collitiogaosetwaspirpoist, Told% u s.Comspote Memo - auls Itiosislos




VOW 'MINT AORICEMENT- Pao Li




                                                                                                Page 190
EXHIBIT B
                                       Cause No. 13.357.44      ,




NEURODIAGNOSTIC TEX, LL.C.                          §   IN THE DISTRICT COURT
        Plaintiff

VP                                                  o   7m JUDICIAL DISTRICT'
ROBERT *JOSH* PIERCE and
SYNERGY IOM, LLC

       Defendants.                                      SMITH COUNTY, TEXAS
               '    %el. PI , r 0JIM    4 .   IL.       '   ,r11:   ' VC./      j jie


TO THE HONORABLE JUDGE:
       NOW COMES Defendant Synergy TOM LLC (ibringzge) and files this Second
Motion to Supplement Sununary Judgment Evidence (the "Matige). In support
hereof, Synergy would respectfully show the Court as follows:
                                       I. BACKGROUND
2.     Pursuant to the Scheduling Order, the deadline to file Motions for Summary
       Judgment In thia lawsuit is May 12, 2014,
2.     Synergy filed its Motion for Summary Judgment on May •9, 3014.
3.     Attached to Synergy's Motion for Summary Judgment is an Appendix of evidence
       In support of Syneres Motion for Summary Judgment (the ",62aigad),
       Synergy previously sought leave to Supplement Exhibiti of the Appendix to
       substitute and include a new affidavit of Robert "Josh" Pierce to correct a
       procedural defect in the original affidavit.
4.     Synergy makes this second request to supplement the summary judgment record
       based on recent filings by Plaintiff itrEURODIAGNOSTIC TEX, L.L.C.
SYrnatarSzcormatertoN TO SUPP1214111`fr                                                 Pep 1 of
tram



                                                                                                   Page 756
           (mDiggitsuliamitie or *malign and Plaintiffs recent service of discovery
           responses, both of which are relevant to the summary judgment grounds already
           raised by Synergy.
5.         SYNERGY REQUESTS LEAVE TO SUPPLEMENT THE SUMMARY
           JUDGMENT EVIDENCE WITH PLAINTIFF'S RESPONSES TO
           SYNERGY IOM'S REQUEST FOR ADMISSIONS, WHICH ARE
           ATTACHED TO THIS MOTION AS EXHIBIT "8" AND REQUESTING
           THE COURT TO TAKE JUDICIAL NOTICE OF PLAINTIFF'S MOTION
           FOR RECONSIDER.ATION.
6.         SYNERGY REQUESTS A JUNE                 12, 2Q14 _SMOUSSION ,DATE FOR

           THIS LEAVE TO SUPPLEMENT SUMMARY JUDGMENT EVIDENCE
           SO THAT rr BE INCLUDED WITH ITS PREVIOUSLY FILED MOTION
           FOR SUMMARY EVIDENCE.
7,         A request for admission once admitted, deemed or otherwise, is a judicial
           admission, Marshall v. Vise, 767 S.W.ad 699, 700 (Tea. 1989). An admission
           conclusively establishes the admitted fact. TE0c. R Clv. P. 198.3, A judicial
           admission not only relieves (an] adversary from making proof of the fact
           admitted but also bars the party himself from disputing It.'" Horizon/MS
           Healthcare Corp, u, Auld, 34 S.W.3d 887, 905 (Tex, a000).
           Allowing Synergy to supplement its motion with Plaintiffs judicial admissions is
           not a surprise to Plaintiff. Similarly, judicial notice of Plaintiffs own pleadings
           cannot be a surprise to Plaintiff. Nor does the admission of such evidence
           prejudice Plaintiff because Plaintiff is barred from disputing judicial admissions.

SYNNIWY seam MOTION TO surnalawr                                                      Psit2of7
$0133713




                                                                                                 Page 757
9.    This Motion is not sought for the purpose of delay or prejudice.
           II. ARGUMENTS & EVIDENCE BEING SUPPLEMENTED
  A. COVENANT NOT TO COMPETE Is NOT A CotastAcr SUBJECT TO INTERFERENCE
io. The elements of Plaintiff's tortious interference cause of action against Synergy
      require that Plaintiff prove: (1) the existence of a contract subject to interference;
      (2) willful and intentional interference; (3) interference that proximately caused
      damage; and (4) actual damage or loss. See Powell Indus., Inc. v. Allen, 985
      S.W.2d 455,456 (Tex. 1998).
      All contracts are not subject to interference. The first element requires that the
      contract must be a valid contract. Juliette Fowler Homes, Inc. v. Welch Assocs.,
      Inc., 793 S.W.2d 660, 665 (Tex.1990), superseded on other grounds by statute as
      stated in Coinmach Corp. v. Aspen wood Apartment Corp., 417 S.W.3d 909, 923
      (Tex. 2013), retail& denied (Feb. 14, 2014); Seelbach v, Clubb, 7 S.W.3d 749, 757
      (Tex. APP.—Texarkana 1999, pet. denied); Hill v. Heritage Res., Inc., 964 8.W.2d
      89,123 (Tex. App...—E1 Paso 1997, pet. denied).
L2. An illegal contract, such as covenant not to compete that is an unreasonable
      restraint of trade, is illegal and unenforceable on grounds of public policy and
      cannot form the basis of an action for torilous interference, Juliette Fowler
      HOMOS, 793 S.W.2d at 665; Travel Masters, Inc. v. Star MIPS, Inc., 827 S.W.2d
      830, 833 (Tex.1.991.), superseded by statute on other grounds as stated in Alex
      Sheshunoff Mgrnt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 653 n.5 (Texloo6);
      NCH Corp. v. Share Corp.. 757 F.2d 1540, 1543-1544 (5th Cir,1985); Laser Spot,
      Inc. v. Hiring Partners, Inc., 387 S.W.3d 40, 49 (Tex. App.—Texarkana           2012,



SYNERGY SECOND MOTION TO SUPPLEIKENT                                               File 3 o(7
0133723




                                                                                                Page 758
          pet. denied); Flynn Bros., Inc. v. First Med. Associates, 715 8.W.2d 782, 785
          (Tex. App.—Dallas 1986, writ red n.r.e.).
13. In Section III(B)(4) of Synergy's Motion for Summary Judgment, Synergy raised
          and establishes that Plaintiffs purported customer list is neither secret nor an
          interest worthy of protection. Plaintiff admits this fact by fling of public record a
          list of each surgeon and each hospital that Plaintiff claims Pierce worked with
          while an employee of Plaintiff. This list is attached to Plaintiffs Motion for
          Reconsideration. Such filing, even if not an admission, vitiates any right to
          protection.
14, In Section III(C) of Synergy's Motion for Sumnuuy Judgment, Synergy raises and
          establishes that Josh Pierce's covenant not to compete is not valid because it
          contains unreasonable restrictions.
15.       Synergy specifically asserts that the geographic restrictions are unreasonable
          because the restrictions sought to cover counties in which Pierce had never
          worked for Neurodiagnostic. Peat M'artvick Main & Co. v. Hams, 818 S.W.2d
          381,387 (Tex. 1991) (holding "the restrictive covenant must bear 801110 relation to
          the activities of the employee. It must not restrain his activities into a territory
          Into which hia former work has not taken him . . . ."); Evan's World Travel, Inc.
          v. Adams, 978 S.W.ad 225, 232-33 (Tex. App.—Texarkana 1998, no pet) (holding
          that when employee worked glgx in Harrison County, Texas. The restraint from
          doing business anywhere in the state of Texas is clearly an unreasonable
          restriction); Butler v. Arrow Mirror & Glass, Inc., 53. SN.3d 787, 792 (Tex.
          App.—Houston     [Pt   Dist.]   2001,   no pet.) (reforming covenant to include only
      counties in which the employee conducted his duties).
SYNERGY sitcom MOTION TO SUPPLIIKBWE                                                  Ptst 4 of 7
*133723




                                                                                                    Page 759
16, In PLAINTIFF'S RESPONSE TO SYNERGY rows REQuEsr FOR ADMISSIONS, Plaintiff
         Judicially admits that Pierce paver, worked for Plaintiff in Ellis County, Hood
         County, Johnson County, Kaufman County, and Parker County.i This is five (5)
         of the eleven (11) counties covered by the covenant. In other words, almost 1/2 of
         the counties enumerated in the covenant are counties in which Pierce never
         worked for Plaintiff.
17.      These admissions conclusively establish that Pierce's covenant contains
         unreasonable restricdons. Haase, 818 S.W.211 at 387; Evan's World Travel, 978
           N.2d at 232-33; Butler, 31 s.w.3d at 792.
is. As a consequence, the covenant is not valid and enforceable and cannot be the
         basis of a tortious interference claim. Juliette Fowler Homes, 793 S.W.ad at 665;
         Travel Masters, 827 8,W21 at 8331 NCH Corp., 757 F.2d at 1543-1544; Laser
         Spot, 387 S.W.3d at 49; Flynn Bros., Inc. v. First Med. Associates, 715 S.W .2d at
         785. Therefore, Synergy is entitled to judgment on the tortious interference claim
         asserted by Plaintiff.
                     B. Unrosusonable Itegbictions Preclude Damages
19.     U past of its tortious interference claim, Plaintiff must also establish that it
         suffered damages. See Powell Indus., 985 S.W.24 at 456 (listing of elements for
         tordous interference). In Section III(E) of Synergy's Motion for Summary
         Judgment, Synergy raises Neurodiagnostic's lack of damages as a summary
         judgment ground.




 See Response' 7.11.
I TEX. R. C1V. P. 198.3.
SYNERGY SECOND MOTION TO SU117LIDIENT                                             Pegs 6 of 7
0133723




                                                                                                Page 760
20.       PLAINTIFF'S RESPONSE TO SYNERGY TOWS REQUEST POR ADMISSIONS              conclusively
          establishes that Pierce's covenant contains unreasonable restrictions.
21.   Assuming (arguendo) the other predicates as to formation of a valid non.
          compete and competent evidence of reasonableness, Plaintiffs best cue scenario
      Is that the Court reform the limitations contained in the covenant. See Tu. Bus.
      Comm. CODE /15.51(0.
22.       However, reformation automatically and irrevocably precludes Plaintiff from
      recovering damages that might have occurred prior to the reformation,               TEL

          Bus. &    Coil. CODE ANN. §1.5.51(C);   Butler, 51 S.W.3d at 796; Perez v. Texas
          Disposal Systems, Inc., 53 S.W .3d 480, 482-83 (Tex, App.—San Antonio 2001)1
          reversed on other grounds, 80 8.W.3d (2002); see also Haass, 818 5,W.2d at
          388 (noting that Section 15.31(c) expressly provides a court may not award
      damages to the promisee and relief shall be limited to injunctive relief). These
          are the very same damages that Plaintiff must establish to prevail cults claims,
23.       Plaintiff is, therefore, precluded from obtaining the very damages it now seeks
          from Synergy. Because Plaintiff is foreclosed, as a matter of law, from obtaining
          damages, the tortious interference claim fails as a matter of law.
                                           PRAYER
          Synergy requests that this honorable Court grant it leave to supplement its
Motion for Summary Judgment, as set forth above, and also supplement the summary
judgment record by allowing Synergy to file and this Court consider PlAnfrineS
RESPONSES      To   SYNERGY   Tom's RequErr FOR ADMISSIONS, which are attached to this
motion as Exhibit "8" and judicial notice of the Court's file, including Plaintiff's Motion
for Reconsideration.
syrialor sumo MICYTION TO SUPPLEMENT                                                   Par of 7
*133723




                                                                                                  Page 761
                                        Respectfully submitted,

                                        WHITAICER CHALK SWINDLE
                                            AND SCHWARTZ PLLC

                                        By /a/ Brent Shellhorag
                                               Hunter T. McLean
                                               State Bar No. 00788026

                                              WO= Brent Shellhorse
                                              State Bar No. 24008022
                                              hahalihs2111fth1tak:ChadaIM
                                              Patrick H. Rose, W
                                              State Bar No, 24079244
                                              proseewhitakerchalk.com
                                              3500 DR Horton Tower
                                              301 Commerce Street
                                              Fort Worth, Texas 76102
                                              (817) 878.0500
                                              (817) 878-0501 (Facsimile)
                                              ATTORNEYS FOR
                                              SYNERGY IOM, LW



                            ORTIEIUMELQUEEMICE
       This is to certify that on the undersigned date, a true and correct copy of the
foregoing SECOND MOTION TO SUPPLEMENT MOTION FOR SUMMARY JUDGMENT WWI sent to
all parties in accordance with Tani Rule of Civil Procedure 21a on May 29, 2014.


                                        /s/ Brent Shallhorse
                                        W. Brent Shellhorse




IYNUGY SILCOND MOTION TO SUPPULICIINT                                         Per 7 of 7
0133723




                                                                                           Page 762
                                       Cause No, 13.35574
 NEURODIAGNOSTIC TEX, L.L.C.,                              IN THE DISTRICT COURT

                                                           7* JUDICIAL DISTRICT
 ROBERT lour PIERCE end
 SYNERGY IOMI, LLC,                                        SMITH COUNTY, TEXAS
 Defendant.

                      EAM11117.2=KatilaiaMMECIOM
                          RE0IISSEM1AINMAIM2
TO: DEPENDANT, Systaqr 1014, LLC, by Ind through its attorney of record, Petrick Rose ad
      Hunter McLean, Marsha Chalk Swindle & Schwexix, PLLC, 301 Cotranuce Street, Suite
      3500, Port Worth, Toms 7d102.

          COMES NOW Plaintiff, Nemodiegnotivie Tex, LW., Pursuant to Rule 1915 of the Taus
Rules of Civil Procixtuto, and oubroiol its Rovpoose to Defttickut Synergy mu, 1.1.Cs Request for
hal14141,0 CO Plaintiff in the aboreittyled and numbered cause as follows;

                           IZISTRIS=01111.14S12.1211123110101
       Plsintiff OBJECTS to Defendant's Definitions sod Instructions o their endrety to the
meat they attempt to impou szt oblivious ott Plsititiff mud& the Texas Rules of CiVil
PrOCNIUM11 Plaintiff turas to thus Requests in accordance with the TeXili /Wei of Civil
Procedure

                               IZQUAMIQUIDAWISHM
BIZMUSXMUMELSKOKNOAL
&bit that in connection with his employment with Netuodiegaostic, Placa was not rupoceibla for
soliciting oistomers for !sisurodissaosic,

RESEMSM
Denied.

BEILILIZZI1A=31112112011
Admit that in connection with hit employment with Neurodiestioedc, Pierce did not solicit
customers for NetUr04641801,1e.



PKAINT-Dri UPON= TO MUST IMPS 112,QUIIST FORAMOSSION11                             RUM 1 OP 5




                                                                                                    Page 763
natiMint
Denied.

ZBINDEMENLAIMIIMMIELL.3:
Admit that Pierce baa not peovided Wait=Ing SWAM to any =Int customer of Neurodiagnostic
note Pate's empioyasent with Nemodiagnosde terminated.

=Ea=
Denied.
=QUM FOR ADMISSION NCt,

Adtnit that Pierce did not provide Monitoring Services to any physician or hospital on behalf of
Nourodisposdc in Collin County while empkyyed by Neurodiagetosdc.
Blanaini
Denied.

BECanZaZatakafinfatnail
Admit that Pierce did not provide licaltoting Swim to any physician cc hospital on behalf of
Nentodisipostic in MBAs County while employed by Neurodiagnostic.


Denied.
Will1ala7lox=a111112Slak
Admit that Pismo did not provide Monitotins Session to any physician or hospital on behalf of
Neordiainottic in Demon County while employed by Neutodispoetin
SPRONSEk

Denied.

ItEILIZITZCIRAIMMSIDIVELL
Admit that Place dW not provide lionitonns Services to any physician or hospital on behalf of
Neuttlissamen in Ellis County while employed by Neurodiainottic.
=MEM
Admit.

PIAThatilos Mem= TO SWIM IOU%MUM POI ADMISSIONS                                   PAtill 2 07 5




                                                                                                   Page 764
2211211LIZEDIALSOMMLNiaa.
Adroit thet Pierce did not provide Monimuing Services to any physician or hospital on behalf of
Neuediagnostic in Hood County while employed by Neurodiagnostin

FsBankairi
Admit

BEXILINALENLADAMISIMECLI:
Admit that Pierce did not provide Monitoring Swims to any physician at hospital on behalf of
Netudiegnostic injohnion County while employed by Neurodiegnostic.

MEM=
Admit.

RE.MarearMiAniaii‘Milaiik
Admit that Pierce did not provide Monitoring Services to any physician or hospital on behalf of
Netudispostic in Kelantan County while employed by Neurodiagnoetin

naralgit
Admit
   otiar Pfla andaiStatiliSLII
Adroit that Pie= clicl not provide Monitoring Serrieell to any physician or hospital on behalf of
Neurdiartoatic in Parker County whiz employed by Neurodiagnostic.

=ilk=
Admit,

BACHUMEMULAIllaiSIMLIZU21
Admit that Pierce did not provide Monitoting Services to any physician or hospital on behalf of
Netudiliptostic in Rockwell County while employed by Neurodiastiortic,

11112131fiat
Denied.




PLAD7rwes RIMPON511 OaleNSIGY It30$ RRQUIRST FOR ADMISSIONS                        PACKS 3 or 5



                                                                                                    Page 765
nannitaggliatiOZWILLI,
Admit that Pierce did not provide Monitoring Services to any physician or hoepitel on behalf of
Nell:di/Vol* in Tetrint County "Me employed by Neurodispostic.

RESEMER4
Deni•d.
agOVRST FOR ADMISSI0la47 NO. 14;

Admit that Pierce did not provide Monitoring Services to eny physician oz hospital on behalf of
Neurdiegnostic in Wise County while employed by Neurodiagnoric.

=EOM
Denied.

BACILIZI12121LAIMASTIELN.Qat
Admit that since Pierce's employment with Neurcellagrinetic was teeminsted, that Neutdispootic
his been ibis to pmeicis intotopetetive ersonitorlog technicians for all surgical procedures where
plrysiciens or hoopirals requested that NitirOctiognootac provide such service&



                                             Rasp *oddly submitted,

                                                             Duassurreit,L.L.F.

                                                       Z
                                             Etie Deolte-szeiter
                                             Saw BC No. 00796434
                                            Dart S. Caton
                                            Sane Box No 24030438
                                            iistatimatsagileks=
                                            Rob Wright
                                            Stets Ur No 24034184
                                            intsilhanagaillnag=
                                            3010 Broad:ono: Lane
                                            Move Mound, Tarts 75022
                                            (972) 691-3677
                                            (972) 91-36B8— facsimile
                                            Attarw far Nome

FLAMM'S Rill1PONIZ TO Inman /OM Itztwiert POR ADbaSSIONS                            PAO* 4o S

                                                                                                     ••••••



                                                                                                      Page 766
                                alanriCeint OP EOM=
     TWa le to certify that    and =eat copy of the foe/On document bee been sent Carat
Hampton, Thuspext & Anode" Met Ina Mak*4 Moot, WOO Houston Strew, Fast Work
Tams 16102, end Pada Ica and amen Mama, India* Qat Senn& le Schwas. MC, 301
Commerce Stu, Suite 3500, Port Worth, Tams 76101, via emell an ads Ark of boy, 2014.

                                                           • DarisSOCA4*




MOCIAIIIHrtamrrosimok ColevaWarriema 'Aar MixtgAbeami a JAR} Jibs joapikarAilasis


Puattrarrs naPotaz TO ertaRov Kari Paigillin POI linalcoNI                          PAos 3 oi




                                                                                                Page 767
EXHIBIT C
|   | Warning
As of: March 3, 2015 2:11 PM EST

                       Juliette Fowler Homes, Inc. v. Welch Assocs.
                                      Supreme Court of Texas
                                       June 6, 1990, Delivered
                                             No. C-7805

Reporter
793 S.W.2d 660; 1990 Tex. LEXIS 77; 33 Tex. Sup. J. 530
JULIETTE FOWLER HOMES, INC. ET AL. included noncompetition agreements with
Petitioners, v. WELCH ASSOCIATES, INC. respondent. Each petitioner eventually terminated
Respondent                                          the contracts. Subsequent to the termination of the
                                                    contracts, second petitioner’s president was hired
Subsequent History: [**1] Rehearing Overruled by another organization to supervise the
September 12, 1990.                                 fund-raising campaign of first petitioner.
                                                    Respondent brought suit against petitioners,
Prior History: From Dallas County, Eleventh alleging violation of the noncompetition
District.                                           agreement, and tortious interference with a
                                                    noncompetition agreement. The court found the
Core Terms                                          noncompetition agreement between second
                                                    petitioner and respondent to be unenforceable,
noncompetition, termination, tortious interference, because it contained no limitations concerning
covenant, unenforceable, compete, fund-raising, geographical area or scope of activity. As a result,
notice, damages, contractual relationship, there could be no tortious interference with the
tortiously, interfered, public policy, no evidence, contract. Second petitioner, who was found to
cancellation, contracts, grounds, argues, have validly ended its contract with respondent,
unreasonable restraint, enforceability, injunction, did not tortiously interfere with the agreement
campaign, court of appeals, monetary damages, between first petitioner and respondent, because
actual damage, inducing, parties, hired, terms      mere inducement of a party to terminate
                                                    contractual relations did not constitute tortious
Case Summary                                        interference in Texas.

Procedural Posture                                   Outcome
Petitioners appealed from a decision of the Dallas   The judgment in favor of respondents was
County Court, Eleventh District (Texas), which       reversed, because the noncompetition agreement
held in favor of respondent in an action alleging    contained no limitations as to geography or scope
that one petitioner breached a noncompetition        of activity, and unenforceability of a
agreement with respondent and tortiously             noncompetition clause was a valid defense to the
interfered with another noncompetition agreement.    claim of petitioner’s tortious interference.

Overview                                             LexisNexis® Headnotes
Petitioners, separate organizations involved in
fund-raising, each entered into contracts which        Contracts Law > Types of Contracts > Covenants
                               793 S.W.2d 660, *660; 1990 Tex. LEXIS 77, **1



  Labor & Employment Law > ... > Conditions &          contract as written. If the agreement is not
  Terms > Trade Secrets & Unfair Competition >         enforceable in accordance with its terms because
   Noncompetition & Nondisclosure Agreements           either the time or the area stipulated therein is
                                                       unreasonable, the employer may obtain injunctive
HN1 A covenant not to compete is in restraint of
                                                       relief but will not be awarded a money recovery
trade and unenforceable on grounds of public
                                                       for anything the employee may have done prior to
policy unless it is reasonable. A covenant not to
                                                       a judicial declaration of the rights and obligations
compete is not a reasonable restraint of trade
                                                       arising from the contract.
unless it meets each of three criteria: (1) the
covenant not to compete must be ancillary to an          Torts > ... > Commercial Interference > Contracts >
otherwise valid transaction or relationship; (2) the      General Overview
restraint created by the covenant not to compete
                                                         Torts > ... > Contracts > Intentional Interference >
must not be greater than necessary to protect the
                                                          Elements
promisee’s legitimate interest; and (3) the
promisee’s need for the protection afforded by the     HN4 In Texas, the elements of a cause of action
covenant not to compete must not be outweighed         for tortious interference with contractual relations
by either the hardship to the promisor or any          are (1) there was a contract subject to interference,
injury likely to the public. Whether a covenant not    (2) the act of interference was willful and
to compete is a reasonable restraint of trade is a     intentional, (3) such intentional act was a
question of law for the court.                         proximate cause of plaintiffs damage, and (4)
                                                       actual damage or loss occurred.
  Contracts Law > Types of Contracts > Covenants
  Labor & Employment Law > ... > Conditions &            Contracts Law > Procedural Matters > Statute of
  Terms > Trade Secrets & Unfair Competition >           Frauds > General Overview
   Noncompetition & Nondisclosure Agreements             Contracts Law > Types of Contracts > Covenants
HN2 In determining whether the restraint created         Labor & Employment Law > ... > Conditions &
by a covenant not to compete is greater than             Terms > Trade Secrets & Unfair Competition >
necessary to protect the promisee’s legitimate            Noncompetition & Nondisclosure Agreements
interest, the court’s primary focus is whether the       Real Property Law > Brokers > Brokerage
covenant not to compete incorporates reasonable          Agreements
limitations concerning time, geographical area           Real Property Law > Purchase & Sale > Contracts
and scope of activity which do not impose a              of Sale > Formalities
greater restraint than is necessary to protect the
                                                         Torts > ... > Commercial Interference > Contracts >
promisee’s interest.
                                                          General Overview
  Civil Procedure > Remedies > Injunctions >
                                               HN5 Covenants not to compete which are
  Permanent Injunctions
                                               unreasonable restraints of trade and unenforceable
  Labor & Employment Law > ... > Conditions & on grounds of public policy cannot form the basis
  Terms > Trade Secrets & Unfair Competition > of an action for tortious interference.
   Noncompetition & Nondisclosure Agreements
                                                         Contracts Law > Standards of Performance >
HN3 An action for damages resulting from            Discharge & Termination
competition occurring before a reasonable territory
and period have been prescribed by a court of HN6 When a contract provides expressly that it is
competent jurisdiction must stand or fall on the subject to termination upon notice, the general
                                                                                                Page 2 of 10
                                793 S.W.2d 660, *660; 1990 Tex. LEXIS 77, **1



rule is that each party to the contract has the legal      Torts > ... > Commercial Interference > Contracts >
right to cancel the contract.                               General Overview

  Contracts Law > Standards of Performance >         HN10 Merely inducing one of the parties to
  Discharge & Termination                            exercise his right to terminate contractual relations
                                                     after giving the required notice does not
  Torts > Business Torts > Commercial Interference >
   General Overview                                  necessarily constitute tortious interference with
                                                     contract under Texas law.
  Torts > ... > Commercial Interference > Contracts >
   General Overview                                        Civil Procedure > Remedies > Damages > General
                                                           Overview
HN7 Until a contract is terminated, it is valid and
subsisting, and third persons are not free to              Civil Procedure > Remedies > Damages > Punitive
tortiously interfere with it. It would be inconsistent     Damages
to leave contracts that are terminable upon notice         Contracts Law > ... > Damages > Types of
unprotected from tortious interference while               Damages > Punitive Damages
protecting relations that are more or less complete
or definitive.                                             Torts > Remedies > Damages > General Overview
                                                           Torts > ... > Types of Damages > Punitive
  Civil Procedure > ... > Standards of Review >            Damages > General Overview
  Substantial Evidence > General Overview
  Torts > ... > Commercial Interference > Contracts >
                                                         HN11 Recovery of actual damages is a prerequisite
   General Overview                                      to the receipt of exemplary damages.

HN8 In reviewing a no evidence point, the court          Counsel: Bryant, Jr., Mr. Corbet F. Carrington,
considers only the evidence and inferences tending       Coleman, Sloman & Blumenthal, Dallas, Texas,
to support the jury verdict and disregard all            DeHay, Jr., Mr. J. Carlisle, and Blanchard Dallas,
evidence to the contrary. If there is any evidence       Texas, Cook, Mr. Kevin J., DeHay & Blanchard,
of probative value to support the jury’s finding         Dallas, Texas, for petitioners.
that defendants tortiously interfered with a
contract, the court must overrule the no evidence        Zukowski, Mr. John M. Campbell, Athey,
point.                                                   Zukowski & Bresenhan, Houston, Texas, for
                                                         respondent.
  Civil Procedure > ... > Standards of Review >
  Substantial Evidence > General Overview                Judges: Jack Hightower, Justice.
HN9 No evidence points of error must and may
                                                         Opinion by: HIGHTOWER
only be sustained when the record discloses: (1) a
complete absence of evidence of a vital fact; (2)
the court is barred by rules of law or of evidence       Opinion
from giving weight to the only evidence offered to
                                                         [*661] OPINION
prove a vital fact; (3) the evidence offered to
prove a vital fact is no more than a mere scintilla;     HIGHTOWER, Justice.
and (4) the evidence established conclusively the
opposite of the vital fact.                              This breach of contract and tortious interference
                                                         with contractual relations case involves issues
  Contracts Law > Standards of Performance >             concerning the enforceability of a covenant not to
  Discharge & Termination                                compete. The trial court rendered judgment in
                                                                                                  Page 3 of 10
                                         793 S.W.2d 660, *661; 1990 Tex. LEXIS 77, **1



favor of Welch Associates Inc. and against Juliette                   agencies [**3] is Fowler. John Butler was assigned
Fowler Homes, Inc. et al. The court of appeals                        to work directly with Fowler, and supervise
affirmed the judgment of the trial court. 1 We                        Fowler’s fund-raising campaign.
reverse the judgment of the court of appeals and
                                                                      Welch filed this action against Fowler, alleging
render judgment that Welch Associates, Inc. take
                                                                      breach of the Fowler-Welch contract, and further
nothing.
                                                                      alleging tortious interference with the
 [**2] Juliette Fowler Homes, Inc. (Fowler) is a                      noncompetition clause 3 in the contract between
charitable nonprofit organization, an affiliate of                    Welch and Butler Companies by inducing John
the Disciples of Christ Church. In 1981, Fowler                       Butler to accept the Director of Development
entered into a fund-raising contract (Fowler-Welch                    position with NBA. Welch also named John
contract) with Welch Associates, Inc. (Welch),                        Butler and Butler Companies as defendants,
whereby Welch agreed to conduct a fund-raising                        seeking damages for breach of the noncompetition
campaign for the benefit of Fowler. Welch                             clause of the Butler Companies-Welch contract
contracted with John W. Butler Companies, Inc.                        and for tortious interference with Welch’s
(Butler Companies), to help execute the Fowler                        contractual relations with Fowler.
fund-raising campaign. The contract between
Welch and Butler Companies (Butler                                     [**4] The jury found that John Butler breached
Companies-Welch contract) contained a covenant                        the noncompetition clause of Butler Companies’
not to compete which bound Butler Companies to                        contract with Welch and that John Butler and
not ″enter into any form of contract for services″                    Butler Companies tortiously interfered with
with any of Welch’s clients for a period of two                       Welch’s contractual relationship with Fowler.
years after the conclusion of the Butler                              Furthermore, the jury found that Fowler tortiously
Companies-Welch contract. Eventually, Fowler                          interfered with Welch’s contractual relationship
became dissatisfied with Welch’s fund-raising                         with Butler Companies. A judgment for damages
results, and Welch and Butler Companies became                        was rendered in favor of Welch against Fowler,
dissatisfied with one another’s performance.                          John Butler and Butler Companies, jointly and
Pursuant to the express notice provisions, Fowler                     severally. In addition, John Butler was enjoined
terminated its contract with Welch. Butler                            from certain [*662] activities for one year from
Companies also terminated its contract with Welch.                    the date of the judgment. 4
Subsequently, John Butler, the president 2 of
Butler Companies, was hired by the National                             [**5] BREACH OF THE BUTLER
Benevolent Association (NBA), one of whose                            COMPANIES-WELCH NONCOMPETITION
1
    The court of appeals’ opinion was originally unpublished but has been ordered published by this court.
2
    As far as we can determine from the record, John Butler was the only ″employee″ of Butler Companies.
3
    The terms ″covenant not to compete″ and ″noncompetition clause″ are used interchangeably in this opinion.
4
    The judgment inexplicably enjoined John Butler as follows:

       IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that a permanent injunction be granted enjoining John W.
       Butler for a period of one year from the date of this Judgment [April 2, 1987] from contacting any individual or entity, who
       resides in the United States, the identity of whom or which was first disclosed by WAI [Welch] to John W. Butler during
       the term of the management contract between Welch Associates, Inc., and the John W. Butler Companies, Inc., for the
       purpose of soliciting funds.

       Since more than one year has passed from the date of judgment, the injunction has expired by its own terms and it is not
       necessary for this court to address its validity. See Parr v. Stockwell, 159 Tex. 440, 322 S.W.2d 615 (1959). Furthermore,
                                                                                                                          Page 4 of 10
                                     793 S.W.2d 660, *662; 1990 Tex. LEXIS 77, **5



CLAUSE                                                                  of the National Benevolent Association,
                                                                        St. Louis, Missouri, without the expressed
The jury found that John Butler breached the
                                                                        written consent of Welch Associates, Inc.
noncompetition       clause    of     the   Butler
Companies-Welch contract by accepting the                          HN1 A covenant not to compete is in restraint of
Director of Development position with NBA.                         trade and unenforceable on grounds of public
Among other things, judgment for actual damages                    policy unless it is reasonable. DeSantis v.
was rendered for Welch and against John Butler                     Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990);
based upon his breach of the noncompetition                        Frankiewicz v. National Comp Assoc., 633 S.W.2d
clause. John Butler argues that the noncompetition                 505, 507 (Tex. 1982). A covenant not to compete
clause of the Butler Companies-Welch contract is                   is not a reasonable restraint of trade unless it
unenforceable as written and that Welch may not                    meets each of three criteria: (1) the covenant not
recover monetary damages for breach of an                          to compete must be ancillary to an otherwise valid
unenforceable noncompetition clause. Welch does                    transaction or relationship; (2) the restraint created
not allege that Butler Companies violated the                      by the covenant not to compete must not be
noncompetition clause by contracting with Welch’s                  greater [**7] than necessary to protect the
clients; rather, Welch argues that John Butler and                 promisee’s legitimate interest; and (3) the
Butler Companies are liable for breach of contract                 promisee’s need for the protection afforded by the
because John Butler violated the noncompetition                    covenant not to compete must not be outweighed
clause in the Butler Companies-Welch contract by                   by either the hardship to the promisor or any
accepting a position with NBA. Since the                           injury likely to the public. DeSantis v. Wackenhut
noncompetition clause is unenforceable as written,                 Corp., S.W.2d at . Whether a covenant not to
we agree that Welch may not recover monetary                       compete is a reasonable restraint of trade is a
damages for John Butler’s breach of the Butler                     question of law for the court. DeSantis v.
Companies-Welch contract.                                          Wackenhut Corp.,        S.W.2d at       ; Hershaw v.
The noncompetition clause in the Butler                            Kroenecke, 656 S.W.2d 416, 418 (Tex. 1983).
Companies-Welch contract provides:                                 In determining the enforceability of the
                                                                   noncompetition        clause     in    the      Butler
   The [**6] employees of the John W.                              Companies-Welch contract, we need only consider
   Butler Companies, Inc., upon acceptance                         the second criteria: the restraint created by the
   of this contract, agreed that no disclosure                     covenant not to compete [*663] must not be
   of any confidential information will be                         greater than necessary to protect the promisee’s
   given to any third party at any time; and                       legitimate interest. HN2 Under the second criteria,
   further, that during the life of this contract,                 our primary focus is whether the covenant not to
   and for a period of two (2) years after                         compete incorporates reasonable limitations
   conclusion of this contract, The John W.                        concerning time, geographical area and scope of
   Butler Companies, Inc., will not enter into                     activity which do not impose a greater restraint
   any form of contract for services, directly                     than is necessary to protect the promisee’s interest.
   or indirectly, with any client of Welch                         DeSantis v. Wackenhut Corp., S.W.2d at . As
   Associates, Inc., past or present, including                    written, the noncompetition clause in the Butler
   Juliette Fowler Homes, Inc., any agencies                         [**8] Companies-Welch contract contains no
    in the court of appeals, Welch conceded that ″the injunction fashioned by the [Trial] Court is not on point with either the
    restrictive covenant found in the Butler [Companies-Welch] Contract or the evidence offered at trial.″



                                                                                                                       Page 5 of 10
                                         793 S.W.2d 660, *663; 1990 Tex. LEXIS 77, **8



limitations concerning geographical area or scope                           carved out an area or a period that is
of activity. Butler Companies and its employees 5                           reasonable under the circumstances. It is
are prohibited from entering into any form of                               one thing for the court to do this as an
contract for services or employment in any                                  incident to the granting of injunctive relief
capacity or position, directly or indirectly, with                          which operates prospectively and an
any past or present clients of Welch wherever they                          entirely different matter to [**10] reform
may be located. This prohibition is absolute,                               the contract for the purpose of giving the
unequivocal and unreasonable. Accordingly, we                               employer a cause of action for damages.
hold that the noncompetition clause in the Butler                           In the latter situation the defendant would
Companies-Welch contract as written is an                                   be required to respond in damages for
unreasonable restraint of trade and unenforceable                           what he had done at a time when there was
on grounds of public policy.                                                no way of determining, except possibly by
                                                                            an action for declaratory judgment, where
John Butler argues that since the noncompetition
                                                                            or for how long he was legally obligated to
clause of the Butler Companies-Welch [**9]
                                                                            refrain from competing.
contract is unenforceable as written, Welch may
not recover monetary damages for breach of an                               *****
unenforceable noncompetition clause. We agree.
                                                                            We hold that HN3 an action for damages
An action for damages may not be predicated                                 resulting from competition occurring
upon the breach of an unenforceable                                         before a reasonable territory and period
noncompetition clause. Weatherford Oil Tool Co.                             have been prescribed by a court of
v. Campbell, 161 Tex. 310, 340 S.W.2d 950,                                  competent jurisdiction must stand or fall
952-953 (1960); Frankiewicz v. National Comp                                on the contract as written. If the agreement
Assoc., 633 S.W.2d at 507-508. For purposes of an                           is not enforceable in accordance with its
action for damages, the enforceability of the                               terms because either the time or the area
covenant not to compete will be determined as                               stipulated therein is unreasonable, the
written and may not be modified to render it                                employer may obtain injunctive relief but
reasonable and enforceable. Weatherford Oil Tool                            will not be awarded a money recovery for
Co. v. Campbell, 340 S.W.2d at 952-953;                                     anything the employee may have done
Frankiewicz v. National Comp Assoc., 633 S.W.2d                             prior to a judicial declaration of the rights
at 507-508. As this court discussed in Weatherford                          and obligations arising from the contract.
Oil Tool Co. v. Campbell:
                                                                       340 S.W.2d at 952-953. Since the noncompetition
     If the agreement is not reasonably limited                        clause of the Butler Companies-Welch contract is
     as to either time or space, the parties are                       unenforceable as written, we hold that Welch may
     not definitely apprised of their respective                       not recover monetary damages for John Butler’s
     rights and duties until a court of equity has                     breach of the noncompetition clause by accepting




5
    Since it is not necessary to the disposition of this cause, we do not address (1) whether Welch could enforce the noncompetition clause
in the Butler Companies-Welch contract against John Butler simply because he is an employee of Butler Companies or (2) whether John
Butler is individually liable for the breach of the Butler Companies-Welch contract.
                                                                                                                            Page 6 of 10
                                        793 S.W.2d 660, *663; 1990 Tex. LEXIS 77, **11


                                           6
    [**11]   a position with NBA.                                     defense to Welch’s tortious interference claim
                                                                      against Fowler.
  [**12] [*664] TORTIOUS INTERFERENCE
WITH THE BUTLER COMPANIES-WELCH HN4 In Texas, [**13] the elements of a cause of
CONTRACT                                          action for tortious interference with contractual
                                                  relations are (1) there was a contract subject to
Welch obtained favorable jury findings regarding
its claim that Fowler tortiously interfered with interference, (2) the act of interference was willful
Welch’s contractual relationship with Butler and intentional, (3) such intentional act was a
Companies. Fowler argues that a judgment cannot proximate cause of plaintiffs damage, and (4)
be based upon tortious interference with the actual damage or loss occurred. Armendariz v.
Butler Companies-Welch contract because the Mora, 553 S.W.2d 400, 404 (Tex. Civ. App. -- El
contractual provision that was violated -- the Paso 1977, writ ref’d n.r.e.); see also Hi-Line
noncompetition clause -- is unenforceable. Fowler Elec. Co. v. Dowco Elec.
                                                                         7
                                                                               Prod., 765 F.2d 1359,
argues that the noncompetition clause in the 1362 (5th Cir. 1985).
Butler Companies-Welch contract as written is an                      The first element requires the [**14] existence of
unreasonable restraint of trade and unenforceable                     a valid contract. Steinmetz & Assoc., Inc. v. Crow,
on grounds of public policy. Therefore, Fowler’s                      700 S.W.2d 276, 277 n.1 (Tex. App. -- San
actions ″inducing″ John Butler to accept the                          Antonio 1985, writ ref’d n.r.e.). However, even an
Director of Development position with NBA                             unenforceable contract may serve as the basis for
cannot support a judgment for tortious interference.                  a tortious interference claim if the contract is not
This argument presents the narrow issue of                            void. Clements v. Withers, 437 S.W.2d 818, 821
whether the unenforceability of the noncompetition                    (Tex. 1969). In other words, mere unenforceability
clause in the Butler Companies-Welch contract is                      of a contract is not a defense to an action for
a defense to Welch’s action against Fowler for                        tortious interference with its performance. Id.
tortious interference with contractual relations.
Under the facts of this case, we hold that the                        Clements concerned an action for tortious
unenforceability of the noncompetition clause is a                    interference with a real estate listing agreement
6
     While this cause was pending before this court, the Legislature added sections 15.50 and 15.51 to the Texas Business and Commerce
Code concerning covenants not to compete. TEX. BUS. & COM. CODE ANN. §§ 15.50, 15.51 (Vernon Supp. 1990). The legislature
made these sections applicable ″to a covenant entered into before, on, or after the effective date of this Act.″ Act of June 16, 1989, ch.
1193, § 1, 1989 Tex. Gen. Laws 4852 (effective Aug. 28, 1989). See DeSantis v. Wackenhut Corp., S.W.2d at . We need not determine
in this case whether sections 15.50 and 15.51 apply retroactively to affect litigation concerning the rights of parties to a covenant not
to compete which commenced before the statute was enacted. See DeSantis v. Wackenhut Corp.,               S.W.2d at     ; Martin v. Credit
Protection Ass’n, 793 S.W.2d 667 (Tex. 1990). Under section 15.50(2), ″a covenant not to compete is enforceable to the extent that it
. . . contains reasonable limitations as to time, geographical area, and scope of activity to be restrained that do not impose a greater
restraint than is necessary to protect the goodwill or other business interest of the promisee.″ TEX. BUS. & COM. CODE ANN. §
15.50(2) (Vernon Supp. 1990). Under section 15.51(c), if the covenant not to compete ″does not meet the criteria specified by Subdivision
(2) of Section 15.50, the court, at the request of this promisee, shall reform the covenant to the extent necessary to cause the covenant
to meet the criteria specified by Subdivision (2) of Section 15.50 and enforce the covenant as reformed, except that the court may not
award the promisee damages for a breach of the covenant before its reformation and the relief granted to the promisee shall be limited
to injunctive relief.″ TEX. BUS. & COM. CODE ANN. § 15.51(c) (Vernon Supp. 1990). Thus, sections 15.50(2) and 15.51(c) would
not require a result in this case different from the one we reach today. See DeSantis v. Wackenhut Corp., S.W.2d at ; Martin v. Credit
Protection Ass’n, S.W.2d at .
7
    At one time the lack of justification or excuse was viewed as an element of the plaintiffs right of recovery. Sakowitz, Inc. v. Steck,
669 S.W.2d 105, 107 (Tex. 1984). Recently, however, this court overruled Sakowitz and its progeny holding that ″the privilege of legal
justification or excuse in the interference of contractual relations is an affirmative defense upon which the defendant has the burden of
proof″ Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989).
                                                                                                                           Page 7 of 10
                                         793 S.W.2d 660, *664; 1990 Tex. LEXIS 77, **14



that was unenforceable between the contracting                          Fowler and Welch. Paragraph 14, the termination
parties under the statute of frauds. Id. at 820. In                     provision, specified how the termination notice
Clements, we expressly noted that the contract                          should be given and how payment should be
 [*665] was not void or illegal, neither was there                      calculated in the event of termination. 8 Welch
any public policy opposing its performance. Id. at                      does not contest that written notice of termination
821. We now hold that HN5 covenants not to                              was properly given, rather it claims that
compete which are unreasonable restraints of                            termination was wrongful because there was no
trade and unenforceable on grounds of public                            good faith [**16] reason for termination.
policy cannot form the basis of an action for
tortious interference. See NCH Corp. v. Share                           At trial, the jury specifically found that Fowler
Corp., 757 F.2d 1540, 1543-1544 (5th Cir. 1985);                        and Welch mutually intended and agreed that the
Hi-Line Elec. Co. v. Dowco Elec. Prod., 765 F.2d                        fund-raising contract could be terminated for any
at 1362.                                                                reason. HN6 When a contract provides expressly
                                                                        that it is subject to termination upon notice, the
As we have noted above,             [**15]    the                       general rule is that each party to the contract has
noncompetition      clause     in    the   Butler                       the legal right to cancel the [**17] contract.
Companies-Welch contract as written is an                               Kingsbery v. Phillips Petroleum Co., 315 S.W.2d
unreasonable restraint of trade and unenforceable                       561, 576 (Tex. Civ. App. -- Austin 1958, writ ref’d
on grounds of public policy. We hold, therefore,                        n.r.e.). In this case, the parties bargained for the
that the unenforceability of the noncompetition                         flexibility of terminating the contract upon tender
clause in the Butler Companies-Welch contract is                        of the requisite notice. Neither party should be
a valid defense to Welch’s tortious interference                        denied the benefit of its bargain. We hold that
claim against Fowler.                                                   Fowler properly terminated the fund-raising
                                                                        contract pursuant to its express terms; therefore,
BREACH   OF                  THE          FOWLER-WELCH                  Welch’s breach of contract claim against Fowler
CONTRACT                                                                must fail.
Fowler argues that the court of appeals erred in
affirming the trial court’s judgment ″if based upon                     TORTIOUS INTERFERENCE                            WITH            THE
a claim of breach of contract,″ since the                               FOWLER-WELCH CONTRACT
fund-raising contract was properly terminated. We
                                                 At trial, the jury found that John Butler and Butler
address this point because the trial court’s
                                                 Companies tortiously interfered with the
judgment against Fowler did not specify whether
                                                 contractual relationship between Fowler and
it was based upon Welch’s tortious interference or
                                                 Welch. John Butler and Butler Companies argue
breach of contract claim against Fowler.
                                                 that since Fowler properly terminated the
The fund-raising contract involved in this case fund-raising contract with Welch pursuant to the
was a negotiated, arm’s length agreement between contract’s express notice provisions, judgment
8
    Paragraph 14, the termination provision, states:

       This agreement may be cancelled by either party with the cancellation to be effective sixty days after the mailing or personal
       delivery of a written notice of cancellation; in the event of a cancellation, the professional fee will be prorated to the date
       of cancellation according to the fee payment schedule on the effective date of cancellation, based upon the rate of payment
       to WAI in effect for the particular month in which the termination is effective, and the remaining unpaid fees established
       by the schedule herein will not be due or owing by Juliette Fowler Homes, Inc., to Welch Associates, Inc.



                                                                                                                             Page 8 of 10
                                        793 S.W.2d 660, *665; 1990 Tex. LEXIS 77, **17



could not be rendered against John Butler or                           with the Fowler-Welch contract. After a thorough
Butler Companies for tortious interference with                        review of the record, we agree.
the Fowler-Welch contract. Welch argues that
Texas law protects against tortious interference                       HN8 In reviewing a no evidence point, we
with valid existing contracts and prospective                          consider only the evidence and inferences tending
business relationships, and that an existing contract                  to support the jury verdict and disregard all
which is terminable upon notice should be given                        evidence to the contrary. Garza v. Alviar, 395
similar protection.                                                    S.W.2d 821, 823 (Tex. 1965). If there is any
                                                                       evidence of probative value to support the jury’s
[**18] Texas law protects existing and prospective                     finding that John Butler and Butler Companies
contracts from interference. Sterner v. Marathon                       tortiously interfered with the Fowler-Welch
Oil Co., 767 S.W.2d 686, 689 [*666] (Tex. 1989);                       contract, we must overrule the no evidence point.
C F & I Steel Corp. v. Pete Sublett & Co., 623                         9
                                                                         In re King’s Estate, 150 Tex. 662, 244 S.W.2d
S.W.2d 709, 715 (Tex. Civ. App. -- Houston [1st
                                                                       660, 661-662 (1951).
Dist.], 1981, writ ref’d n.r.e.); Harshberger v.
Reliable-Aire, Inc., 619 S.W.2d 478, 481 (Tex.                  In 1983, Fowler became increasingly
                                                                        [**20]
Civ. App. -- Corpus Christi 1981, writ dism’d        dissatisfied with the direction and results of
w.o.j.). In Sterner v. Marathon Oil Co., 767         Welch’s fund-raising efforts. John Butler was also
S.W.2d at 689, this court held that the              dissatisfied with Welch and the operation of the
terminable-at-will status of a contract was no       fund-raising campaign. In mid-1983, Ed Dowell,
defense to an action for tortious interference with  Fowler’s Executive Director, allegedly stated that
its performance. HN7 Until a contract is             it would be good for Fowler if the current NBA
terminated, it is valid and subsisting, and third    Director of Development was no longer there and
persons are not free to tortiously interfere with it.
                                                     John Butler could be moved into that position. Mr.
Id; see RESTATEMENT (SECOND) OF TORTS §
                                                     Dowell allegedly expressed his desire that John
766 comment g (1979). It would be inconsistent to
                                                     Butler assume total responsibility for the
leave contracts that are terminable upon notice
                                                     development of Fowler including the fund-raising
unprotected from tortious interference while
                                                     campaign. Mr. Dowell and John Butler had worked
protecting relations that are more or less
                                                     together on the fund-raising campaign almost
″complete″ or ″definitive″ (i.e., contracts with
                                                     since its inception.
fixed terms, terminable-at-will contracts and
                                                     In September 1983, the NBA Director of
prospective business relations). See Champion v.
                                                     Development was terminated. Subsequently,
Wright, 740 S.W.2d 848, 854 (Tex. App. -- San
                                                     Fowler appointed a Search Committee to find a
Antonio 1987, writ denied); Deauville [**19]
                                                     successor. In December 1983, Mr. Dowell
Corp. v. Federated Dept. Stores, Inc., 756 F.2d
                                                     contacted John Butler concerning the Director of
1183, 1195 (5th Cir. 1985). We hold that the
                                                     Development position; however, John Butler was
terminable upon notice status of the Fowler-Welch
                                                     not particularly interested. In January 1984, the
contract is not a defense to an action for tortious
                                                     members of the Search Committee decided that
interference with its performance.
                                                     they wanted John Butler to be the Director of
John Butler and Butler Companies argue that Development. Mr. Warren Moray, the Chairman
there is no evidence that they tortiously interfered of the Fowler Board, indicated that he would
9
    HN9 No evidence points of error must and may only be sustained when the record discloses: (1) a complete absence of evidence of
a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact;
(3) the evidence offered to prove a vital fact is no more than a mere scintilla; and (4) the evidence established conclusively the opposite
of the vital fact. Calvert, ″No Evidence″ and ″Insufficient Evidence″ Points of Error, 38 TEX. L. REV. 361, 362-363 (1960).
                                                                                                                            Page 9 of 10
                               793 S.W.2d 660, *666; 1990 Tex. LEXIS 77, **20



contact John Butler to [**21] see if he was             is not entitled to an award of actual damages.
interested in the position. Although he was not         HN11 Recovery of actual damages is a prerequisite
initially interested, John Butler decided to discuss    to the receipt of exemplary damages. Doubleday
the position. In February 1984, John Butler             & Co., Inc. v. Rogers, 674 S.W.2d 751, 753-754
informed Welch that he was interested in the            (Tex. 1984). Consequently, Welch is not entitled to
Director of Development position and had decided        recover exemplary damages.
to pursue this employment opportunity. In April
1984, Fowler hired John Butler and terminated           CONCLUSION
the Fowler-Welch contract. The decision to hire         We conclude, therefore, that the noncompetition
John Butler as Director of Development was not          agreement in the Butler Companies-Welch contract
dependent upon the termination of the                   as written is an unreasonable restraint of trade and
Fowler-Welch contract and the termination of the        unenforceable on grounds of public policy
Fowler-Welch contract was not dependent upon            Furthermore, since the noncompetition clause of
John Butler’s hiring.                                   the Butler Companies-Welch contract is
                                                        unenforceable as written, Welch may not recover
Even if John Butler had induced Fowler to
                                                        monetary damages for John Butler’s breach of the
terminate the Fowler-Welch contract, [*667]
                                                        noncompetition clause by accepting a position
HN10 merely inducing one of the parties to
                                                        with NBA. Since the noncompetition clause of the
exercise his right to terminate contractual relations
                                                        Butler Companies-Welch contract as written is an
after giving the required notice does not
                                                        unreasonable restraint of trade and unenforceable
necessarily constitute tortious interference with
                                                         [**23]      on grounds of public policy, it cannot
contract under Texas law. C.E. Services, Inc. v.
                                                        serve as the basis for a tortious interference claim
Control Data Corp., 759 F.2d 1241, 1248 (5th
                                                        against Fowler.
Cir.), cert denied, 474 U.S. 1037, 106 S. Ct. 604,
                                                        Since Fowler terminated its contract with Welch
88 L. Ed. 2d 583 (1985); Kingsbery v. Phillips
                                                        pursuant to the express notice provisions of the
Petroleum Co., 315 S.W.2d at 576. Furthermore,
                                                        contract, Fowler cannot be held liable for breach
even if Fowler’s termination of the Fowler-Welch
                                                        of the Fowler-Welch contract. Moreover, we hold
contract was an ″outgrowth″ [**22] of John
                                                        that there is no evidence that John Butler or Butler
Butler’s hiring, this would not constitute any
                                                        Companies tortiously interfered with the
evidence that John Butler or Butler Companies
                                                        Fowler-Welch contract. Since Welch is not entitled
either induced Fowler to terminate the contract or
                                                        to an award of actual damages, it is not entitled to
tortiously interfered with the contract.
                                                        recover exemplary damages. We hereby reverse
Since we have determined that there is no evidence      the judgment of the court of appeals and render
that John Butler or Butler Companies tortiously         judgment that Welch take nothing.
interfered with the Fowler-Welch contract, Welch




                                                                                               Page 10 of 10
EXHIBIT D
|   | Warning
As of: March 3, 2015 3:30 PM EST

                           Travel Masters, Inc. v. Star Tours, Inc.
                                      Supreme Court of Texas
                                   December 18, 1991, Delivered
                                             No. D-0962

Reporter
827 S.W.2d 830; 1991 Tex. LEXIS 158; 35 Tex. Sup. J. 254; 7 I.E.R. Cas. (BNA) 60
TRAVEL   MASTERS,  INC. ET                   AL.,    matter of law. The lower court affirmed the
PETITIONERS v. STAR TOURS,                  INC.,    judgment against the other petitioners. On appeal,
RESPONDENT                                           the court held that the covenant not to compete
                                                     was unenforceable as a matter of law because it
Prior History: [**1] ON APPLICATION FOR              was not ancillary to an otherwise enforceable
WRIT OF ERROR TO THE COURT OF                        agreement. Because employment-at-will was not
APPEALS FOR THE FIFTH DISTRICT OF                    binding upon either the employee or the employer
TEXAS                                                and was not an otherwise enforceable agreement,
                                                     a covenant not to compete executed either at the
Core Terms                                           inception of or during an employment-at-will
                                                     relationship could not be ancillary to an otherwise
covenant, compete, Travel, enforceable agreement,    enforceable agreement and was unenforceable as
unenforceable, tortious interference, court of       a matter of law. Further, the court held that
appeals, matter of law, employment-at-will,          respondent could not recover damages from
illegality, ancillary                                petitioner father or petitioner company for the
                                                     tortious interference of the covenant. The court
Case Summary                                         rendered judgment that respondent take nothing
                                                     against petitioners.
Procedural Posture
                                                     Outcome
Petitioners sought review from a decision of the
Court of Appeals for the Fifth District of Texas,    The court reversed the judgment of the lower
which reversed the decision of the trial court and   court and rendered judgment that respondent take
held that a covenant not to compete was              nothing against petitioners. The covenant not to
enforceable as a matter of law.                      compete was unenforceable as a matter of law
                                                     because it was not ancillary to an otherwise
Overview                                             enforceable agreement.
Respondent sued petitioners, seeking injunctive
relief and damages for the breach of a covenant LexisNexis® Headnotes
not to compete and for tortious interference with a
contractual relationship. The lower court reversed  Business & Corporate Law > Distributorships &
and remanded the covenant not to compete claim      Franchises > Causes of Action > Covenants not to
against petitioner daughter, holding that the       Compete
covenant not to compete was enforceable as a        Contracts Law > Types of Contracts > Covenants
                              827 S.W.2d 830, *830; 1991 Tex. LEXIS 158, **1



  Labor & Employment Law > ... > Conditions &           Contracts Law > Types of Contracts > Covenants
  Terms > Trade Secrets & Unfair Competition >
   Noncompetition & Nondisclosure Agreements         HN3 Covenants not to compete which are
                                                     unreasonable restraints of trade and unenforceable
HN1 A covenant not to compete is in restraint of on grounds of public policy cannot form the basis
trade and unenforceable on grounds of public of an action for tortious interference.
policy unless it is reasonable. Whether a covenant
not to compete is a reasonable restraint of trade is Counsel: FOR PETITIONER Mr. Tom S.
a question of law for the court. Among other McCorkle, McCorkle & Westerburg, P. C., 500
things, an enforceable covenant not to compete Katy Bldg., Dallas, TX 75202
must be ancillary to an otherwise enforceable
agreement.                                           FOR RESPONDENTS Mr. Randy Roberts,
                                                     Scoggins, O’Connor & Blanscet, 14180 Dallas
   Business & Corporate Law > Distributorships &
                                                     Parkway, Suite 800, Dallas, TX 75240. Mr.
   Franchises > Causes of Action > Covenants not to
   Compete
                                                     Bradley S. Freedberg, Scoggins, O’Connor &
                                                     Blanscet, 14180 Dallas Parkway, Suite 800, Dallas,
   Contracts Law > Types of Contracts > Covenants    TX 75240. Mr. Randy Roberts, Scoggins,
   Labor & Employment Law > Employment O’Connor & Blanscet, 14180 Dallas Parkway,
   Relationships > General Overview                  Suite 800, Dallas, TX 75240
  Labor & Employment Law > Employment
  Relationships > At Will Employment > General       Judges: HIGHTOWER
  Overview
                                                     Opinion by: JACK HIGHTOWER
  Labor & Employment Law > Employment
  Relationships > At Will Employment > Duration of
  Employment                                         Opinion
  Labor & Employment Law > ... > Conditions &
                                                      [*831] OPINION
  Terms > Trade Secrets & Unfair Competition >
   Noncompetition & Nondisclosure Agreements         In this covenant not to compete case, Star Tours,
                                                     Inc. sued Travel Masters, Inc., Donna Goldsmith
HN2 An ″employment-at-will″ relationship is not      and Walter Goldsmith seeking, among other things,
binding upon either the employee or the employer.    injunctive relief and damages from Donna
Either may terminate the relationship at any time.
                                                     Goldsmith for the breach of a covenant not to
Thus, an employment-at-will relationship,
                                                     compete and from Travel Masters and Walter
although valid, is not an otherwise enforceable
                                                     Goldsmith for the tortious interference with a
agreement. Because employment-at-will is not
                                                     contractual relationship. The trial court rendered
binding upon either the employee or the employer
                                                     judgment in favor of Donna Goldsmith concerning
and is not an otherwise enforceable agreement, a
                                                     the covenant not to compete claim and against
covenant not to compete executed either at the
inception of or during an employment-at-will         Travel Masters and Walter Goldsmith concerning
relationship cannot be ancillary to an otherwise     the tortious interference with the covenant not to
enforceable agreement and is unenforceable as a      compete. The court of appeals reversed [**2] and
matter of law.                                       remanded the covenant not to compete claim
                                                     against Donna Goldsmith, holding that the
  Business & Corporate Law > Distributorships &      covenant not to compete was enforceable as a
  Franchises > Causes of Action > Covenants not to   matter of law. The court affirmed the judgment
  Compete                                            against Travel Masters and Walter Goldsmith.
                                                                                             Page 2 of 5
                                       827 S.W.2d 830, *831; 1991 Tex. LEXIS 158, **2



  S.W.2d . We reverse the judgment of the court     incorporated Travel Masters, a competing travel
of appeals and render judgment that Star Tours      agency. Donna eventually left Star Tours and
take nothing against Travel Masters, Donna          joined Travel Masters as its president. Star Tours
Goldsmith and Walter Goldsmith.                     attempted to enforce the covenant not to compete
                                                    against Donna and Travel Masters and ultimately
Donna Goldsmith, an experienced travel agent,
                                                    sought, and obtained, a temporary injunction
was hired by Star Tours with the intent to
                                                    restraining Donna and Travel Masters from
eventually make her office manager. As a condition
                                                    soliciting specified Star Tours customers. 1
of her employment, Donna executed an ″Employee
Non-Competition Agreement″ which consisted [**4] Star Tours thereafter added Donna’s father,
entirely of a covenant not to compete. The Walter, as a defendant and sought damages from
agreement provided:                                 him and Travel Masters for tortious interference
WHEREAS, Employee, in consideration of the with a contractual relationship and from Donna
agreements herein contained and the compensation for breach of the covenant not to compete. On
to be paid her, expressly agrees that she will not, Donna’s motion, the trial court granted a directed
for a period of twenty-four (24) months after verdict in her favor because the covenant not to
termination of her employment hereunder for any compete was unenforceable. However, the tortious
reason whatsoever, directly or indirectly as interference claims against Walter and Travel
Employer, Employee, stockholder, principal agent Masters were submitted to a jury. The jury found
Employee or in any other individual representative that Walter and Travel Masters wrongfully and
capacity whatsoever, solicit, serve or cater to or maliciously induced a breach of the covenant not
engage in, assist, be interested in or connected to compete and awarded Star Tours actual and
with any other [**3] person, firm or corporation exemplary damages. The court of appeals reversed
in the same or similar business of Employer and remanded the covenant not to compete claim
soliciting, serving or catering to any of the against Donna, holding that the covenant not to
customers served by her or by any other employee compete was enforceable as a matter of law. The
of Employer during the term of her employment. court affirmed the judgment against Travel Masters
Additionally, Employee shall not disclose to any and Walter.
other persons, firms or entities in the same or
                                                                    I.
similar business as Employer, the names,
customers of Employer nor disclose any                              Donna argues that the covenant not to compete is
information of any kind pertaining to the terms of                  unenforceable as a matter of law because it was
any agreements between Employer and its                             not ancillary to an otherwise enforceable
customers.                                                          agreement. We agree.
Although Donna signed the ″Employee
                                             HN1 A covenant not to compete is in restraint of
Non-Competition Agreement″ prohibiting [*832]
                                             trade and unenforceable on grounds of public
her competition with Star Tours for two years, she
                                             policy unless it is reasonable. Martin v. Credit
was an employee-at-will and was subject to
                                             Protection Ass’n, [**5] Inc., 793 S.W.2d 667, 668
termination at any time for any reason.
                                             (Tex. 1990); Desantis v. Wackenhut Corp., 793
Several years after beginning her employment S.W.2d 670, 681 (Tex. 1990). Whether a covenant
with Star Tours, Donna and her parents not to compete is a reasonable restraint of trade is
1
   Travel Masters and Donna appealed the temporary injunction; the court of appeals affirmed the trial court. This court dismissed the
application for writ of error for want ofjurisdiction. 742 S.W.2d 837 Tex. App.--Dallas 1987, writ dism’d w.o.j.).
                                                                                                                        Page 3 of 5
                                        827 S.W.2d 830, *832; 1991 Tex. LEXIS 158, **5



a question of law for the court. Martin, 793                           enforceable agreement. Id. at 669-70. See Sterner
S.W.2d at 668-69. Among other things, an                               v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex.
enforceable covenant not to compete must be                            1989). Because employment-at-will is not binding
ancillary to an otherwise enforceable agreement.                       upon either the employee or the employer and is
Martin, 793 S.W.2d at 669. See Tex. Bus. & Com.                        not an otherwise enforceable agreement, we
Code § 15.50.                                                          conclude that a covenant not to compete executed
                                                                       either at the inception of or during an
In Martin, we examined an ″employment
                                                                       employment-at-will relationship cannot be
agreement″ consisting entirely of a covenant not
                                                                       ancillary to an otherwise enforceable agreement
to compete. The ″employment agreement″ was
executed three years after Martin became an                            and is unenforceable as a matter of law. Since
employee-at-will and Martin faced termination if                       Donna’s covenant not to compete is not ancillary
he refused to execute the agreement. Martin, 793                       to an otherwise enforceable agreement, we hold
S.W.2d at 669. We held that the covenant not to                         [**7]     that the covenant not to compete is an
compete was not ancillary to an otherwise                              unreasonable restraint of trade and unenforceable
enforceable agreement as a matter of law because                       on grounds of public policy.
neither the ″employment agreement″ nor the
employment-at-will relationship was an otherwise                       II.
enforceable agreement. Id. at 669-70. In this case,                    Travel Masters and Walter argue that since the
the ″employment agreement″ consisted entirely of                       covenant not to compete was unenforceable, it
a covenant not to compete; it did not contain any                      cannot form the basis of an action for tortious
terms or provisions usually associated with an                         interference. We agree.
employment contract. Donna was required to
 [**6] sign the covenant not to compete as a                           Star Tours alleged that Walter and Travel Masters
condition of employment. The only difference                           willfully and intentionally induced Donna to
between this case and Martin is that Donna                             breach the covenant not to compete. HN3
executed the covenant not to compete                                   Covenants not to compete which are unreasonable
contemporaneously with the inception of her                            restraints of trade and unenforceable on grounds
employment while the Martin covenant was                               of public policy cannot form the basis of an action
executed three years after Martin began                                for tortious interference. Juliette Fowler Homes v.
employment.                                                            Welch Asso., 793 S.W.2d 660, 665 (Tex. 1990).
                                                                       Since the covenant not to compete is an
In both cases, however, the employment                                 unreasonable restraint [**8]         of trade and
relationship was ″at-will″. 2 HN2 An                                   unenforceable on grounds of public policy, we
″employment-at-will″ relationship is not binding                       hold that Star Tours cannot recover damages from
upon either the employee or the employer. Either                       Walter 3 or Travel Masters for the tortious
may terminate the relationship [*833] at any                           interference of the covenant not to compete.
time. Id. at 669. Thus, an employment-at-will
relationship, although valid, is not an otherwise                       [**9] We reverse the judgment of the court of
2
   During oral argument, Star Tours asserted that Donna Goldsmith was not an employee-at-will because she was paid on a monthly
basis. However, the mere fact that Donna was paid on a monthly basis by Star Tours, without any other evidence, does not prove she
was other than an employee-at-will.
3
    The court of appeals held that Walter waived his affirmative defense of illegality of the covenant Dot to compete by failing to
specifically plead that defense. Although Walter did not plead illegality, Donna and Travel Masters did plead the affirmative defense of
illegality of the covenant not to compete. ″When issues not raised by the pleadings are tried by express or implied consent of the parties,
they shall be tread in all respects as if they had been raised by the pleadings.″ Gulf & Basco Co. v. Buchanan, 707 S.W.2d 655, 657 Tex.
                                                                                                                             Page 4 of 5
                                        827 S.W.2d 830, *833; 1991 Tex. LEXIS 158, **9



appeals and render judgment that Star Tours take JACK HIGHTOWER, JUSTICE
nothing against Travel Masters, Donna Goldsmith
and Walter Goldsmith.




App. -- Houston [1st Dist.] 1986, writ ref’d n.r.e.) (affirmative defense of ambiguity of contract); Tex. R. Civ. P. 67. The question of the
illegality of the covenant not to compete was clearly before the court. Consequently, in the absence of an objection, the illegality of the
covenant not to compete concerning Walter was tried by implied consent.
                                                                                                                              Page 5 of 5
EXHIBIT E
|   | Caution
As of: March 3, 2015 3:29 PM EST

                            Lazer Spot, Inc. v. Hiring Partners, Inc.
                         Court of Appeals of Texas, Sixth District, Texarkana
                     September 16, 2012, Submitted; October 18, 2012, Decided
                                          No. 06-12-00044-CV

Reporter
387 S.W.3d 40; 2012 Tex. App. LEXIS 8780
LAZER SPOT, INC., Appellant v. HIRING                   interfered with contracts between the employer
PARTNERS, INC., Appellee                                and some of its employees.

Subsequent History: Rehearing overruled by              Overview
Lazer Spot, Inc. v. Hiring Partners, Inc., 2012
Tex. App. LEXIS 8932 (Tex. App. Texarkana, Oct.         The employer and the company filed competing
30, 2012)                                               motions for summary judgment in a suit brought
Petition for review denied by Hiring v. Lazer           by the employer. The employer had alleged that
Spot, 2013 Tex. LEXIS 253 (Tex., Mar. 29, 2013)         the company had tortiously interfered with
                                                        contracts between the employer and some of its
Prior History: [**1] On Appeal from the 6th
                                                        employees. The trial court awarded summary
Judicial District Court, Lamar County, Texas.
                                                        judgment to the employer, but the appellate court
Trial Court No. 79914.
                                                        reversed, finding no basic for the summary
                                                        judgment granted in favor of the employer.
Core Terms
                                                        Judgment was further rendered in favor of the
                                                        company. Because the restrictive covenants were
Spot, employees, tortious interference, covenant,
                                                        not supported by consideration independent of the
Hiring, at-will, contracts, unenforceable,
                                                        simple act of hiring under an at-will agreement,
noncompetition, non competition agreement,
terminate, goodwill, compete, enforceable,              they were not ancillary to or part of an otherwise
employment contract, induce, contends, services,        enforceable agreement under Tex. Bus. & Com.
confidential information, summary judgment, pet,        Code Ann. § 15.50 (2011). Because a claim of
trial court, contractual, interfered, training, dock,   tortious interference could not be premised merely
summary judgment motion, attorney’s fees, matter        on the hiring of an at-will employee, without
of law, temporary                                       more, summary judgment was improperly granted
                                                        on the claim of tortious interference with
Case Summary                                            contractual relations; the employees were within
                                                        their rights to terminate employment with the
Procedural Posture                                      employer at any time.
Appellant company sought review of the decision Outcome
of the 6th Judicial District Court, Lamar County
(Texas), which granted summary judgment in
                                                 The judgment was reversed and judgment was
favor of appellee employer in the employer’s
                                                 rendered in favor of the company.
action alleging that the company had tortiously
                            387 S.W.3d 40, *40; 2012 Tex. App. LEXIS 8780, **1



LexisNexis® Headnotes                                 HN4 The requirement of an ″otherwise
                                                      enforceable agreement″ set out in Tex. Bus. &
  Civil Procedure > Appeals > Summary Judgment        Com. Code Ann. § 15.50(a) (2011) is satisfied
  Review > General Overview                           when the covenant is part of an agreement which
  Civil Procedure > ... > Summary Judgment >
                                                      contains mutual, nonillusory promises. An
  Motions for Summary Judgment > Cross Motions        ″otherwise enforceable″ agreement can emanate
                                                      from at-will employment so long as the
HN1 When both sides move for summary                  consideration for any promise is not illusory. A
judgment and the trial court grants one motion        noncompetition agreement must be supported by
and denies the other, reviewing courts consider       consideration to be enforceable. Consideration for
both sides’ summary-judgment evidence,                a noncompetition that is reasonably related to an
determine all questions presented, and render the     interest worthy of protection, such as trade secrets,
judgment the trial court should have rendered.        confidential information or goodwill, satisfies the
                                                      statutory nexus.
  Civil Procedure > Appeals > Standards of Review >
  De Novo Review                                        Contracts Law > Formation of Contracts >
  Civil Procedure > Appeals > Standards of Review >     Consideration > Sufficient Consideration
  Questions of Fact & Law                               Contracts Law > Standards of Performance >
  Labor & Employment Law > ... > Conditions &           Illusory Promises
  Terms > Trade Secrets & Unfair Competition >          Labor & Employment Law > ... > At Will
   Noncompetition & Nondisclosure Agreements            Employment > Exceptions > Implied Contracts
HN2 The Covenants Not to Compete Act governs           Labor & Employment Law > ... > Conditions &
the enforceability of noncompetition agreements,       Terms > Trade Secrets & Unfair Competition >
Tex. Bus. & Com. Code Ann. §§ 15.50-15.52               Noncompetition & Nondisclosure Agreements
(2011). The enforceability of a covenant not to
                                                     HN6 Where the nature of the employment requires
compete is a question of law. Appellate courts
                                                     the employer to furnish the employee with
review the trial court’s determinations of questions
                                                     confidential information, the employer impliedly
of law on a de novo basis.
                                                     promises to provide that information and that
   Labor & Employment Law > ... > Conditions & implied promise is sufficient consideration to
   Terms > Trade Secrets & Unfair Competition > support a covenant not to compete. Where an
    Noncompetition & Nondisclosure Agreements        employer in an at-will employment agreement
                                                     agrees to provide confidential information or
HN3 See Tex. Bus. & Com. Code Ann. § 15.50(a) other consideration to an employee, a reciprocal
(2011).                                              promise by the employee not to use the
                                                     confidential information in competition with the
   Contracts Law > Standards of Performance > employer may not be immediately enforceable
    Illusory Promises
                                                     because the employer’s promise is illusory because
   Labor & Employment Law > Employment he could terminate the employee before any
   Relationships > At Will Employment > General confidential information is shared. But, once the
   Overview                                          employer fulfills the promise to divulge the
   Labor & Employment Law > ... > Conditions & confidential information, the contract becomes
   Terms > Trade Secrets & Unfair Competition > enforceable and may support a covenant not to
    Noncompetition & Nondisclosure Agreements        compete. Thus, a covenant not to compete is not
                                                                                               Page 2 of 14
                              387 S.W.3d 40, *40; 2012 Tex. App. LEXIS 8780, **1



unenforceable solely because the employer’s                Labor & Employment Law > ... > Conditions &
promise is executory when made.                            Terms > Trade Secrets & Unfair Competition >
                                                            Noncompetition & Nondisclosure Agreements
  Contracts Law > Formation of Contracts >
                                                           Torts > ... > Contracts > Intentional Interference >
  Consideration > General Overview
                                                            Defenses
  Labor & Employment Law > ... > Conditions &
  Terms > Trade Secrets & Unfair Competition > HN9 Those covenants not to compete which are
   Noncompetition & Nondisclosure Agreements   unreasonable restraints of trade and unenforceable
                                               on grounds of public policy cannot form the basis
HN5 Employment agreements consisting entirely of an action for tortious interference Thus,
of a covenant not to compete are unenforceable unenforceability of a noncompetition covenant is
because the covenant must be supported by a valid defense to a claim of tortious interference.
valuable consideration.
                                                           Torts > ... > Contracts > Intentional Interference >
  Contracts Law > Formation of Contracts >                  Elements
  Consideration > General Overview
                                                       HN10 Even an unenforceable contract may serve
  Labor & Employment Law > ... > Conditions &
                                                       as the basis for a tortious interference claim if the
  Terms > Trade Secrets & Unfair Competition >
   Noncompetition & Nondisclosure Agreements           contract is not void, and mere unenforceability of
                                                       a contract is not a defense to an action for tortious
HN7 While goodwill is a protectable interest, interference with its performance. A tortious
goodwill does not encompass guidelines that interference claim may not be grounded on a
prevent the business from ceasing to exist contract that was void or illegal, or where there is
(although some goodwill is generally necessary any public policy opposing its performance.
for that aim). Consideration is required to support
a noncompetition agreement. ″Goodwill″ is                 Torts > ... > Business Relationships > Intentional
defined as the advantage or benefits which is             Interference > Elements
acquired by an establishment beyond the mere HN11 To establish liability for interference with a
value of the capital stock, funds or property prospective contractual or business relation, the
employed therein, in consequence of the general plaintiff must prove that it was harmed by the
public patronage and encouragement which it defendant’s conduct that was either independently
receives from constant and habitual customers on tortious or unlawful.
account of its local position, or common celebrity,
or reputation for skill, or influence, or punctuality,    Civil Procedure > ... > Summary Judgment >
or from other accidental circumstances or                  Burdens of Proof > General Overview
necessities, or even from ancient partialities or
                                                          Torts > ... > Contracts > Intentional Interference >
prejudices.
                                                           Defenses
  Labor & Employment Law > ... > Conditions &              Torts > ... > Contracts > Intentional Interference >
  Terms > Trade Secrets & Unfair Competition >              Elements
   Noncompetition & Nondisclosure Agreements
                                                 HN12 A party seeking to establish tortious
HN8 General skills and knowledge developed interference with a contract must prove four
through course of employment are not the type of elements: (1) that a contract subject to interference
interest which justifies protection under a exists; (2) that the alleged act of interference was
restrictive covenant.                            willful and intentional; (3) that the willful and
                                                                                                  Page 3 of 14
                             387 S.W.3d 40, *40; 2012 Tex. App. LEXIS 8780, **1



intentional act proximately caused damage; and            Civil Procedure > ... > Attorney Fees & Expenses >
(4) that actual damage or loss occurred. A                Basis of Recovery > Statutory Awards
defendant may defeat a tortious interference claim        Labor & Employment Law > ... > Conditions &
on summary judgment by disproving one element             Terms > Trade Secrets & Unfair Competition >
of the claim as a matter of law. To establish a            Noncompetition & Nondisclosure Agreements
willful and intentional act of interference, there
must be evidence that the defendant was more            HN16 Tex. Bus. & Com. Code Ann. § 15.51(c)
than a willing participant. The defendant must          (2011) permits the promisor to recover costs and
have knowingly induced one of the contracting           reasonable    attorney’s   fees,    in   certain
parties to breach its obligations under a contract.     circumstances.

  Labor & Employment Law > Employment                   Counsel: Hon. Michael V. Abcarian, Fisher &
  Relationships > At Will Employment > General          Phillips, LLP, Dallas, TX.
  Overview
  Torts > Business Torts > Commercial Interference >    Hon. Larry M. Lesh, Law Office of Larry M.
   General Overview                                     Lesh, Richardson, TX.
  Torts > ... > Commercial Interference > Contracts >
   General Overview                                     Hon. Paul M. Lanagan, Fisher & Phillips, LLP,
                                                        Dallas, TX.
HN13 Outside of the realm of allegedly
defamatory statements made by third parties that        Hon. Philip B. Smith Jr., Attorney at Law, Paris,
result in termination of at-will employment (where      TX.
inducement is apparently tortious because it is
accomplished via defamation), other actionable          Judges: Before Morriss, C.J., Carter and Moseley,
interference appears to hinge on violation of a         JJ. Opinion by Justice Moseley.
contractual provision, other than the at-will
provision.                                              Opinion by: Bailey C. Moseley

  Labor & Employment Law > Employment                   Opinion
  Relationships > At Will Employment > General
  Overview                                            [*43] The Judgment of the Trial Court in the
                                                     referenced proceeding on appeal from Lamar
  Torts > Business Torts > Commercial Interference >
   General Overview                                  county was this date REVERSED, and the
                                                     judgment here RENDERED, in conformity with
HN14 A claim of tortious interference cannot be the written Opinion of this Court of even date.
premised merely on the hiring of an at-will
employee, without more.                              A true copy of this Court’s Opinion and Judgment
                                                     is enclosed.
  Civil Procedure > ... > Attorney Fees & Expenses >
                                                        Respectfully yours,
  Basis of Recovery > Statutory Awards
  Labor & Employment Law > ... > Conditions &           Opinion by Justice Moseley
  Terms > Trade Secrets & Unfair Competition >
   Noncompetition & Nondisclosure Agreements            OPINION

HN15 See Tex. Bus. & Com. Code Ann. § 15.51(c) Hiring Partners, Inc. (HPI) and Lazer Spot, Inc.
(2011).                                        (Lazer Spot) filed competing motions for summary
                                                                                                Page 4 of 14
                                     387 S.W.3d 40, *43; 2012 Tex. App. LEXIS 8780, **1



judgment in a suit brought by HPI. HPI’s suit                        both the employer and employee acknowledged
alleged that Lazer Spot had tortiously interfered                    that the employees were in an employment at-will
with contracts between HPI and some of its                           status and wherein the [**3] employees each
employees. The trial court awarded summary                           agreed to be bound by the ninety-day
judgment to HPI. Because we find no basis for the                    noncompetition clause mentioned above.
summary judgment granted in favor of HPI and                         Unbeknownst to HPI, Lazer Spot received a
because Lazer Spot was entitled to summary                           request from Campbell’s Soup in approximately
judgment as a matter of law, we reverse the                          July 2010 to submit a proposal to provide truck
  [**2] judgment of the trial court and render                       spotting services at its Paris facility. While Lazer
judgment in favor of Lazer Spot.                                     Spot was aware that Arnold had been providing
                                                                     these services up to that point, Lazer Spot was
I. Background and Procedural Posture                                 unaware that Arnold was utilizing temporary
                                                                     employees supplied by HPI to perform yard work
HPI is in the business of recruiting workers for its
                                                                     (or truck spotting services). On October 7, 2010,
clients for the performance of services required by
                                                                     Campbell’s Soup awarded the contract for those
those clients. HPI requires each of its employees
                                                                     services to Lazer Spot.3 In mid-October, Lazer
to execute written employment contracts with
                                                                     Spot received employment [**4] applications
HPI. While the form of these contracts vary
                                                                      [*44] from the employees.4 On October 19, Lazer
somewhat, they each specifically state that the
                                                                     Spot interviewed and offered employment to the
employees are at-will employees. In addition,
                                                                     employees to work as gate clerks/dock hands at
each employment contract contains a ninety-day
                                                                     the Campbell’s Soup plant. At the time the
clause, which prohibits the employee from seeking
                                                                     employees were offered employment, Lazer Spot
″employment on a temporary, contract or
                                                                     was unaware of the employees’ written contracts
permanent basis at any company where introduced
                                                                     for employment with HPI, contracts which
by HPI for a period of ninety (90) days.″
                                                                     included the noncompetition agreements.5
This case involves three at-will employees of                        On October 19, after the employees interviewed
HPI: Mitch Templeton, Shanda McCalib, and                            with Lazer Spot and were offered employment by
Michelle Thoms (the employees), who were each                        it, Dana Hill, the operations manager for HPI,
hired to work as gate clerks/dock hands1 for                         telephoned Jerry Edwards, the vice president of
Arnold Transportation Company (Arnold) at the                        operations for Lazer Spot. Hill advised Edwards
Campbell’s Soup plant in Paris, Texas, in 2010,2                     that the employees were subject to employment
pursuant to Arnold’s contract with Campbell’s                        contracts with HPI. Although Edwards indicated
Soup to supply employees for these positions. The                    that he then requested that Hill send him a copy of
employees signed contracts with HPI wherein                          the contracts, Hill did not do so. According
1
    Employees are periodically referred to in the record as gate clerks, dock clerks, or dock hands. As gate clerks/dock hands, the
employees were responsible for checking in trucks when they arrived at the plant, checking in with truck drivers, gathering information,
and entering certain data into a computer system. HPI’s job description for the gate clerks/dock hands indicates the position is akin to
that of a warehouse worker.
2
  The employees were hired to perform yard management services required by Arnold pursuant to a contract between Arnold and
Campbell’s Soup.
3
    HPI does not contend that Lazer Spot took any improper action in connection with bidding for and obtaining the services contract.
4
    The applications were dated October 14 and October 19. Each application indicated that the applicant was currently employed by HPI.
5
   HPI was unaware that Arnold’s contract with Campbell’s Soup was about to expire and that Lazer Spot was awarded the successor
services contract.
                                                                                                                         Page 5 of 14
                                    387 S.W.3d 40, *44; 2012 Tex. App. LEXIS 8780, **5



 [**5] to Hill, Edwards did not ask to see a copy   Lazer Spot would pay a reasonable amount to
of the contracts, even after she indicated her belief
                                                    settle the lawsuit. According to Lesh, McCurtain
that the employees would breach their contracts     indicated that Lazer Spot would not pay any
and that Lazer Spot would be assisting in that      substantial amount to settle, but inquired whether
breach if it hired the employees.                   Lazer Spot’s termination of the employees would
                                                    be an acceptable alternative to HPI. HPI did not
On October 23, Lazer Spot received a letter (dated find this alternative acceptable.8
October 21) from HPI’s counsel, Larry Lesh,
demanding that Lazer Spot cease its interference On January 23, Lazer Spot filed a motion for
with the employment contracts between HPI and summary judgment wherein it alleged [*45] that
its employees. The letter neither described the it had engaged in no tortious interference with
contractual obligations owed HPI by the HPI’s contracts because the post-employment
employees, nor included a copy of the referenced restrictive covenants [**7] are unenforceable as a
contracts. Because counsel for Lazer Spot was matter of law, and the unenforceability of those
hospitalized shortly after the letter was received, covenants is a valid and absolute defense to HPI’s
no immediate response was made.                     tortious interference claim. Lazer Spot alleged in
                                                    its motion (and re-urges on appeal), that the
On November 2, Lazer Spot commenced its covenants not to compete are unenforceable
operations at the Campbell’s Soup plant and the because there was no legally enforceable
employees began work for Lazer Spot ″around consideration promised or provided to the
this time.″6 Having received no reply to its employees that would support those promises. In
October 21 letter, HPI filed suit against Lazer addition, Lazer Spot alleged that HPI has no
Spot on November 3, alleging that Lazer Spot protectable interest because the employees are
tortiously interfered with HPI’s employment dock hands who engage in a common calling.
contracts with the employees, seeking actual and Finally, Lazer Spot claimed the covenants are
exemplary damages.                                  unenforceable because they are overly broad.9

On November 18 (after having been served                           HPI filed a competing motion for summary
 [**6] with the lawsuit) Rhonda McCurtain, vice                    judgment, contending Lazer Spot tortiously
president of human resources and general counsel                   interfered with the employment contracts between
for Lazer Spot, called Lesh. According to                          HPI and its employees, entitling HPI to damages
McCurtain, she unconditionally offered to                          and declaratory relief, citing authority it maintains
terminate the employment relationships of the                      supports the proposition that a contract for at-will
employees so that HPI could rehire them.7                          employment is subject to interference. It contended
McCurtain states that Lesh rejected this offer,                    that Lazer Spot interfered with the employment
indicating that HPI did not want to rehire the                     contracts with full knowledge of their existence
employees. Lesh claims that during the telephone                   and [**8] that such interference was willful and
conversation with McCurtain, he inquired whether                   intentional, causing HPI damages in the aggregate
6
    The affidavit of Hill indicates that the employees terminated their employment with HPI on October 31.
7
    McCurtain also requested copies of the employment contracts. Lesh indicated that he would refer the request to HPI, but did not
believe it would be a problem.
8
    McCurtain received copies of the employment contracts on November 24.
9
    Lazer Spot further claimed that it was unaware of the employees’ contractual obligations, and hence there could be no tortious
interference.
                                                                                                                    Page 6 of 14
                                     387 S.W.3d 40, *45; 2012 Tex. App. LEXIS 8780, **8



amount of $47,684.83 as of December 31, 2011,                        covenants are unlawfully broad with regard to the
with damages continuing to accrue thereafter for                     scope of activity they purport to restrain. Because
so long as employees were employed by Lazer                          we find the noncompetition covenants are not
Spot.                                                                supported by consideration, we need not address
                                                                     the argument regarding their scope or breadth.
On March 12, the trial court entered its final
summary judgment denying Lazer Spot’s motion                         Lazer Spot further contends (apart from any issue
for summary judgment and granting HPI’s motion                       relating to the noncompetition agreements) that
for summary judgment. The judgment awarded                           the trial court erred in denying its motion for
HPI damages it requested in the amount of                            summary judgment [*46] (and in granting HPI’s
$47,684.83, representing damages caused by Lazer                     motion) because there was no tortious interference
Spot through December 31, 2011, and further                          with the employees’ contracts, claiming the mere
declared that the liability of Lazer Spot to HPI                     act of hiring an at-will employee who works for
″shall continue from and after December 31, 2011                     another is not tortious as a matter of law. We
for so long as Mitchell Templeton, Shanda                            agree.10
McCalib and Michelle Thoms remain employees
of Defendant Lazer Spot.″ This appeal ensued.                        IV. Analysis

II. Standard of Review                                               A. The Noncompetition Agreements Are
                                                                     Unenforceable
HN1 ″When both sides move for summary
                                                   Lazer Spot initially maintains that the trial court
judgment, as they did here, and the trial court
                                                   erred in failing to grant its motion for summary
grants one motion and denies the other, reviewing
                                                   judgment—and            in      granting      HPI’s
courts consider both sides’ summary-judgment
                                                   motion—because the noncompetition agreements
evidence, determine all questions presented, and
                                                   between HPI and its employees are unenforceable
render the judgment the trial court should have
                                                   as a matter of law. Because ″covenants not to
rendered.″ Gilbert Tex. Constr., L.P. v.
                                                   compete which are unreasonable restraints of
Underwriters at Lloyd’s London, 327 S.W.3d 118,
                                                   trade and unenforceable on grounds of public
124 (Tex. 2010) (citing Embrey v. Royal Ins. Co.
                                                   policy cannot form the basis of an action for
of Am., 22 S.W.3d 414, 415-16 (Tex. 2000)).
                                                   tortious interference,″ Lazer Spot contends there
III. [**9] Appellate Issues                        is no tortious interference. Juliette Fowler Homes,
                                                   Inc. v. Welch Assocs., 793 S.W.2d 660, 665 (Tex.
Lazer Spot’s primary appellate point is based on 1990).
the premise that its motion for summary judgment
should have been granted because the HN2 The Covenants Not to Compete Act governs
noncompetition covenants were not enforceable the enforceability of noncompetition agreements.
as a matter of law. In support of this contention, TEX. BUS. & COM. CODE ANN. §§ 15.50-.52 (West
Lazer Spot argues that HPI did not provide 2011). The enforceability of a covenant not to
consideration to the employees in exchange for compete is a question of law. Mann Frankfort
their purported agreement to be bound by the Stein & Lipp Advisors, Inc. v. Fielding, 289
covenants not to compete, and the noncompetition S.W.3d 844, 848 (Tex. 2009). We review the trial
10
    Lazer Spot raises additional appellate issues, including claims of justification in hiring the employees and of estoppel, the trial
court’s [**10] failure to strike HPI’s first amended petition and certain summary judgment evidence, together with various complaints
regarding the damage award included in the judgment. Our reversal of the trial court’s judgment in favor of HPI renders these issues
moot.
                                                                                                                        Page 7 of 14
                           387 S.W.3d 40, *46; 2012 Tex. App. LEXIS 8780, **11



 [**11] court’s determinations of questions of law The covenant in question provides:
on a de novo basis. Barber v. CO Indep. Sch.
Dist., 901 S.W.2d 447, 450 (Tex. 1995).                    [*47] I [**13] agree not to seek
                                                         employment on a temporary, contract or
Section 15.50 provides in relevant part:                 permanent basis at any company where
                                                         introduced by Hiring Partners, Inc. for a
    HN3 Notwithstanding Section 15.05 of                 period of ninety (90) days. I will not seek
    this code, and subject to any applicable             to induce any client to call other temporary
    provision of Subsection (b), a covenant              or contract agencies for their temporary,
    not to compete is enforceable if it is               permanent or project assignments. This
    ancillary to or part of an otherwise                 means that I will not knowingly inform
    enforceable agreement at the time the                other services of Hiring Partners, Inc.
    agreement is made to the extent that it              clients and/or rates charged at these client
    contains limitations as to time,                     companies. Nor will I discuss my hourly
    geographical area, and scope of activity to          rate with other individuals working for
    be restrained that are reasonable and do             Hiring Partners, Inc. nor other temporary
    not impose a greater restraint than is               or employment agencies.
    necessary to protect the goodwill or other
                                                         Hiring Partners, Inc. realizes that clients
    business interest of the promise.
                                                         may seek help from other temporary or
TEX. BUS. & COM. CODE ANN. § 15.50(a).                   employment agencies and, that I may also
                                                         be called upon by another agency to fill
Lazer Spot contends the noncompetition
                                                         other positions; however, I may not accept
agreements are unenforceable because they are
                                                         an assignment through another agency for
not ″ancillary to or part of’ an otherwise
                                                         a period of ninety (90) days at a firm/
enforceable agreement as required under Section
                                                         company that applicant has been
15.50. HN4 The requirement of an ″otherwise
                                                         introduced to by Hiring Partners, Inc.
enforceable agreement″ is satisfied when the
covenant is part of an agreement which contains          Hiring [**14] Partners, Inc. reserves the
mutual, nonillusory promises. Marsh USA, Inc. v.         right to replace a candidate working on
Cook, 354 S.W.3d 764, 773 (Tex. 2011). An                assignment at its own discretion, without
″otherwise enforceable″ agreement ″can emanate           this signed agreement being altered in any
from at-will employment so long as the                   way and considers such to remain in effect
consideration [**12] for any promise is not              for a period of ninety (90) days from the
illusory.″ Alex Sheshunoff Mgmt. Servs., L.P. v.         date last worked by applicant.
Johnson, 209 S.W.3d 644, 648 (Tex. 2006). A
noncompetition agreement must be supported by All contracts specify that employment is
consideration to be enforceable. Id. at 651; ″employment at will,″ meaning that either HPI or
DeSantis v. Wackenhut Corp., 793 S.W.2d 670, the employee ″can terminate the employment
681 n.6 (Tex. 1990). ″Consideration for a relationship at any time, with or without cause,
noncompet[ition] that is reasonably related to an with or without notice.″
interest worthy of protection, such as trade secrets, There is no recitation of consideration in the
confidential information or goodwill, satisfies the contracts. The contracts identify neither
statutory nexus.″ Marsh, 354 S.W.3d at 775. Here, confidential, proprietary, or trade secret
Lazer Spot contends there was no consideration information to be divulged, nor any goodwill or
given to enforce the noncompetition agreements. specialized training to be provided the employees
                                                                                          Page 8 of 14
                                     387 S.W.3d 40, *47; 2012 Tex. App. LEXIS 8780, **16



in consideration for signing the contracts. The                        . . was to expand rather than restrict the
only implied consideration11 is illusory—the                           enforceability of such covenants″ and ″[t]he Act
consideration of at-will employment. This is                           provides that ’goodwill’ is a protectable interest.″
insufficient. See, e.g., Martin v. Credit Protection                   Marsh, 354 S.W.3d at 775-77.
Ass’n, 793 S.W.2d 667, 669 (Tex. 1990) (holding
                                                                       HPI relies on Hill’s testimony that the
HN5 employment agreement consisting entirely
                                                                       noncompetition agreements [**17] were designed
of covenant not to compete unenforceable because
                                                                       to protect HPI’s goodwill:
covenant ″must be supported by valuable
consideration″); Sheshunoff, 209 S.W.3d at 651.12                           Q. Can you identify for the judge or the
                                                                            jury what was the interest that Hiring
Likewise, the record fails to disclose the existence
                                                                            Partners was seeking to protect through
of any such consideration. Hill was asked whether
                                                                            this 90-day clause?
there is ″any confidential information [**16] that
you can identify for the judge or jury that Hiring        A. It’s the nature of our business. If we
Partners provided to these employees as a part of         don’t have some rules to follow, then we
their employment with Hiring Partners?″ Her               could present employees, to clients all day
response was ″No.″ In addition, Hill testified that       long every day and they could just hire
because she could not identify any confidential or        them on their own. We would be out of
proprietary information given to the employees,           business if we did not have guidelines to
she could not [*48] identify any steps HPI took           go by.
to ensure that such information remained
                                                      While Marsh does find that HN7 goodwill is a
confidential.13
                                                      protectable interest, goodwill does not encompass
HPI responds that ″[c]onsideration for a guidelines that prevent the business from ceasing
noncompetition that is reasonably related to an to exist (although some goodwill is generally
interest worthy of protection, such as trade secrets, necessary for that aim).14 Marsh further requires
confidential information or goodwill, satisfies the consideration to support a noncompetition
statutory nexus″ because ″the purpose of the Act . agreement.
11
    HN6 Where the nature of the employment requires the employer to furnish the employee [**15] with confidential information, the
employer impliedly promises to provide that information and that implied promise is sufficient consideration to support a covenant not
to compete. Fielding, 289 S.W.3d at 852.
12
     Where an employer in an at-will employment agreement agrees to provide confidential information or other consideration to an
employee, a reciprocal promise by the employee not to use the confidential information in competition with the employer may not be
immediately enforceable because the employer’s promise is illusory because he could terminate the employee before any confidential
information is shared. But, once the employer fulfills the promise to divulge the confidential information, the contract becomes
enforceable and may support a covenant not to compete. See Sheshunoff, 209 S.W.3d at 648-49. Thus, a covenant not to compete is not
unenforceable under the Act solely because the employer’s promise is executory when made. Id. at 655. Here, there is no allegation or
claim that employees were, at any time, provided confidential information.
13
    Hill generally described the training provided to HPI employees as ″vibes in the workplace training; harassment training; safety in
the workplace; back protection; hearing protection; fire safety; lock out, tag out instructions; forklift safety.″ She could not recall the
specific training given to any of the employees.
14
     ″Goodwill″ is defined as:

       the advantage or benefits which is acquired by an establishment beyond the mere value of the capital stock, funds or
       property employed therein, in consequence of the general public patronage and encouragement which it receives from
       constant and habitual customers on account of its local position, or common celebrity, or reputation for skill, or influence,
       or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities [**18] or
                                                                                                                            Page 9 of 14
                                     387 S.W.3d 40, *48; 2012 Tex. App. LEXIS 8780, **17



In Marsh, the employer’s managing director,                           covenants against [**19] employment by others
Cook, was granted the option to purchase shares                       in controversy here were necessary to protect its
of stock in the Marsh entity pursuant to an                           goodwill; Marsh involved a managing director
incentive plan. When the option was nearing                           who was successful in achieving and attracting
expiration, Cook exercised his right to purchase                      business for the company, these long-term
company stock. In conjunction with the purchase,                      relationships being vitally important in the
Cook agreed that in the circumstance he left                          insurance brokerage [*49] industry. Id. at 776-77.
Marsh within three years, he would neither                            The consideration for the protection of business
compete with Marsh nor solicit its employees.                         goodwill was reasonably related to that protection.
Cook also agreed that he would maintain the                           In contrast with Marsh, the employees here were
confidentiality of Marsh’s confidential information                   blue collar workers15 who signed noncompetition
and trade secrets. Id. at 767. After leaving Marsh,                   agreements in the absence of consideration.16
Cook was sued for violating the covenant not to
                                                                      Because the [**21] restrictive covenants here
compete.
                                                                      were not supported by consideration independent
The Texas Supreme Court concluded that the                            of the simple act of hiring under an at-will
noncompetition        provision      satisfied   the                  agreement, they are not ″ancillary to or part of″ an
requirements of the Act. Id. at 780. In doing so, it                  otherwise enforceable agreement under Section
recognized that the award of stock options ″linked                    15.50. TEX. BUS. & COM. CODE ANN. § 15.50(a).
the interests of a key employee with the company’s                    HN9 Those ″covenants not to compete which are
long-term business interests.″ Id. at 777. In                         unreasonable restraints of trade and unenforceable
addition, ″[o]wners’ interests are furthered by                       on grounds of public policy cannot form the basis
fostering the goodwill between the employer and                       of an action for tortious interference.″ Juliette
its clients″ and ″stock options are reasonably                        Fowler Homes, 793 S.W.2d at 665. Thus,
related to the protection of this business goodwill.″                 unenforceability of a noncompetition covenant is
Id.                                                                   a valid defense to a claim of tortious interference.
                                                                      Id.;17 see also Travel Masters, [*50] Inc. v. Star
Marsh does not support HPI’s claim that the                           Tours, Inc., 827 S.W.2d 830, 833 (Tex. 1991),
       prejudices.

 Marsh, 354 S.W.3d at 777-78.
15
    The employees were responsible for checking in trucks, gathering information, and entering data into a computer system. HPI’s job
description for the gate clerks/dock hands says the job is akin to that of a warehouse worker. Lazer Spot thus contends that because the
employees’ positions only entailed generic work skills, this basic knowledge does not implicate a protectable interest under Texas law.
See Evan’s World Travel, Inc. v. Adams, 978 S.W.2d 225, 231 (Tex. App.—Texarkana 1998, no pet.) (HN8 general skills and knowledge
developed through course of employment not type of interest which justifies protection under restrictive covenant). There is no evidence
 [**20] the employees received specialized training. When asked if HPI provided employees any training for the specific tasks they were
to perform at Campbell’s Soup, Jones stated that she had no idea.
16
     In addition to Marsh, HPI cites a number of cases from other jurisdictions finding disintermediation—a diversion of a company’s
business by eliminating the middleman—to be an interest worthy of protection. See, e.g., Volt Servs. Grp. v. Adecco Emp’t Servs., 178
Ore. App. 121, 35 P.3d 329, 334 (Ore. App. 2001) (contacts between employer’s employees and its customers can create protectable
interest when nature of contact is such that there is substantial risk employee may be able to divert all or part of customer’s business);
see also Aerotek, Inc. v. Burton, 835 So.2d 197 (Ala. Civ. App. 2001) (employer had interest in protecting itself from disintermediation);
Borg-Warner Protective Servs. Corp. v. Guardsmark, Inc., 946 F.Supp. 495 (E.D. Ky. 1996) (″disintermediation″ worthy of protection
where considerable time, effort, and money spent in training employees). In light of Texas’ statutory restrictions governing the
enforceability of noncompetition agreements, we do not find this authority persuasive.
17
     In Juliette Fowler Homes, Fowler, a nonprofit organization, entered into a fund-raising contract with Welch, whereby Welch agreed
                                                                                                                         Page 10 of 14
                                     387 S.W.3d 40, *50; 2012 Tex. App. LEXIS 8780, **21



superseded by statute on other grounds as stated                       that the only portions of the contracts HPI alleges
in Sheshunoff, 209 S.W.3d at 653 n.5. Therefore,                       were violated are the noncompetition covenants.
to the extent HPI’s tortious interference claim is                     When asked what part of the agreement the
premised on breach of the noncompetition                               employees violated, Jones pointed to the following
agreements, such claim cannot stand. HPI                               language, ″I may not accept an assignment through
contends, however, that tortious interference exists                   another agency for a period of 90 days, at a
here, independent of any issue relating to the                         firm/company that applicant has been introduced
noncompetition agreements.                                             to by Hiring Partners.″ Jones further explained,
                                                                       ″[T]he contractual obligation is . . . that the
B. The Mere Hiring of an at-Will Employee                              employee cannot go to a company where we have
 [**24] Cannot, Without More, Give Riseto a                            introduced them. So that is what is in violation.
Tortious Interference Claim                                            They are certainly at-will employee[s] [**25] and
                                                                       can go to anybody else but some place where
HPI relies on Sterner v. Marathon Oil Co., 767
                                                                       we’ve introduced them to, because that’s our
S.W.2d 686, 689 (Tex. 1989), to claim that even
                                                                       business.″ Lazer Spot seeks to hold HPI to this
though the employment contracts were
                                                                       testimony and restrict the tortious interference
terminable-at-will, they are nevertheless subject
                                                                       issue to the noncompetition clause.18 In doing so,
to a cause of action for tortious interference. See
                                                                       Lazer Spot prevails, because the noncompetiton
also Crouch v. Trinque, 262 S.W.3d 417, 425-26
                                                                       clause is unenforceable and thus will not support
(Tex. App.—Eastland 2008, no pet.) (cause of
                                                                       a tortious interference claim.
action exists ″for tortious interference with a
contract of employment terminable at will″).                           In its second point, Lazer Spot contends that when
Lazer Spot’s response to this argument is two-fold.                    stripped of any protection the subject
The first part of Lazer Spot’s argument zeroes in                      noncompetition agreements might otherwise
on the fact that Jones (HPI’s president) testified                     provide, the remaining contract is nothing more
to conduct a fund-raising [**22] campaign for the benefit of Fowler. Welch contracted with Butler to help execute the Fowler
fund-raising campaign. The contract between Welch and Butler contained a covenant not to compete which bound Butler not to ″enter
into any form of contract for services″ with any of Welch’s clients for a period of two years after the conclusion of the Butler-Welch
contract. Juliette Fowler Homes, 793 S.W.2d at 661. Thereafter, Fowler terminated its contract with Welch. Butler also terminated its
contract with Welch. Butler was then hired by NBA, one of whose agencies is Fowler. Butler was assigned to work with Fowler, and
to supervise its fund-raising campaign. As a result, Welch sued Fowler, alleging breach of the Welch-Fowler contract and further alleging
breach of the noncompetition clause. Welch also sued Butler for breach of the noncompetition clause of the Butler-Welch contract and
for tortious interference with Welch’s contractual relations with Fowler.
The jury found that Butler breached the noncompetition clause of the Butler-Welch contract by accepting the position with NBA. The
court found that the noncompetition clause was unenforceable and that Welch could therefore not recover for [**23] Butler’s breach
of the Butler-Welch contract (the clause contained no limitations concerning geographical area or scope of activity).

The jury found that Fowler tortiously interfered with Welch’s contractual relationship with Butler. Fowler argued that the noncompetition
clause in the Butler-Welch contract was an unreasonable restraint of trade and unenforceable on the grounds of public policy. Fowler
therefore claimed that its actions ″inducing″ Butler to accept the position with NBA cannot support a judgment for tortious interference.
The Texas Supreme Court indicated that ″this argument presents the narrow issue of whether the unenforceability of the noncompetition
clause in the Butler-Welch contract is a defense to Welch’s action against Fowler for tortious interference with contractual relations.″ Id.
at 664. After determining that the unenforceability of the noncompetition clause was a defense to Welch’s tortious interference claim,
the court held ″that covenants not to compete which are unreasonable restraints of trade and unenforceable on grounds of public policy
cannot form the basis of an action for tortious interference.″ Id. at 665.
18
    HPI’s original petition alleges, ″[T]he willful and malicious acts and conduct of Lazer Spot described above constitute tortious and
unlawful interference with the contracts of employment between HPI and employees of HPI.″ While the petition never mentions the
noncompetition clauses, it does describe the recruiting and testing of employees and their placement with Arnold.
                                                                                                                           Page 11 of 14
                                     387 S.W.3d 40, *50; 2012 Tex. App. LEXIS 8780, **25



than the written memorialization of a common                           terminate its at-will contract with Sterner. Id. at
law at-will employment relationship. Proceeding                        691.
from that premise, Lazer Spot says that the mere
hiring of an at-will worker who is currently                           While Sterner appears to be at odds with ACS
employed by another, does not constitute                               Investors, it has been postulated [**28] that an
actionable interference.                                               explanation for this apparent inconsistency is the
                                                                       fact that
     [*51]      HPI does not concede the
     [**26]    noncompetition agreements are                                Marathon’s contract with Sterner’s
unenforceable; even so, they place great reliance                           employer specifically yielded all
on Sterner and its progeny. However, the holding                            managerial decisions to the employer.
in Sterner is limited: at-will contracts are protected                      Marathon induced the employer to do
from tortious interference.19 Lazer Spot contends                           what it had a right to do (i.e., terminate at
it is not tortious interference to induce a contract                        will). In this case, however, Marathon
obligor to do what it has a right to do. In ACS                             breached its contract with Sterner’s
Investors, Inc. v. McLaughlin, 943 S.W.2d 426,                              employer by making a demand that
430 (Tex. 1997), the high court recognized that                             violated     the      terms        of    the
″[o]rdinarily, merely inducing a contract obligor                           Marathon-employer                 agreement.
to do what it has a right to do is not actionable                           Marathon’s acts violated its agreement
interference.″ After this quote, the Texas Supreme                          with Sterner’s employer and thus exceeded
Court signaled, ″but cf. Sterner v. Marathon Oil                            its right to interfere with the contract
Co., 767 S.W.2d 686 (Tex. 1989).″ Id. HPI contends                          between Sterner and his employer.
that by preceding the citation of Sterner with the
″but cf.″ signal, the high court signified that the                    Sean Farrell, Applying Tortious Interference
quoted statement in ACS Investors was                                  Claims to at-Will Contracts, 39 TEX. J. BUS. L.
inapplicable to Sterner which, unlike ACS                              527, 532 (Winter 2004) (footnotes omitted)
Investors, involved tortious interference with an                      (citations omitted). If one accepts this distinction,
employment relationship.                                               it does not follow that ACS Investors is necessarily
                                                                       at odds with Sterner.
In Sterner, an employee of Marathon (Sterner)
prevailed in a suit against Marathon following an                      Additional authority cited by HPI does not support
accident. Sterner, 767 S.W.2d at 688. Sterner then                     its position that an at-will employee cannot be
took a job with a different company at a drilling                      induced to do what he otherwise has a right to do
site. Sterner’s new employer was under contract                        (i.e., terminate employment at any time). For
with Marathon. When a Marathon supervisor                              example, in Crouch, the tortious interference
noticed Sterner on the job site, he instructed                         claim was based on allegedly defamatory
Sterner’s new employer to fire Sterner. Id. The                        comments that led to termination of the plaintiff’s
high court held that it was tortious interference for                  at-will employment. Summary [**29] judgment
Marathon to induce Sterner’s employer to                               on the tortious interference claim was upheld
19
     HPI suggests that Juliette Fowler Homes did not modify Sterner because it did not involve an employment contract. We disagree.
Sterner held that the terminable-at-will status of a contract is no defense to an action for tortious interference with its performance.
 [**27] Sterner, 767 S.W.2d at 689. Fowler recognized that HN10 ″even an unenforceable contract may serve as the basis for a tortious
interference claim if the contract is not void,″ and emphasized that ″mere unenforceability of a contract is not a defense to an action for
tortious interference with its performance.″ Juliette Fowler Homes, Inc., 793 S.W.2d at 664. The court then created an exception to the
general rule and held that a tortious interference claim may not be grounded on a contract that was ″void or illegal,″ or where there is
″any public policy opposing its performance.″ Id. at 664-65.
                                                                                                                          Page 12 of 14
                                      387 S.W.3d 40, *51; 2012 Tex. App. LEXIS 8780, **29



because the affirmative [*52] defense of                                 at her retail location. The Mary Kay consultants
justification was not pled. Crouch, 262 S.W.3d at                        were required to sign an agreement with Mary
426. The remaining authority20 cited by HPI in                           Kay to only sell directly to the [*53] consumer.
support of its contention that at-will employment                        Graham maintained that because the consultants
is subject to tortious interference likewise involved                    were at-will employees, it was not tortious
claims based on allegedly defamatory comments                            interference to induce them to transact business
regarding the plaintiff, which resulted in the                           with her. Graham did not induce the consultants to
plaintiff’s termination of employment.21 In each                         leave their employment. ″The [**33] object of the
of these cases, a third party allegedly interfered,                      interference was . . . not in inducing a switch in
and the plaintiff was fired. In this case, however,                      contractual relations, but in exploiting contractual
the employees quit their jobs, as they had every                         relations to Graham’s benefit (and Mary Kay’s
right to do. There is no evidence of wrongful                            detriment).″ Id. at 754. Because Graham induced
conduct by Lazer Spot, such as defamation or                             the consultants to do something they had no right
breach of an obligatory contractual provision.22                         to do under their contracts with Mary Kay, she
                                                                         tortiously interfered with those contracts. Id.
Graham v. Mary Kay Inc., 25 S.W.3d 749 (Tex.
App.—Houston [14th Dist.] 2000, pet. denied),                            HN13 Outside of the realm of allegedly
highlights the distinction between inducing                              defamatory statements made by third parties that
someone to terminate at-will employment and                              result in termination of at-will employment (where
interfering with at-will employment contracts. In                        inducement is apparently tortious because it is
that case, Graham appealed an injunction                                 accomplished via defamation), other actionable
preventing her from selling Mary Kay cosmetics                           interference appears to hinge on violation of a
20
    De Mino v. Chu, No. 01-03-01127-CV, 2005 Tex. App. LEXIS 7323, 2005 WL 2123537 (Tex. App.—Houston [1st Dist.] Aug. 31,
2005, pet. denied) (mem. op.); Armijo v. Mazda Int’l, No. 14-03-00365-CV, 2004 Tex. App. LEXIS 4765, 2004 WL 1175335 (Tex.
App.—Houston [14th Dist.] May 27, 2004, pet. denied) (mem. op.); Albertsons. Inc. v. Hufnagle, No. 05-01-00573-CV, 2002 Tex. App.
LEXIS 6200, 2002 WL 1964236 (Tex. App.—Dallas Aug. 26, 2002, no pet.) (not designated for publication).
21
     Based on this authority, Lazer Spot takes the position that there must be some [**30] independent misconduct (other than the mere
loss of at-will employment) before tortious interference may be considered. The Texas Supreme Court has held that HN11 to establish
liability for interference with a prospective contractual or business relation, the plaintiff must prove that it was harmed by the defendant’s
conduct that was either independently tortious or unlawful. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 713 (Tex. 2001).
22
     HN12 A party seeking to establish tortious interference with a contract must prove four elements: (1) that a contract subject to
interference exists; (2) that the alleged act of interference was willful and intentional; (3) that the willful and intentional act proximately
caused damage; and (4) that actual damage or loss occurred. A defendant may defeat a tortious interference claim on summary judgment
by disproving one element of the claim as a matter of law. Powell Indus., Inc. v. Allen, 985 S.W.2d 455 (Tex. 1998); Archives of Am.,
Inc. v. Archive Litig. Servs., Inc., 992 S.W.2d 665, 666-67 (Tex. App.—Texarkana 1999, pet. denied). The disputed element here is that
of ″willful and intentional″ interference. To establish a willful and intentional act of [**31] interference, there must be evidence that
the defendant was more than a willing participant—the defendant must have knowingly induced one of the contracting parties to breach
its obligations under a contract. Funes v. Villatoro, 352 S.W.3d 200, 213 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).

To support its claim of ″willful and intentional″ interference, HPI contends that despite Lazer Spot’s claimed lack of knowledge of the
ninety-day clause (there is no evidence Lazer Spot knew about the ninety-day clause when it hired the employees on October 19), Lazer
Spot was fully aware that employees were employed by HPI at the time it hired them because: (1) the employment applications listed
HPI as the current employer, giving Lazer Spot actual notice of the status of those applicants as employees of HPI; and (2) on October
19, the date the employees were interviewed and offered employment, Hill advised Edwards that the employees were ″under contract″
with HPI and that Lazer Spot ″would be assisting them in breaching the contract if″ Lazer Spot hired them. Hill admits the telephone
conversation with Edwards took place after Lazer Spot interviewed the employees and offered them employment. [**32] Further, Lazer
Spot contends there is no evidence it was aware of any of the employees’ contractual obligations when it hired them, and HPI provided
no evidence to prove otherwise. We agree. Even if Lazer Spot was aware of the contractual provisions between HPI and its employees,
nothing in those contracts prevented Lazer Spot from hiring the employees.
                                                                                                                              Page 13 of 14
                                     387 S.W.3d 40, *53; 2012 Tex. App. LEXIS 8780, **33



contractual provision, other than the at-will     Because the noncompetition covenants in this
provision. See Sterner, 767 S.W.2d at 691         circumstance are unenforceable, and because there
(Marathon not justified to interfere because      is otherwise no tortious interference with the
directive to fire Sterner exceeded terms of       contracts between HPI and the employees, we
Marathon-employer agreement); Graham, 25          reverse the judgment of the trial court. Further,
S.W.3d at 754 (breach of direct sales clause in   because Lazer Spot was entitled to summary
employees’ agreements with Mary Kay).             judgment as a matter of law, we render judgment
                                                  in favor of Lazer Spot. Lazer Spot is not, however,
Because HN14 a claim of tortious interference entitled to recover attorney’s fees and court costs.24
cannot be premised merely on the hiring of an
                                                  /s/ Bailey C. Moseley
at-will employee, without more, summary
judgment was improperly granted on the claim of Bailey C. Moseley
tortious interference with contractual relations; Justice
the employees were within their rights [**34] to
                                                  Date Submitted: September 26, 2012
terminate employment with HPI at any time.23
                                                  Date Decided: October 18, 2012
V. Conclusion




23
    If the mere hiring of an at-will employee, without more, were sufficient to support a claim of tortious interference, the economy in
the State of Texas would soon grind to a halt.
24
     Lazer Spot claims that it should have been awarded attorney’s fees as a part of its summary judgment, pursuant to Section 15.51(c)
of the Texas Business and Commerce Code:

      HN15 If the primary purpose of the agreement to which the covenant is ancillary is to obligate the promisor to render
      personal services, the promisor establishes that the promise knew at the time of the execution of the agreement that the
      covenant did not contain limitations as to time, geographical area, and scope of activity to be restrained that were reasonable
       [**35] and the limitations imposed a greater restraint than necessary to protect the goodwill or other business
      interest of the promise, and the promise sought to enforce the covenant to a greater extent than was necessary
      to protect the goodwill or other business interest of the promise, the court may award the promisor the costs,
      including reasonable attorney’s fees, actually and reasonably incurred by the promisor in defending the action
      to enforce the covenant.

 TEX. BUS. & COM. CODE ANN. § 15.51(c). HN16 The foregoing provision permits the ″promisor″ to recover costs and reasonable
 attorney’s fees, in certain circumstances. Because the express language of the statute does not apply here, Lazer Spot is not entitled
 to attorney’s fees under Section 15.51(c). TEX. BUS. & COM. CODE ANN. § 15.51(c); see Glattly v. Air Starter Components, Inc., 332
 S.W.3d 620, 645 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) (Covenants Not to Compete Act does not permit employers to
 recover their attorney’s fees in suits to enforce their rights under the Act). We find no authority to support the proposition that a third
 party, such as Lazer, Spot, is entitled to attorney’s fees pursuant to this section of the [**36] statute.
                                                                                                                            Page 14 of 14
