HOUSTON (Legal Newsline) - A Texas appeals court panel has reinstated a lawsuit by an employer who sued a former employee for violating a non-compete agreement.
A lower court dismissed the case, saying the employee was exempt from the suit under the Texas Citizens Participation Act. (TCPA)
The appeals court panel disagreed and reversed the trial court ruling.
The suit involved Lowfoot, a Canadian company that provides smart-meter data to consumers and retail energy providers. Shirley Rouse owned and operated McDavitt Group, LLC a Texas limited liability company that invested in Lowfoot. She agreed as part of a shareholder agreement not to work for any of Lowfoot’s competitors or disclose any confidential information about the company.
Rouse was later chosen to be Lowfoot’s president and was responsible for recruiting other investors.
She left Lowfoot in 2014 and two years later took a job with Innowatts, a competitor. She never told Lowfoot that she was working for Innowatts. But she kept her shares in Lowfoot and attended company shareholder and investor meetings.
She was also soliciting Lowfoot clients and “pitching products and ideas that she learned exclusively through Lowfoot’s investor and shareholder meetings,” the appeals court ruling said.
Lowfoot sued Rouse in 2018. Rouse moved to dismiss the case, arguing that the TCPA gave her the right to speak and associate freely. A trial judge dismissed the lawsuit by Lowfoot, which appealed, arguing that certain commercial speech is exempt from the TCPA.
One of the exempted forms of commercial speech are statements or actions involving “actual or potential customers of the defendant for the kind of goods or services the defendant provides.”
After leaving Lowfoot, Rouse targeted one of Lowfoot’s existing customers, the appeals court panel said April 7.
“We conclude that Lowfoot has established by a preponderance of the evidence that its lawsuit is exempt from the TCPA under the commercial-speech exemption,” the appeal court panel ruled.
Lowfoot Inc. v. McDavitt Group, LLC and Shirley Rouse, Court of Appeals for the First District of Texas, 01-18-01117-CV