HOUSTON (Legal Newsline) - A Texas appeals court panel has upheld a lower court’s “take nothing” ruling in a dispute between a fired executive and his company.
Thomas Malone was fired by Power Line Services, Inc. without a stated cause and also without severance pay. He sued and the company counter sued, claiming Malone misappropriated company trade secrets.
Neither side was awarded anything by the trial judge after a bench trial. The court ruled that Malone wasn’t entitled to severance pay because he refused to sign the company’s standard separation agreement. Also, PLS was not entitled to an injunction against Malone for allegedly misappropriating trade secrets, the judge ruled.
Both sides appealed. A Texas appeals court panel on April 7 upheld the trial judge.
Under his employment agreement, Malone was entitled a year of pay if he was fired without cause. But under the agreement, he would not receive severance pay if he failed to sign a “a general waiver and release of claims” on the company’s customary form. Malone refused to sign the standard form.
“Malone sought to add terms that would have altered the scope of the non-compete and confidentiality clauses in his original 2014 employment agreement,” the appeals court said.
In addition to working for PLS, Malone owned MMT, Inc., a business that performed building maintenance services on federal government properties, the appeals ruling said. Malone ran the businesses out of his PLS office and the company was aware of his sideline business.
However, when PLS saw that Malone’s company was offering utility service consulting work – the same service PLS offered, the company asked him to remove that from the MMT website and Malone complied.
However, under the standard severance agreement Malone would have prohibited from providing competing services with PLS during the year that he was receiving severance pay.
The appeal court also backed the trial court’s finding that PLS did not sufficiently prove that Malone was misappropriating trade secrets, based in part on Malone's own testimony.
“In a bench trial, the trial court is the fact finder and the sole arbiter of witness credibility,” the appeal court panel said. “The trial court was free to credit Malone’s testimony, and there was sufficient evidence in Malone’s testimony to support the trial court’s finding.”
Thomas Malone v. PLH Group, Inc. and Power Line Services, Inc. Texas Court of Appeals, First District, 01-19-00016-CV