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DeSantis v. Wackenhut Corp.

Supreme Court of Texas
793 S.W.2d 670 (1990)


Facts

Wackenhut Corporation (Wackenhut) (plaintiff) was a security-guard provider based in Florida. Wackenhut hired Edward DeSantis (defendant) to manage its Houston office. At that time, DeSantis signed a noncompetition agreement prohibiting him for competing with Wackenhut within a 40-county area for two years after his employment at Wackenhut ended. Additionally, the noncompetition agreement prohibited DeSantis from disclosing Wackenhut’s client list, or any confidential or proprietary information that DeSantis had acquired while a Wackenhut employee. Approximately three years later, DeSantis resigned from Wackenhut. DeSantis immediately created a company called Risk Deterrence, Inc. (RDI). RDI provided security consulting and security guards. DeSantis sent letters to several businesses notifying them of his new work with RDI. Approximately half of these letters went to Wackenhut clients with whom DeSantis had worked. The letters included a statement that DeSantis did not intend to interfere with any existing Wackenhut clients. Six months later, one of Wackenhut’s clients terminated its contract with Wackenhut and signed a contract with DeSantis. Another current Wackenhut client planned to do the same. Wackenhut sued DeSantis and RDI, seeking to enjoin them from violating DeSantis’s noncompetition agreement with Wackenhut and seeking damages. DeSantis and RDI filed counterclaims against Wackenhut for, among other things, fraudulent inducement to sign the noncompetition agreement. At trial, there was evidence that the Wackenhut clients who moved or planned to move to RDI were dissatisfied with Wackenhut’s services. There was no evidence that DeSantis developed business goodwill for Wackenhut. Wackenhut failed to show that it had proprietary pricing policies or bidding strategies, or that its customers and their needs could be identified only by someone in Wackenhut’s employ. A jury found that DeSantis had breached his noncompetition agreement with Wackenhut, and the trial court permanently enjoined DeSantis from competing with Wackenhut. However, the trial court narrowed the geographical scope of the covenant from 40 counties to 13. The court of appeals affirmed. The state supreme court granted certiorari to determine whether the noncompetition agreement was enforceable.

Rule of Law

Issue

Holding and Reasoning (Hecht, J.)

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