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To view video stories on diverse topics, visit www. Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.
Private Securities Litigation Reform Act of SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. All rights reserved. Log in. E-mail Password Show password. Sign up. New member. English USA. English UK. English Canada. Deutsch Deutschland. Deutsch Schweiz. Nederlands Nederland. Latest News. Listed companies. Sector News. All Analysis. In March of , Callidus won the Aetna account from Trilogy, and the "Aetna project" whereby Callidus was to implement software to manage Aetna's agent compensation system was scheduled to begin in mid-April.
Although there is no evidence that Liu was involved in the sales effort to win this account, a team from Accenture involved with the planning for the project requested his assistance. One of the Accenture employees on the project was Saied Karamooz, the same Accenture consultant with whom Liu had worked on Aetna matters while at Trilogy.
Liu explained in his deposition that the team drew "a very clear line" whereby he would not be asked to divulge "anything which has anything to do with Trilogy software implementation. The e-mail requested Liu to "[t]ake a look at the attached files for some background on the project and on the ETL [extraction, transformation and loading] portion specifically.
This triggered additional work by Callidus personnel to address those issues. Liu was deposed on April 8, As of that time, he had not worked directly with Aetna personnel, but only with Accenture or Callidus employees. He described his job at Callidus as "deploy[ing] Callidus's software to an enterprise environment," which entailed understanding customer needs and how Callidus's software can best address those needs.
He denied that he would be involved in pre-selling activities or in writing source code to customize Callidus products to customer needs. On May 6 and 7, , Callidus and Liu each filed a motion for summary judgment as to all of Trilogy's claims. A hearing was held on May 28 before the Honorable Paul Davis. Judge Davis granted both motions at the conclusion of the hearing and signed an order to that effect on August Trilogy now appeals.
Trilogy asserts that the district court erred by granting summary judgment against each of its claims. It presents six issues whose controlling legal questions can be grouped as follows: 1 whether the non-compete agreement between Liu and Trilogy is enforceable; [2] 2 whether the evidence raises a fact issue as to whether Liu and Callidus have misappropriated Trilogy's trade secrets, or inevitably will; [3] and 3 whether the trial court properly granted summary judgment as to Trilogy's claims that Liu breached his contractual non-disclosure obligations and that Callidus tortiously interfered with those obligations.
Liu and Callidus each moved for summary judgment under both the traditional and no-evidence standards. The standards for review of a traditional summary judgment are well established: the movant must show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; in deciding whether there is a disputed material fact issue precluding summary judgment, the court must take evidence favorable to the nonmovant as true; and the court must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in the nonmovant's favor.
See Tex. A party seeking a no-evidence summary judgment must assert that no evidence exists as to one or more of the essential elements of the nonmovant's claims on which it would have the burden of proof at trial. Holmstrom v. Lee, 26 S. Once the movant specifies the elements on which there is no evidence, the burden shifts to the nonmovant to raise a fact issue on the challenged elements.
To raise a genuine issue of material fact, the nonmovant must set forth more than a scintilla of probative evidence as to an essential element of the nonmovant's claim on which the nonmovant would have the burden of proof at trial. See id. Havner, S. If the evidence supporting a finding rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions, then more than a scintilla of evidence exists. Less than a scintilla of evidence exists when the evidence is "so weak as to do no more than create a mere surmise or suspicion" of fact, and the legal effect is that there is no evidence.
Jackson v. Fiesta Mart, S. If the nonmovant fails to present evidence raising a genuine issue of material fact as to the challenged element, the trial court must grant the motion. A no-evidence summary judgment is essentially a directed verdict granted before trial, to which we apply a legal sufficiency standard of review.
Jackson, S. The district court did not state the basis for its decision in either of its orders granting summary judgment. When we review a summary judgment in which the trial court did not state the basis for its decision in its order, the appealing party must show that it is error to base summary judgment on any ground asserted in the motion. Star-Telegram, Inc. Doe, S. We must affirm the summary judgment if any one of the movant's theories has merit.
Because the propriety of a summary judgment is a question of law, we review the trial court's decision de novo. See Natividad v. Alexsis, Inc. The enforceability of a covenant not to compete is a question of law. Light v. Centel Cellular Co. Johnson, S. A covenant not to compete is a disfavored contract in restraint of trade and is unenforceable unless it meets certain statutory requirements. Code Ann. Those requirements are set forth in Section Section Second, the non-compete agreement must be ancillary to or part of that "otherwise enforceable agreement.
For the requisite "otherwise enforceable agreement," Trilogy points to Liu's non-disclosure obligations in the PIA. Under paragraph one of the PIA, Liu agreed to "keep all Proprietary Information in trust for the benefit of Trilogy," "never use any Proprietary Information, except as required by [his] duties to Trilogy," not to "discuss[ ] Proprietary Information, even in general terms, with persons outside Trilogy," and "to exercise diligence at all times to maintain the confidentiality of all confidential Proprietary Information and not disclose confidential Proprietary Information.
Liu and Callidus do not dispute that Liu's non-disclosure obligations under the PIA are enforceable, but dispute whether they were enforceable at the time the non-compete agreement was made, as required by Section This issue turns on the nature of the consideration that supports Liu's non-disclosure obligations. Like any contract, the PIA must be supported by consideration in order to be enforceable.
Sheshunoff, S. It consists of either a benefit to the promisor or a detriment to the promisee. Trilogy urges that the requisite consideration it provided in exchange for Liu's return promise not to disclose Trilogy's Proprietary Information was its "promise" under the PIA to provide Liu information and training. Proprietary Information and Liu and Callidus urge that Trilogy's "promise" to provide Liu information and training was illusory and thus unenforceable because Liu's employment was indisputably at-will.
Standing alone, an at-will employment relationship cannot constitute an "otherwise enforceable agreement" because neither the employer nor the employee are bound to continue the relationship; each is free to discontinue employment in lieu of performance.
Light, S. For the same reasons, an "otherwise enforceable agreement" cannot depend upon an additional period of at-will employment. Thus, as the supreme court observed in Light, an employer's promise of a raise to an at-will employee is illusory and unenforceable because the obligation is dependant upon a period of continued employment, which the employer could avoid by firing the employee.
Likewise, a promise whose performance is dependent upon continued at-will employment cannot serve as the consideration necessary to create a bilateral contract comprising an "otherwise enforceable agreement. Trilogy relies heavily on footnote 14 in Light for support of its proposition that its "promise" to give Liu access to confidential information and training in the future was sufficient consideration to support the non-disclosure agreement.
Trilogy misreads footnote The footnote states in pertinent part: "If an employer gives an employee confidential and proprietary information or trade secrets in exchange for the employee's promise not to disclose them, and the parties enter into a covenant not to compete, the covenant is ancillary to an otherwise enforceable agreement.
Footnote 14 thus contemplates not a bilateral contract, but a unilateral contract in which the employer's provision of confidential information comprises consideration for the employee's non-disclosure obligations. As the supreme court noted elsewhere in Light:. Allan Farnsworth, Contracts citations omitted ; see also Sheshunoff, S. The same happened here. Liu and Callidus do not dispute that Trilogy's provision of information and training as contemplated under the PIA gave rise to a unilateral contract binding Liu to his non-disclosure obligations under that agreement.
Trilogy urges in the alternative that this unilateral contract comprises the requisite "otherwise enforceable agreement at the time the agreement is made. It is undisputed that Trilogy provided the information and training not "at the time the agreement was made," but only at a later time.
Compass Bank, F. Furthermore, the ESA itself is a binding agreement made at the time the non-compete agreement was concurrently made within it. However, the question remains whether the non-compete agreement was ancillary either to the non-disclosure agreement or to the ESA at the time either agreement was made and whether there was any consideration for Liu's agreement in the ESA not to compete.
Under the ESA, Trilogy promised to pay Liu the equivalent of one month's salary in exchange for various promises by Liu, including his reaffirmation of his non-disclosure and non-compete promises. We find that although the ESA was an enforceable contract, it was not of the kind to which a non-competition agreement may be ancillary.
We again follow the supreme court's analysis in Light:. The court cited DeSantis v. Wackenhut Corp.
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