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holding that statements in superseded petition were not judicial admissions
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NO. 02-15-00077-CV
05-18-2017
JEREMY SANDERS APPELLANT v. FUTURE COM, LTD. APPELLEE
FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 096-265793-13 MEMORANDUM OPINION
See Tex. R. App. P. 47.4.
This is an employment contract dispute. After a bench trial, the trial court found that Appellant Jeremy Sanders breached a provision in his employment contract that required him, among other things, to reimburse Appellee Future Com, Ltd., his former employer, for any training that he received in the twelve months preceding his resignation from the company. The court also found that Sanders breached his employment contract by disclosing confidential company information. For these breaches, the trial court awarded Future Com actual damages and attorney's fees and permanently enjoined Sanders from disclosing certain information about Future Com's business.
Sanders argues on appeal that his employment contract did not require him to reimburse Future Com for training, that the trial court erred by permanently enjoining him from disclosing information that he either did not have or did not disclose, and that he, not Future Com, was entitled to attorney's fees. Because we hold that Sanders's employment contract required him to reimburse Future Com for any training costs it incurred in the twelve months prior to Sanders's resignation, that Future Com established its entitlement to permanent injunctive relief, and that Sanders was not entitled to attorney's fees, we affirm the trial court's judgment.
I. Background
On or about March 19, 2010, Future Com offered Sanders a job as a network security engineer for the company by emailing him an offer letter (the Offer Letter). The Offer Letter was drafted by Future Com's human resources manager, and it outlined the duties, salary, and benefits of the position. The second page of the letter contained a training repayment provision (the Training Repayment Provision) stating that Sanders would be responsible for repaying Future Com for any training provided to him by the company if he voluntarily left the company within one year after completing such training. Specifically, the Training Repayment Provision required Sanders to repay Future Com for training costs, such as travel expenses and "salary paid for study or course time."
Attached to the Offer Letter were four documents. The letter provided that before Sanders's employment could commence, he was required to sign the four documents, including a nine-page employment agreement (the Employment Agreement) and a stand-alone nondisclosure agreement (Stand-Alone Nondisclosure Agreement). The Offer Letter requested Sanders to return the signed documents to Future Com's human resources manager "upon [his] acknowledgement and acceptance," and it included a signature line at the bottom of the letter under the word "Accepted." The Offer Letter did not explicitly state whether Sanders's "acceptance" meant acceptance of a job with Future Com or merely his acceptance of the letter's terms as a binding contract.
The other two documents—an inventions agreement and a release of liability—are not at issue in this appeal.
On March 22, 2010, Sanders signed the Offer Letter and returned it to the human resources manager along with signed copies of the four documents attached to the letter. The Employment Agreement contained noncompete and nondisclosure provisions that protected the same confidential company information as the stand-alone nondisclosure agreement attached to the Offer Letter. The Employment Agreement had a one-year term, but it could be terminated by either party on thirty days' notice. While only Sanders signed the Offer Letter (as "Accepted"), the Employment Agreement was signed by both Sanders and Douglas Hollenshead, president and CEO of Future Com.
The terms of the Offer Letter and the Employment Agreement form the basis of the dispute between Sanders and Future Com. For the purposes of this opinion, the Offer Letter and its four attached documents, including the Employment Agreement, shall be collectively referred to as "the Contract."
Sanders worked for Future Com from March 2010 to May 2013. On May 3, 2013, the day after Sanders submitted his resignation to Future Com, the company sent him an invoice and a demand for payment for the training expenses it calculated to have incurred for Sanders's training during the last twelve months of his employment. The invoice included costs of $4,003.39 that Future Com incurred for Sanders's training-related travel and expenses and $34,476.96 in salary that it paid Sanders for the work time Sanders spent in training during his last twelve months with the company.
On May 9, 2013, Future Com filed its original petition seeking a temporary restraining order (TRO) and injunctive relief and alleging causes of action for breach of contract, breach of fiduciary duty, and disclosure and/or misappropriation and/or use of proprietary information and unfair competition. The same day, the trial court issued a TRO against Sanders that, among other things, prevented him from disclosing information protected by the Employment Agreement and the Stand-Alone Nondisclosure Agreement.
On June 4, 2013, the trial court, after conducting an evidentiary hearing, issued a temporary injunction prohibiting Sanders from disclosing Future Com's confidential information. The court also temporarily enjoined Sanders for a period of twelve months from soliciting any of Future Com's current or prospective customers that he personally contacted or sold products to on Future Com's behalf during the last twelve months of his employment.
Future Com amended its petition three times during the lawsuit. On June 7, 2013, Future Com amended its petition to add a cause of action for breach of contract regarding Sanders's agreement to reimburse Future Com for the training expenses it incurred in the twelve months prior to Sanders's resignation as specified in Future Com's May 3, 2013 demand letter and invoice. Later, Future Com filed a third amended petition to allege affirmative defenses to Sanders's counterclaims.
Future Com's second amended petition is not in the record. It asserted in its brief that its second amended petition corrected a typographical error, and Sanders does not dispute that assertion.
The court conducted a bench trial on September 29, 2014, approximately fifteen months after the issuance of the temporary injunction, by which time the twelve month nonsolicitation period and the noncompetition provisions contained in the Employment Agreement had expired on their own terms. The nondisclosure provisions of the Employment Agreement and the Stand-Alone Nondisclosure Agreement, which had no expressed time limits, had not expired at the time of trial.
At trial, Sanders testified that the parties had no discussions regarding the Training Repayment Provision in the Offer Letter. According to Sanders, he signed the Offer Letter only as an acknowledgment that he had seen it, and he never intended the Offer Letter to be part of the Contract. CEO Hollenshead, on the other hand, testified that both the Offer Letter and Employment Agreement were signed on the same day and that the documents were not independent of each other, rather they were both part of the Contract. At trial, the parties also contested how much time Sanders had spent in training during the last twelve months of his employment with Future Com.
Ultimately, the trial court found for Future Com on its claims and awarded it $38,480.35 in actual damages (representing the training expenses that Future Com incurred in the twelve months prior to Sanders's resignation) and $34,000 in attorney's fees. The trial court also permanently enjoined Sanders from disclosing certain Future Com information, including the identity of Future Com customers. Sanders now appeals.
II. Issues
In seven issues, Sanders asserts that (1) the Offer Letter is not a part of the Contract, (2) if the Offer Letter is part of the Contract, it renders the Contract ambiguous and unenforceable, (3) the Training Repayment Provision is unconscionable, (4) the Training Repayment Provision is against public policy, (5) the evidence did not support the trial court's finding that Sanders disclosed, misappropriated, or used Future Com's proprietary information, (6) the evidence did not support the trial court's finding that Sanders breached his fiduciary duty or a duty of loyalty to Future Com, and (7) Sanders, not Future Com, was entitled to attorney's fees under business and commerce code section 15.51. See Tex. Bus. & Com. Code Ann. § 15.51(a) (West 2011). We overrule each of these issues.
III. Discussion
A. The Construction of Employment Contracts in Texas.
This court construes employment contracts as we do any other contract. See Dallas Hotel Co. v. Lackey, 203 S.W.2d 557, 562 (Tex. Civ. App.—Dallas 1947, writ ref'd n.r.e.) (construing an employment contract using general principles of contract interpretation); see also NHA, Inc. v. Jones, 500 S.W.2d 940, 944 (Tex. App.—Fort Worth 1973, writ ref'd n.r.e.) (same). "In construing a contract, we must ascertain and give effect to the parties' intentions as expressed in the document." Frost Nat'l Bank v. L & F Distrib., Ltd., 165 S.W.3d 310, 311-12 (Tex. 2005). "We consider the entire writing and attempt to harmonize and give effect to all the provisions of the contract by analyzing the provisions with reference to the whole agreement." Id. at 312. "Understanding the context in which an agreement was made is essential in determining the parties' intent as expressed in the agreement, but it is the parties' expressed intent that the court must determine," and "[e]xtrinsic evidence cannot be used to show that the parties probably meant, or could have meant, something other than what their agreement stated." Anglo-Dutch Petroleum Int'l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445, 451 (Tex. 2011).
We generally construe together as a single contract documents that were executed for the same purpose and during the same transaction. Lackey, 203 S.W.2d at 561; see Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981) (separate instruments executed at the same time, for the same purpose, and during the same transaction are to be construed as one instrument). Thus, when an offer letter is executed along with an employment contract, we must construe those documents together unless the language of the documents expresses a different intent. See Lake v. Cravens, 488 S.W.3d 867, 889 (Tex. App.—Fort Worth 2016, no pet.). Finally, if only one party signs a contract, the other party may accept by his or her acts, conduct, or acquiescence in the terms of the contract. DeClair v. G&B McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 44 (Tex. App.—Houston [1st Dist.] 2008, no pet.).
B. The Offer Letter is Part of the Contract.
In Sanders's first issue, he contends that the Employment Agreement constitutes the entire contract between the parties and that he is not bound by the terms of the Offer Letter because it was not intended to be part of the Contract. He makes four main arguments in support of this issue, asserting: (1) the plain language of the Employment Agreement and Offer Letter indicate that the parties did not intend for the Offer Letter to be binding; (2) the plain language of the Offer Letter likewise shows no intent to bind the parties; (3) Future Com's earlier pleadings foreclose its later position that the Offer Letter is binding; and (4) reading the various documents together creates ambiguities, thus showing that the parties did not intend for the Offer Letter to be binding. We reject each of these arguments.
1. The Plain Language of the Employment Agreement Does Not Exclude Consideration of the Offer Letter.
Sanders's first argument under this issue is that the language of the Employment Agreement establishes that it comprises the entire Contract. Per Sanders:
1) The first paragraph of the Employment Agreement states that Sanders will work for Future Com pursuant to the terms of "this Agreement";
2) Paragraph 44 of the Employment Agreement contains a merger clause, which provides "that this Agreement constitutes the complete and entire agreement between the parties, that no previous agreement, either oral or written, shall have any effect on its terms or provisions, and that all previous agreements, either oral or written, are expressly superseded and revoked by this Agreement";
3) Paragraph 45 of the Employment Agreement provides that "this Agreement may not be modified by any subsequent agreement unless the modifying agreement is in writing, contains an express provision referencing this Agreement, is signed and executed by [the CEO], and is signed by [Sanders]";
4) Paragraph 37 of the Employment Agreement sets out Sanders's duties upon termination and does not mention repayment of training expenses; andNone of these positions are persuasive.
5) The nondisclosure of confidential information provisions contained in the Employment Agreement were duplicated in the Stand-Alone Nondisclosure Agreement.
First, Sanders argues that to conclude that the Offer Letter is part of the Contract, we would have to redefine the phrase "this Agreement" because the Employment Agreement's first paragraph provides that Sanders will work for Future Com in accordance with "this Agreement." This argument is erroneous, because this paragraph merely required Sanders to comply with the terms of the Employment Agreement. It certainly does not exclude terms set out elsewhere, in other employment documents.
Second, Sanders essentially argues that the merger clause in paragraph 44 of the Employment Agreement demonstrates that it alone represents the fully integrated agreement of the parties. However, "[a]n agreement is [fully] integrated if the parties intended [the] writing to be a final and complete expression of agreed terms;" and "[a] fully integrated written agreement is a final and complete expression of all the terms agreed upon by the parties." Morgan Bldgs. & Spas, Inc. v. Humane Soc'y of Se. Tex., 249 S.W.3d 480, 486 (Tex. App.—Beaumont 2008, no pet.) (emphasis added). In contrast, "[a] partially integrated agreement is a final and complete expression of all the terms addressed in that written agreement[] but is not a final and complete expression of all the terms the parties have agreed upon." Id. (emphasis added). Moreover, the inclusion of a merger clause, as here, "does not conclusively establish the written contract [containing the clause] is fully integrated." Id.
In this case, the text of the documents related to Sanders's employment and the circumstances surrounding their execution clearly demonstrate that the Employment Agreement was not intended to be the fully integrated contract of the parties. Specifically, Sanders signed and returned the Employment Agreement, the Offer Letter, and three other documents related to his employment on the same day. The fact that the merger clause provides that it revokes "previous agreements" does not prevent the Offer Letter from being part of the Contract. Indeed, the Offer Letter was not a previous agreement, it was executed contemporaneously with the Employment Agreement and intended to be construed together with that document to form the parties' complete and final agreement. Finally, the terms of the Offer Letter and the Employment Agreement do not contradict each other, and the Employment Agreement does not indicate that it was the final and complete expression of all the terms of the Contract.
Third, Sanders's contention that the Offer Letter is not part of the Contract because paragraph 45 of the Employment Agreement provided that it may not be modified unless the modification is in writing and signed by CEO Hollenshead and Sanders is especially unpersuasive. Here, the Offer Letter and the Employment Agreement were executed as a part of the parties' original agreement, and therefore the Offer Letter was not a subsequent modification of the Contract. See Libby v. Noel, 581 S.W.2d 761, 764 (Tex. Civ. App.—El Paso 1979, writ ref'd n.r.e.) ("[T]he two instruments must be construed together because they were executed at the same time between the same parties and relate to the same subject matter."). To hold otherwise would require this court to completely ignore the undisputed facts surrounding Sanders's hiring at Future Com and render the Offer Letter meaningless.
Fourth, Sanders's contention that the Offer Letter cannot be part of the Contract because paragraph 37 of the Employment Agreement, unlike the Offer Letter, does not contain a Training Repayment Provision, is without merit. The Training Repayment Provision in the Offer Letter was "accepted" by Sanders. Simply stated, there is no obligation for Future Com to include a similar provision in the Employment Agreement for the Offer Letter to be part of the Contract.
Fifth, Sanders asserts that because the nondisclosure provisions in the Employment Agreement were duplicated in the Stand-Alone Nondisclosure Agreement, it is evidence that the Employment Agreement was intended to be the parties' complete Contract, thus allowing him to avoid the provisions of the Offer Letter. We disagree. The fact that the Employment Agreement and Stand-Alone Nondisclosure Agreement have duplicate provisions is not evidence that the parties did not intend for the Offer Letter (or the other documents) to be part of the Contract. Rather, we must review all the documents together to ascertain the parties' agreement rather than voiding essential parts of the Contract whole cloth. See El Paso Field Servs., L.P. v. MasTec N. Am., Inc.; 389 S.W.3d 802, 805 (Tex. 2012) ("[W]e must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." (citations and internal quotation marks omitted)). Accordingly, the plain language of the Employment Agreement did not express an intent to exclude the Offer Letter from the Contract. We overrule this part of Sanders's first issue.
2. The Structure of the Offer Letter Does Not Preclude it from Being Part of the Contract.
Sanders next contends that the Offer Letter was not intended to be part of the Contract by contrasting the informality of the Offer Letter with the formal structure of the Employment Agreement. We disagree.
Initially, Sanders asserts that "[a] party receiving such a formal agreement as th[e] Employment Agreement would have anticipated that any document containing additional terms[, such as the Offer Letter,] would be labeled more conspicuously." Thus, he contends, the Offer Letter's format demonstrated that the parties did not intend it to be part of the Contract. However, it is well settled that a contract is not required to be in any particular format. See City of Houston v. Williams, 353 S.W.3d 128, 137 (Tex. 2011). Here, the Offer Letter was written specifically for Sanders, whereas the Employment Agreement appears to be a boilerplate agreement given to all employees. The fact that the documents are in different formats is not unexpected and does not express an intent of the parties to make the Employment Agreement the complete Contract. See, e.g., Lackey, 203 S.W.2d at 561 (construing as one contract a form agreement used by a hotel for all its employees and the letter sent to the hotel's employee setting out the specific details of the hotel's offer of employment).
Next, Sanders contends that the Offer Letter is not part of the Contract because there were no discussions about the Training Repayment Provision when he signed the Offer Letter. However, Sanders's failure to ask for clarification about the Offer Letter's terms did not prevent him from agreeing to them. See In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005) ("Absent fraud, misrepresentation, or deceit, a party is bound by the terms of the contract he signed, regardless of whether he read it or thought it had different terms.").
Further, Sanders asserts that because the Offer Letter was not executed by Future Com, it is not part of the Contract. But even Sanders acknowledges that a document need not be signed by all parties to the agreement to be binding. See In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.—El Paso 2004, no pet.). Here, nothing in the language or structure of the Offer Letter indicates that it is nonbinding and not part of the Contract unless signed by both parties.
Similarly, Sanders attacks the structure of the Offer Letter by asserting that because it provides that his employment was contingent upon his execution of other documents sent to him (including the Employment Agreement), but not the Offer Letter, the Offer Letter is not part of the Contract. This argument is erroneous. Nothing in the plain language of the Offer Letter or the Employment Agreement explicitly excludes the Offer Letter from being included in the parties' final integrated Contract.
We overrule this part of Sanders's first issue.
3. Future Com's Previous Pleadings Do Not Preclude the Offer Letter from Being Part of the Contract.
In his third argument in support of his contention that the Offer Letter is not part of the Contract, Sanders asserts that Future Com's allegations in its original petition demonstrate that Future Com did not consider the Offer Letter to be a part of the Contract. According to Sanders, because Future Com attached only the Employment Agreement, and not the Offer Letter, to its original petition and stated that it was a "true and correct" copy of the Contract, Future Com made a judicial admission that the Offer Letter was not part of the Contract. However, although superseded pleadings are admissible at trial in some circumstances, they are not binding on the party as formal judicial admissions. Bay Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 235 (Tex. 2007) (holding that prior pleadings are admissible as statements of a party-opponent); See Sosa v. Cent. Power & Light, 909 S.W.2d 893, 895 (Tex. 1995) ("Contrary to statements in live pleadings, those contained in superseded pleadings are not conclusive and indisputable judicial admissions."). Here, Future Com's original petition is not in the record, so we cannot determine whether Sanders's reading of it is correct. But even if Sanders's representation of the petition is correct, statements in Future Com's original petition cannot constitute judicial admissions because they were superseded by Future Com's third amended petition, its live pleading at trial, which alleged that the Offer Letter was part of the Contract. See id. We overrule this part of Sanders's first issue.
4. Sanders Waived His Argument that Construing the Offer Letter as Part of the Contract Creates Ambiguities.
Sanders next contends that construing the Offer Letter as part of the Contract agreement creates ambiguities in the Employment Agreement. Specifically, Sanders asserts that the Employment Agreement promised to provide him with specialized training as part of his consideration, but the Offer Letter states that he must repay Future Com for all training provided by the company if he leaves within twelve months of receiving the training. Thus, he asserts, construing the Offer Letter and the Employment Agreement together creates ambiguities because they contain inconsistent provisions that cannot be reconciled. However, Sanders did not adequately brief this issue because he fails to cite to any relevant authority in support of this argument. Under the settled rule of appellate review that an appellate complaint may be waived due to inadequate briefing, we hold that Sanders has waived the remainder of his first issue. See Tex. R. App. P. 38.1(i) (providing that a brief must contain appropriate citations to authorities); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284-85 (Tex. 1994) (discussing "long-standing rule" that point may be waived due to inadequate briefing).
We overrule Sanders's first issue in its entirety.
C. Sanders Waived His Contention that the Contract is Unenforceable Because it is Ambiguous.
In support of his second issue, Sanders raises two arguments—that the Contract is unenforceable because it is ambiguous and that it is unenforceable because its terms are too indefinite.
First, he contends that if the Offer Letter is a part of the Contract, the Contract is unenforceable as a matter of law because inconsistencies in the Contract render it ambiguous. As with his previous ambiguity argument that was part of his first issue, Sanders cites no relevant authority. We again hold that he has waived this argument. See Fredonia State Bank, 881 S.W.2d at 284-85.
Second, Sanders argues that the Contract is unenforceable because the terms of the Offer Letter (particularly, the Training Repayment Provision) are so indefinite that the court cannot ascertain their meaning. In support, Sanders cites to Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831 (Tex. 2000). There, the Texas Supreme Court noted that "[i]t is well settled law that when an agreement leaves material matters open for future adjustment and agreement that never occur, it is not binding upon the parties and merely constitutes an agreement to agree." Id. at 846. Sanders, however, provides no analysis under this issue to support the contention that the Training Repayment Provision (or another provision of the Offer Letter) merely constituted an agreement to agree, thereby rendering it unenforceable. To the extent that Sanders is attempting such an argument, he has waived it by inadequately briefing it. This court shall not resort to speculation or surmise to make Sanders's argument for him. Cf. Boswell v. Hon. Governor of Tex., 138 F. Supp. 2d 782, 785 (N. D. Tex. 2000) ("In the end, it is not the Court's place to speculate or imagine what the [party's] claims may be." (citation and internal quotations marks omitted)).
We overrule Sanders's second issue.
D. The Offer Letter is Not Unconscionable.
In his third issue, Sanders challenges the Offer Letter as being unconscionable and therefore unenforceable as a matter of law. For the reasons set forth below, we disagree.
1. Judicial Review of Contracts for Unconscionability.
Unconscionable contracts are unenforceable. In re Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008). Particular terms may be unconscionable even when the contract as a whole is not, and a term may be unconscionable in some contexts but not in others. Restatement (Second) of Contracts § 208 (1981); Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 565 (Tex. 2006). The person seeking to avoid the contract has the burden of proving unconscionability. Poly-Am., 262 S.W.3d at 348; Pletcher v. Goetz, 9 S.W.3d 442, 445 (Tex. App.—Fort Worth 1999, pet. denied) (op. on reh'g). The term "unconscionable" has no precise legal definition. Besteman v. Pitcock, 272 S.W.3d 777, 787 (Tex. App.—Texarkana 2008, no pet.). "Texas courts usually analyze unconscionability issues 'in light of a variety of factors, which aim to prevent oppression and unfair surprise.'" Venture Cotton Co-op. v. Freeman, 435 S.W.3d 222, 233 (Tex. 2014) (citation omitted). "Unconscionability determinations are not isolated inquiries but rather are made in 'light of [a contract's] setting, purpose, and effect.'" Id. (quoting Restatement (Second) of Contracts § 208, cmt. a). Texas law recognizes both substantive and procedural unconscionability. In re Olshan Found. Repair Co., LLC, 328 S.W.3d 883, 892 (Tex. 2010). "Substantive unconscionability refers to the fairness of the [contract or] provision itself, whereas procedural unconscionability refers to the circumstances surrounding adoption of the [contract or] provision. Id. (citation and quotation marks omitted).
Whether a contract or contract term is unconscionable under all relevant circumstances is an issue for the factfinder, but whether a contract is contrary to public policy and unconscionable at the time it is formed is a question of law. Hoover, 206 S.W.3d at 561-62; Pletcher, 9 S.W.3d at 445. We review the trial court's legal conclusions de novo while deferring to the trial court's factual determinations. Celmer v. McGarry, 412 S.W.3d 691, 706 (Tex. App.—Dallas 2013, pet. denied). We will not disturb the trial court's conclusion so long as it has evidentiary support. Pletcher, 9 S.W.3d at 445.
2. The Repayment Provision is Not Substantively Unconscionable.
Sanders contends that the Offer Letter is substantively unconscionable. The test for substantive unconscionability is whether, "given the parties' general commercial background and the commercial needs of the particular trade or case, the [contract or] clause involved is so one-sided that it is unconscionable under the circumstances existing when the parties made the contract." In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 678 (Tex. 2006) (citation and quotation marks omitted).
Sanders first asserts that the Offer Letter is substantively unconscionable because the Training Repayment Provision is applied regardless of wrongdoing, and its application resulted in significant costs to him. The Training Repayment Provision provides that an employee who voluntarily leaves Future Com for any reason is required to repay all the salary earned while training, even if the employee did not violate any terms of the Contract. In this case, Future Com sought and the trial court awarded an amount equal to one-third of Sanders's salary in his last year.
Considering the Training Repayment Provision in the circumstances in this case, however, we cannot say that the provision is substantively unconscionable. See Venture Cotton, 435 S.W.3d at 233 (determining unconscionability considering the contract's setting, purpose, and effect). Evidence at trial showed that the Training Repayment Provision works to prevent Future Com from missing the benefits of the training it paid for if the employee leaves the company. For example, Future Com receives discounts from vendors for having employees certified in the vendors' products. As noted, the effect of the Training Repayment Provision on Sanders is that he must repay almost a third of his salary from the previous year, but the effect on Future Com is that it protects itself from the loss of Sanders's employment before it had the opportunity to recoup its costs from training him. In this way, the provision's effect satisfies its purpose. Further, Future Com invests in training Sanders for its own benefit, not to allow a competitor to make a better offer to him knowing it will not have to bear the expense of training him. Future Com wants to train its own employees, not its competitors', and the Training Repayment Provision serves this purpose.
Sanders next argues that Future Com has no legitimate interests protected by the Training Repayment Provision because it is not tied to preventing unfair competition. He argues that the provision "serves no purpose other than to penalize an employee for resigning from the company and taking gainful employment somewhere else." In support, Sanders contends that the record shows that in the year before he left his employment, Future Com received benefits (in the form of customer business) from his training. He maintains Future Com did not show that it suffered losses from his leaving the company, and that if the Training Repayment Provision were a penalty clause triggered by a breach of contract, it would be unenforceable unless the damages requested were reasonably tied to actual losses.
Although prevention of loss may be the purpose of the Training Repayment Provision, the language of the Offer Letter does not require Future Com to prove it suffered a loss before invoking the provision. The language requires reimbursement if Sanders were to leave the company for any reason. Sanders cites no authority for the proposition that, under Texas law, this kind of risk-shifting by an employer is unconscionable. Considering Sanders's and Future Com's general commercial background and the commercial needs in this case, we cannot say that the clause involved is so one-sided that it is substantively unconscionable under the circumstances existing when the parties made the Contract.
3. The Repayment Provision is Not Procedurally Unconscionable.
Sanders asserts that his inability to influence or negotiate the terms of the Contract weighs in favor of the Offer Letter being unconscionable. This argument relates to procedural unconscionability.
Sanders asks us to consider "the manner in which the [Training Repayment Provision] was presented to [him]," asserting that "the clause is hidden away in [the Offer Letter and] does not appear to be part of the [E]mployment [A]greement." However, we cannot say under the circumstances that the provision was an unfair surprise. See Palm Harbor, 195 S.W.3d at 679 ("Unconscionability principles are applied to prevent unfair surprise or oppression."). The Offer Letter explicitly informed him of Future Com's training repayment requirement, including the salary repayment, and there was no evidence that Sanders was incapable of understanding the terms. See BBVA Compass Inv. Sols., Inc. v. Brooks, 456 S.W.3d 711, 724 (Tex. App.—Fort Worth 2015, no pet.) (examples of procedural unconscionability include situations "in which one of the parties was incapable of understanding the agreement without assistance, and the other party did not provide that assistance, such as where one of the parties was functionally illiterate or where one of the parties did not speak English"). Nothing in the record shows that Sanders sought clarification of how the training repayment amount would be calculated or how much of his salary he might have to repay. In fact, the Training Repayment Provision was not "hidden away"; it was placed in the same Offer Letter that informed him of his salary and other benefits, terms that employees generally consider to be important. See D.R. Horton-Tex., Ltd. v. Drogseth, No. 02-12-00435-CV, 2013 WL 3377121, at *4 (Tex. App.—Fort Worth July 3, 2013, no pet.) (mem. op.) (rejecting the appellee's contention that an arbitration clause was procedurally unconscionable because it was on the back page of a contract, it was not conspicuous, and the signature line was on the front page of the contract while the arbitration clause was on the back). Here, the trial court did not abuse its discretion in determining that the repayment provision was not procedurally unconscionable.
We overrule Sanders's third issue.
E. The Parties' Agreement is Not Unenforceable under Public Policy.
In Sander's fourth issue, he argues that the Training Repayment Provision in the Offer Letter is against public policy and is thus "unconscionable" and void as a matter of law. We disagree.
1. Judicial Review of Contracts on Public Policy Grounds.
Whether a contract violates public policy is a question of law, which we review de novo. Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711, 726 (Tex. App.—Dallas 2004, no pet.). "The rule that public policy precludes the enforcement of an otherwise valid contract should be applied cautiously and only in cases involving dominant public interests." Id.; see also Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 553 (Tex. 2001) (superseded by statute on other grounds) ("Courts must exercise judicial restraint in deciding whether to hold arm's-length contracts void on public policy grounds."). "In considering whether a contract is contrary to public policy, the test is whether the tendency of the agreement is injurious to the public good, not whether its application in a particular case results in actual injury." Yancey v. Floyd W. & Co., 755 S.W.2d 914, 925 (Tex. App.—Fort Worth 1988, writ denied). "A state's public policy is embodied in its constitution, statutes, and the decisions of its courts." Johnson, 148 S.W.3d at 727. Thus, "to determine whether a contract violates public policy, we consider the policies underlying any applicable statutes." Lawrence, 44 S.W.3d at 555.
2. Voiding the Contract Would Not Be an Exercise in Judicial Restraint.
Sanders argues that "[t]he net effect of the [Training Repayment Provision] is that employees will not be willing or able to subject themselves to such a significant liability simply for changing jobs" and that "[e]mployees subject to such clauses will be compelled to stay with their current employer, eliminating employee mobility and restraining trade." As such, he argues, the provision is an unreasonable restraint on trade and against public policy.
We cannot say that the Training Repayment Provision is injurious to public policy. The provision does not, on its face, require any particular amount of training or the repayment of any specific percentage of an employee's salary. Training repayment provisions have been found to serve a public good. See, e.g., Nat'l Training Fund for Sheet Metal & Air Conditioning Indus. v. Maddux, 751 F. Supp. 120, 121 (S.D. Tex. 1990) (upholding apprenticeship agreements under which an apprentice received a loan for the costs of industry training, which could be repaid in cash or by receiving in-kind credits from working for a company that contributed to the fund providing the loans). Moreover, we have already held that the Training Repayment Provision is not unconscionable. Texas's public policy favors its enforcement. We therefore overrule Sanders's fourth issue.
In reaching this conclusion, we do not hold that any training repayment provision may never be against public policy.
F. The Trial Court Did Not Err by Granting a Permanent Injunction.
In Sanders's fifth issue, he argues that the trial court erred by finding that Sanders had disclosed, misappropriated, or used Future Com's proprietary information, and it abused its discretion by entering a permanent injunction in favor of Future Com. We review for clear abuse of discretion a trial court's grant or refusal of a permanent injunction. Leibovitz v. Sequoia Real Estate Holdings, L.P., 465 S.W.3d 331, 350 (Tex. App.—Dallas 2015, no pet.).
According to Sanders, the evidence at trial did not show that he violated the nondisclosure provisions in the Contract, that Future Com was in danger of any imminent harm, that Future Com suffered an irreparable injury, or that there was no adequate remedy at law for Future Com. See Frey v. DeCordova Bend Estates Owners Ass'n, 632 S.W.2d 877, 881 (Tex. App.—Fort Worth 1982) (setting out the requirements for a permanent injunction under the common law), aff'd, 647 S.W.2d 246 (Tex. 1983). However, a plaintiff seeking a permanent injunction under the Covenants Not to Compete Act (CNCA) does not need to establish each of these elements. Tex. Bus. & Com. Code Ann. § 15.52 (West 2011); Tranter, Inc. v. Liss, No. 02-13-00167-CV, 2014 WL 1257278, at *6 (Tex. App.—Fort Worth Mar. 27, 2014, no pet.) (mem. op.). Rather, a plaintiff is entitled to a permanent injunction under the CNCA merely upon a showing of a breach of a noncompete agreement covered by the CNCA. See Tex. Bus. & Com. Code Ann. § 15.51(a). Because the evidence showed that Sanders breached the nondisclosure provisions of the Contract, the trial court did not clearly abuse its discretion by issuing a permanent injunction. Accordingly, we overrule Sanders's contention that Future Com was required to show harm, the existence of irreparable injury, or the absence of an adequate remedy at law to be entitled to the permanent injunction.
Sanders next asserts that the trial court abused its discretion by in effect enjoining him from disclosing categories of information that the evidence at trial showed he either never had access to while at Future Com or was not treated as confidential by Future Com. While Sanders may be correct in his characterization of the evidence, the injunction was nonetheless permissible under the CNCA. As we stated, the CNCA allows a trial court to award injunctive relief for the breach of a covenant not to compete. Id. Future Com established that Sanders breached the nondisclosure agreement by disclosing the identity of one of its customers, a disclosure expressly prohibited by the Employment Agreement. Specifically, Future Com showed at trial that when Sanders applied for his new job, he disclosed the name and contact information of an employee of a Future Com client by listing the employee as a reference on his job application. Future Com thus proved that Sanders breached the nondisclosure agreement by disclosing the identity of a Future Com customer. See id. § 15.51(a).
The trial court did not clearly abuse its discretion by granting the permanent injunction. We overrule Sanders's fifth issue.
G. Sanders Failed to Show Harm from the Trial Court's Finding that He Breached His Duty of Loyalty to Future Com.
Sanders argues in his sixth issue that the trial court erred by finding that Sanders breached his fiduciary duty or duty of loyalty to Future Com. The Employment Agreement stated that Sanders had "a fiduciary duty of loyalty to [Future Com] and that [he] [would] take no action that in any way harms the business, business interests, or reputations of" Future Com. The trial court found that Sanders breached his fiduciary duty and, more specifically, his duty of loyalty to Future Com, but the findings of fact and conclusions of law did not explain how he did so. The trial court did not, however, award either damages or injunctive relief based on such a breach. The damages awarded were for breach of contract for failure to repay Future Com for training, and the injunctive relief was granted under the CNCA based on the parties' nondisclosure agreement, not on any fiduciary duty. Indeed, the judgment does not mention any breach of fiduciary duty. Accordingly, Sanders has not shown that he was harmed by the trial court's finding that he breached a duty of loyalty to Future Com. See Tex. R. App. P. 44.1. We overrule his sixth issue.
H. The Award of Attorney's Fees to Future Com Was Not Erroneous.
Under Sanders's seventh and final issue, he argues that the trial court erred by awarding attorney's fees to Future Com and that the court should have awarded attorney's fees to him under section 15.51 of the business and commerce code. Tex. Bus. & Com. Code Ann. § 15.51(c). Section 15.51 sets out the circumstances under which a trial court has the discretion to award attorney's fees to a person defending against the enforcement of a covenant not to compete. Id. However, there is no evidence in the record that Future Com knew at the time of the covenant's execution that its restrictions were unreasonable and imposed a greater restraint than was necessary. Id. Without such evidence, we cannot hold that the trial court abused its discretion by denying an award of attorney's fees to Sanders. We overrule Sanders's seventh issue as to his request for attorney's fees.
As for the award of attorney's fees to Future Com, Sanders offers no argument against the award other than his contention that Future Com had knowledge of the covenant's defects. Accordingly, we overrule the remainder of Sanders's seventh issue.
IV. Conclusion
Having overruled Sanders's issues, we affirm the trial court's judgment.
/s/ Mark T. Pittman
MARK T. PITTMAN
JUSTICE PANEL: WALKER, SUDDERTH, and PITTMAN, JJ. DELIVERED: May 18, 2017