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Dallas Court of Appeals Issues Simplified Opinion in Goldberg Case

By Heath Coffman on April 19, 2020

In 2019, the Dallas Court of Appeals issued a decision in Goldberg v. EMR (USA Holdings) Inc., a complex opinion in evaluating the application of the previous version of the Texas Citizens Participation Act (TCPA) to trade secrets and other claims.  In 2020, the Court reissued that opinion with a more streamlined analysis.

In Goldberg, an owner sold his scrap metal business for several million dollars.  After his non-compete expired, he opened a competing scrap metal business and solicited several of his former employees to join him.  His former business sued the former owner and employees for misappropriation of trade secrets, breach of fiduciary duty, and tortious interference with contract.

The defendants responded with a TCPA Motion to Dismiss, arguing that the lawsuit was based on or in response to their free speech or free association rights.  The Dallas of Court of Appeals, though, rejected this argument.  First, the Court looked at Plaintiffs’ claims that the departing employees had transferred trade secrets to themselves through either emails to themselves or moving files to personal storage devices or web-based services.  The Court held that such transfers could not constitute “communications” under the TCPA because it does not involve the making or submitting of a document.  Essentially, copying is not a communication under the TCPA.

The Court next looked at Plaintiffs’ allegations that Defendants had used trade secrets to send emails to purchasers and suppliers.  These emails offered to buy or sell scrap metal.  Such emails were “communications” under the TCPA, but they did not involve a “matter of public concern” because they were limited to offers to buy and sell scrap metal.

Finally, the Court looked at Plaintiffs’ allegations that Defendants tortiously interfered with contracts by hiring away Plaintiffs’ employees.  Again, such communications did not involve “matters of public concern.”  As the court noted, private communications between and employer and a potential employee generally do not involve public or citizen’s participation.