The case of Infinity Sys., Inc. v. Gray Mech. Contractors, LLC, No. 01-19-00253-CV, 2020 WL 5637505 (Tex. App.—Houston [1st Dist.] Sept. 22, 2020, no pet.), a Texas Uniform Trade Secrets Act (TUTSA) case, involved a motion to dismiss under the previous version of the Texas Citizens Participation Act (TCPA).  Ultimately, the First Court of Appeals, Houston determined that private communications between parties who communicate for personal, pecuniary gain are not protected by the TCPA.

Gray, the plaintiff in this case, sold mechanical contracting, HVAC construction, and maintenance services in Texas and Louisiana. Gray hired Anthony Harrison (Harrison) as its Project Manager in 2015. Harrison’s duties included, among other things, compiling project estimations through Gray’s proprietary pricing system that Gray kept on a network drive with restricted access. Gray also hired Kyle Self (Self) as its Vice President-Industrial in 2018. After four months, Self was fired and went to work for Infinity, a direct competitor of Gray’s.

About a week after Self’s termination, Gray and Infinity submitted bids for HVAC construction services. Infinity’s bid came in thirty minutes after Gray’s, and the bid was approximately 0.3 percent less then Gray’s. Fearing foul play, Gray’s Chief Operating Officer (COO) investigated Harrison since he was responsible for submitting bids. Gray’s COO discovered that Harrison had exchanged over 200 text messages with Self on the day of the bid submission, and Harrison admitted to sending Self confidential bid information and Gray’s final bid so that Infinity could underbid Gray.

Gray immediately terminated Harrison, who went to work for Infinity. Ultimately, Infinity pulled its bid, and Gray notified the company receiving the bids of the incident. That company then rejected Gray’s bid to avoid any impropriety, and Gray has won no additional contracts with that vendor. Consequently, Gray sued Harrison, Self, and Infinity for, among other things, misappropriation of trade secrets under TUTSA. Infinity filed a motion to dismiss through the TCPA, alleging that Gray’s claims targeted its rights to free speech and association. The trial court denied the TCPA motion, and this appeal followed.

Regarding the right of association, Infinity asserted that Gray’s claims related to communications between Infinity, Self, and Harrison in their pursuit of common interests in the business operation of Infinity. The Court determined that the common interest prong related to the community at large or public interests. In that vein, allegations involving misappropriation of trade secrets fell outside the definition of common interest because such actions only benefit the tortfeasors. Therefore, the Court determined that Infinity failed to meet its burden of showing that Gray’s lawsuit related to Infinity’s right of association.

The Court followed a similar analysis for the right to free speech. Specifically, the Court needed to determine if the communications, as alleged by Gray, were in connection with a matter of public concern. The Court noted that purely private matters were excluded from TCPA protection because private disputes affecting only the pecuniary interests of private parties were not matters of public concern. Crucially, the Court noted that Gray’s allegations did not touch on any breach of non-compete, non-solicitation, or non-disclosure agreements. Therefore, the communications between the defendants were limited solely to their potential pecuniary interests. As a result, Infinity failed to carry its burden on this point as well.

Ultimately, the Court affirmed the trial court’s denial of Infinity’s TCPA motion to dismiss because Infinity failed to meet its burden showing that the TCPA applied to Gray’s claims.

Special thanks to Kyle Markwardt for his assistance with this blog post