Salas v. Total Air Servs., LLC - 550 S.W.3d 683 (Tex. App. 2018)

Rule:

A master and servant (or employer--employee) are a species of the formal principal-agent relationship. As such, employment relationships may impose some fiduciary duties. Thus, when a fiduciary relationship of agency exists between employee and employer, an employee has a duty to act primarily for the benefit of his employer in matters connected with his employment. Additionally, an employee may not (1) appropriate company trade secrets; (2) solicit the former employer's customers while still working for his employer; (3) solicit the departure of other employees while still working for his employer; or (4) carry away confidential information.

Facts:

At-will employees (who have not entered valid non-compete agreements) are free in Texas to leave and form competing businesses. Even while still employed, the employee can take preparatory steps to that end. In this case, however, Total Air Services, LLC sued its former employee, Heriberto Salas, after it learned he opened and operated a competing company--Iceland Refrigeration--while still working for Total Air. A jury found that found Salas breached his fiduciary duty to Total Air and that Total Air lost $50,000 of profits because of that breach. The jury also found that Salas acted with malice, and assessed an additional $20,000 in punitive damages. The trial court entered judgment only on the actual damages along with pre-judgment interest and court costs. Salas appealed.

Issue:

Did a fiduciary relationship of agency exist between Salas and Total Air?

Answer:

Yes.

Conclusion:

The court held that judgment in favor of Total Air against Salas was proper because the court did not abuse its discretion by instructing the jury that Salas owed a fiduciary duty to Total Air, and Salas set up and operated a competing business in the same market as Total Air and at times soliciting the very same customers that Total Air was pursuing; the evidence showed that Salas employee actively competed against Total Air on several jobs.