Summary
The Fifth Circuit reviews a district court's judgment in a dispute between a former CFO and his employer over breach of an employment agreement and a loan. The court addresses challenges to a jury instruction on prior material breach, the award of prejudgment interest, and the denial of a permanent injunction. It affirms the prior material breach finding, vacates the damages award regarding interest, and remands for further proceedings on remittitur and potential injunctive relief.
Topics
Practice areas
Questions Presented
- Whether the jury instruction that a prior material breach by Sheet Pile discharged Ramsey’s duty to perform under the employment agreement was proper under Texas law.
- Whether the district court erred by not reducing the jury’s damages award and by granting prejudgment interest, resulting in double recovery.
- Whether the district court erred in denying a permanent injunction requiring Ramsey to return confidential information.
Holdings
- The district court did not err; the instruction was proper and the jury’s finding of prior material breach was supported by the evidence.
- The district court erred by not offering a remittitur; the prejudgment interest award created an impermissible double recovery and the court must remand for a remittitur based on the amount owed at filing.
- The district court did not err; it properly required a showing of likelihood of future disclosure, which Sheet Pile failed to demonstrate.
Key quotations
“The district court did not err in refusing to grant Sheet Pile’s requested injunction, finding that Sheet Pile had not shown that Ramsey was likely to disclose confidential information in the future.” (at 12)
“Prejudgment interest runs from the date the suit is filed to the day before judgment is rendered.” (at 11)
Factual background
Ramsey, CFO of Sheet Pile, was promised salary and bonus and signed a non‑compete and confidentiality agreement. He loaned Sheet Pile $100,000. Sheet Pile allegedly failed to pay the final salary and bonus and terminated Ramsey in December 2019. Ramsey sued for breach of the loan and employment agreement; Sheet Pile counterclaimed and sought an injunction. A jury awarded Ramsey salary, bonus, and loan damages, found he breached the employment agreement but that breach was excused by Sheet Pile’s prior material breach, and awarded prejudgment interest.
Procedural history
Ramsey sued Sheet Pile in Texas state court, removed to the Western District of Texas, where a jury found in his favor on salary, bonus, and loan damages, and found he breached the employment agreement but excused by Sheet Pile's prior material breach. The district court entered judgment with prejudgment interest and denied Sheet Pile’s injunction. Sheet Pile appealed.
Remand instructions
District court must offer Ramsey a remittitur based on the amount owed on the loan as of the filing date and consider whether to issue an injunction requiring return of any confidential documents he retains.