Enforcement Of Noncompete Agreements In Louisiana

Changes made to LA. R.S. 23:921 therefore expands the ability of companies to enter into restrictive agreements rather than reduce them, which runs counter to the general national trend of states reducing these provisions. For some companies (companies, partnerships and LLC) that have restrictive agreements with certain Louisiana-based individuals (shareholders, partners and LLC members), it is therefore time to consider a review and possibly an amendment to these agreements to extend the scope of the restrictions to people who can only become employees of historical competitors. These rules are more restrictive than Texas, but they clarify how these provisions will be developed. Non-competition prohibitions are also interpreted strictly in favour of the employee and against the party attempting to impose itself. Here are some examples of non-competition for which they have been found to contain overly broad definitions of the employer`s business: Section 23:921 (I) of the Statute prohibits the application of non-complete agreements against motor vehicle sellers. [24] Motor vehicle sellers are the only tax-exempt category of professionals covered by the status and that their employers cannot prevent from selling vehicles. [25] Louisiana courts have also upheld this prohibition in situations where a salesperson performs executive functions at the sales location. [26] Home > Article > Beware non-compete agreements in Louisiana: `Toto, I`ve a feeling we`re not in Texas anymore` This article examines what a non-compete clause is and why they are difficult to apply in Louisiana.

Louisiana courts will reform a non-compete clause in limited circumstances. It is not possible to reform a non-competition clause that does not deny a valid geographical area or refuses it entirely under the statute. [27] In the absence of a specific geographic area, the non-competition clause cannot be isolated and cannot be reformed. [28] However, if the non-competition clause contains, in addition to an existing geographical restriction, an overly broad catch-all declaration, the court will remove the broad catch-all declaration and apply the rest of the existing non-competition clause. [29] In addition, an agreement containing an invalid non-compete clause can be dissociated and implemented as long as the agreement contains a deterrence clause. [30] Given the reluctance of Louisiana courts to reform and separate non-competition prohibitions, the safest practice for employers would be to design non-competition prohibitions that are strictly in accordance with the status. As this article shows, the development of competition agreements with several states, including Louisiana, is problematic. A non-compete clause in Louisiana requires much more than common sense.

All requirements of Louisiana`s Statute Revised Statute No. 23:921 must be met for a valid non-compete agreement in Louisiana. One approach is to exclude Louisiana from your non-compete agreements with several states, with a separate agreement for Louisiana, in accordance with Louisiana law. This protects your customers` business in today`s competitive marketplace. [15] Envtl. Safety – Health Consulting Servs., Inc. v. Fowler, 2019-0813 (The.

App. 4 Cir. 3/11/20) (maintenance of the non-competition agreement limited to two years after the end); USI Ins. Services, LLC v. Tappel, 09-149 (La.App. 5. Cir. 11/10/09) 28 So.3d 419 (The contract that prevents the worker from competing with the employer`s business or asking the employer`s clients for a period of five years was contrary to the law governing these agreements and was therefore unenforceable). In the event of a breach of contract, the statute of limitations – called a “prescription” in Louisiana – is ten years. [34] However, note that in the case of an older and long-standing non-competition clause that predates the current 2003 statute, these agreements are interpreted in accordance with Louisiana`s earlier and somewhat more restrictive law.

The reason is that the Louisiana courts have refused to retroactively apply the state`s non-compete clause. [35] Multinational competition bans are commonplace.