re: Professional non-compete clauses

Comet Industries, Inc. v. Colvin, 600 So.2d 89 (La. App. 2d Cir. 1992); C's Discount Pharmacy, Inc. v. Louisiana CVS Pharmacy, L.L.C., 2013 WL 5505727 (E.D. La. 2013). Id. Plunk v. LKQ Birmingham, Inc., 2013 WL 5913755 (W.D. La. 2013). But see Brock Services, L.L.C. v. Rogillio, 936 F.3d 290 (5th Cir. 2019) (The district court did not err in reforming the overbroad geographical scope of a non-competition agreement “to narrow the provision's scope by removing catch-all clauses that went beyond the listed parishes.”); Heard, McElroy & Vestal, LLC v. Schmidt, 280 So. 3d 806 (La. Ct. App. 2d Cir. 2019) (Trial court did not abuse its discretion in engaging in “fairly extensive revisions” of noncompetition agreement in which the “trial court narrowed the geographic range to locations where [the plaintiff] conducted business activities, removed sentences from the solicitation provision, deleted part of the definition of client and deleted the provision that prohibited [the defendant] from being employed by [the plaintiff's] competitors.”). LSA-R.S. 23:921. See also Comet Industries, Inc. v. Lawrence, 600 So.2d 85 (La. App. 2d Cir. 1992). Smith v. Commercial Flooring Gulf Coast, L.L.C., 2019-502 La. App. 4 Cir. 10/9/19, So. 3d , 2019 WL 5073582 (La. Ct. App. 4th Cir. 2019) (Although the district court did not err in granting a preliminary injunction to enforce a noncompetition agreement, the court did err in extending it to a period of time not exceeding two years from the judgment because (1) the order would have effect for the maximum duration of noncompetition agreements, thus making it functionally a permanent injunction, and (2) the judgment exceeds the maximum period for noncompetition clauses because it extends for two years from the judgment, not from the time of the date of plaintiff's termination of employment.); Southeastrans, Inc. v. Landry, 2021 WL 972098 (W.D. La. 2021) (Section 23:921 of the Louisiana Revised Statute does not apply to an agreement not to solicit employees, and thus these agreements are not prohibited by statute. It does, however, require a “specific listing of every parish in which an employer intends to restrict competition and in which that employer carries on a like business for an agreement not to compete or to solicit customers to be valid and enforceable.”); Labby v. Labby Memorial Enterprises, LLC, 2020 WL 4586898 (W.D. La. 2020) (Non-competition agreement that purported to last 12 years terminated after two years in accordance with Section 23:921(B) of the Louisiana Revised Statutes.); Delta Fuel Co., Inc. v. Abbott, 515 F. Supp. 3d 564 (W.D. La. 2021) (A tolling provision in an employment contract that attempted to extend the two-year period in a non-competition agreement was unenforceable.). Daiquiri's III on Bourbon, Ltd. v. Wandfluh, 608 So.2d 222 (La. App. 5th Cir. 1992), writ denied Jan. 8, 1993.

In addition, the courts have held covenant not to compete was unenforceable where a doctor, who was a partner in partnership, signed an employment agreement in the capacity of an employee rather than a partner. Kimball v. Anesthesia Specialists of Baton Rouge, 809 So.2d 405 (La. App. 1st Cir. 2001). See also, Creative Risk Controls, Inc. v. Brechtel, 847 So.2d 20 (La. App. 5th Cir. 2003), the court held that a contract did not contain a non-compete clause to be breached, but it did contain a non-solicitation clause and the provisions of R.S. 23:921 also applied to it.

In contrast, see Richard Berry & Assoc. v. Bryant, 845 So.2d 1263 (La. App. 5th Cir. 2003), where the court found the R.S. 23:921 restricting enforcement of non-compete agreements applies to non-compete agreements with independent contractors on same basis as if independent contractor were an employee. A real estate broker attempted to enforce non-compete clause in contract with former independent contractors.

On the other hand, it has been held that the non-solicitation language of the statute does not apply to independent contractors. See Iberia Financial Services, LLC v. Mitchell, 2019-413 La. App. 3 Cir. 6/17/20, So. 3d , 2020 WL 3265136 (La. Ct. App. 3d Cir. 2020) (“Independent contractors cannot be refrained from soliciting customers. As such, we find that a claim for non-solicitation against an independent contractor does not exist.”).

In Terra Cotta's Cafe, L.L.C. v. Poole, 904 So.2d 918 (La. App. 3d Cir. 2005), reh'g denied, (July 13, 2005) and writ denied, 924 So.2d 174 (La. 2006), the appeal court reversed, holding that the evidence failed to support the trial court's finding that a non-compete agreement had been breached based in part on the lower court's overly broad interpretation of the term "cater."

Overly broad language was fatal to a non-compete agreement in Hose Specialty & Supply Management Co., Inc. v. Guccione, 865 So.2d 183 (La. App. 5th Cir. 2003), where the court refused to retroactively apply amendments to R.S. 23:921. See also Sola Communications, Inc. v. Bailey, 861 So.2d 822 (La. App. 3d Cir. 2003) (agreement too broad; amendments not retroactive), and Clear Channel Broadcasting, Inc. v. Brown, 901 So.2d 553 (La. App. 4th Cir. 2005) (no retroactive application of amendments to non-compete entered into prior to the effective date of the amendments); Paradigm Health System, L.L.C. v. Faust, 2016-1276 La. App. 1 Cir. 4/12/17, 2017 WL 1379096 (La. Ct. App. 1st Cir. 2017) (finding a noncompetition agreement that prohibits the defendant from engaging in the “practice of medicine” was overly broad and unenforceable and declining to find that … language in a noncompete agreement that prohibits an employee from engaging in a business similar to the employer is always in compliance with Louisiana's noncompete statute); Environmental Safety & Health Consulting Services, Inc. v. Fowler, 2019-813 La. App. 4 Cir. 3/11/20, So. 3d , 2020 WL 1173587 (La. Ct. App. 4th Cir. 2020) (Agreement prohibiting former employee from engaging in competition or solicitation was enforceable when it provided a two-year limitation, proscribed forty parishes, and defined the relevant business as “oil and hazardous spill containment.”); Board of Supervisors of Louisiana State University v. McCalmont, 339 So. 3d 1261 (La. Ct. App. 2d Cir. 2022) (declining to enforce a non-compete agreement between a teaching hospital and an obstetrician/gynecologist, even though the time and geographic scope were properly defined, because the “language limiting [the defendant's] livelihood was so overly broad as to be unenforceable” insofar as it attempted to restrict her “from using her medical license in any field of medicine at all, not just as an OBGYN but as a doctor in any capacity in Caddo or Bossier Parishes.”); Terral v. AG Resource Holdings, LLC, 335 So. 3d 1009 (La. Ct. App. 2d Cir. 2022) (finding unenforceable a noncompetition agreement that prohibited “the plaintiff from participating in any activity related to selling crop insurance or extending loans or lines of credit to farmers anywhere in the United States for a period of five years”).

tl;dr?

If you define your business properly, limit the geographical region narrowly, and meet the other statutory requirements, you can win a noncompete suit as an employer. Here, your lawyer must have drafted your agreement poorly, knew you couldn't win with it, and then told you that long parade of terrible instead of just telling you your agreement is unenforceable. Get a new lawyer to review your agreement.