Noncompete Agreements

In Moores Pump and Supply, Inc. v. Laneaux, 727 So.2d 695 (La. App. 3d Cir. 1999), the Louisiana Third Circuit Court of Appeal upheld a preliminary injunction against a former employee of Moores Pump and Supply, Inc. (Moores). The former employee was enjoined from soliciting customers of Moores, from recruiting Moores employees, and from engaging in operations for a competitor of Moores within a 43-parish area served by Moores. This preliminary injunction was based upon a noncompete agreement signed by the former employee. The former employee argued that the noncompete agreement was not enforceable on various grounds. By statute in Louisiana, except for specific exceptions, contracts not to compete or engage in a profession are null and void. One exception is that an employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of his employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein for a period not to exceed two years from termination of employment. The court found this exception applicable, rejecting the employee's arguments that the geographic area was overly broad, that he did not understand the agreement he signed, and that the noncompete agreement was not given to him until three weeks after he commenced employment (at which time he was in no position to refuse to sign it).