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I sold my business in Louisiana and signed a noncompete. The…

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I sold my business...

I sold my business in Louisiana and signed a noncompete. The non compete is in my employment contract and I was wondering if that would hold up. I thought it had to be it’s own contract in Louisiana?

Lawyer's Assistant: Is the employment agreement "at will," union, full time or part time?

It’s full time at will

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It also stated every parish in Louisiana in the non compete but listed Baton Rouge instead of East Batin Rouge and West Baton Rouge.

Submitted: 6 months ago.Category: Employment Law
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12/27/2017
Employment Lawyer: Ray, Employment lawyer replied 6 months ago
Ray
Ray, Employment lawyer
Category: Employment Law
Satisfied Customers: 48,280
Experience: 30 years in Employment law
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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

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Employment Lawyer: Ray, Employment lawyer replied 6 months ago

It is very difficult to enforce a noncompete in Louisiana.Your may well not be enforceable under Louisiana law.

Here Louisiana contracts that restrain someone’s right to work are presumed to be invalid. Moreover, Louisiana law prevents efforts to avoid the applicability of Louisiana’s strict law in contractually providing for the applicability of another state’s law in a non-compete agreement involving an employer/employee relationship. In short,

The validity of non-compete agreements like yours in Louisiana is strictly controlled by a single statutory provision (La. R.S. 23:921) and its judicial interpretation. La. R.S. 23:921(A)(1) begins with the general prohibition against any agreement whereby anyone is restrained from exercising a lawful profession, trade, or business, unless one of the narrow exceptions to the general prohibition contained therein is satisfied. It provides:

Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this Section, shall be null and void.

Louisiana has long had a strong public policy against non-compete agreements. Because these agreements are in derogation of the common right, the right to work in your chosen field, Louisiana jurisprudence has narrowly construed the exceptions to the general prohibition listed in La. R.S. 23:921. These exceptions, for the most part, are based upon relationships. The list of exceptions include the employee/employer relationship, the sale of the goodwill of a business, the dissolution of a partnership, the franchisor/franchisee relationship, the employer/computer employee relationship, the corporation/shareholder relationship, the partnership/partner relationship without consideration of any possible dissolution, and the limited liability company/member relationship.

Once it is demonstrated that a particular non-compete agreement falls within one of the listed exceptions, most Louisiana courts require a valid non-compete agreement to contain an area of prohibition described by parishes, municipalities, or parts thereof, together with a term of no longer than two years from date of termination of the relationship. These requirements are derived directly from statutory language.

While not contained within the statute, some Louisiana courts also require a valid non-compete agreement to define narrowly and accurately the business in which the individual is prohibited from competing. Other Louisiana courts deny the need for this additional non-statutory-based requirement. If the business is defined within the agreement, however, the definition must be narrow and accurate.

Louisiana further protecting the right of employees to work in their chosen field of employment, La. R.S. 23:921 prohibits a contract of employment from designating by contractual provision the applicability of another state’s law unless the employee re-confirms such choice of law after the occurrence of the incident which is the subject of the dispute. Thus, once an employee is terminated and begins competing with their ex-employer, the applicability of the provision in the non-compete agreement selecting the applicability of another state’s law is only valid if the employee agrees to it again, once their ex-employer complains about the alleged violation of the non-compete agreement.

La. R.S. 23:921(2) provides:

(2) The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other person or entity includes a choice of forum clause or choice of law clause in an employee’s contract of employment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clause in any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action.

As set out herein, drafting an enforceable non-compete agreement in Louisiana requires much more than reasonableness. All requirements of La. R.S. 23:921 must be met for a valid non-compete agreement in Louisiana.

You may take your chances here that the noncompete does not meet the requirements set out above.You may have great facts to dispute it if they try to enforce it.

I appreciate the chance to help you tonight.Thanks again.

If you can positive rate 5 stars it is much appreciated.

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Customer reply replied 6 months ago
will a noncompete hold up if it’s within my employment agreement?
Employment Lawyer: Ray, Employment lawyer replied 6 months ago

It is unlikely they can enforce it give the restrictions under the law above.Louisiana does not favor these kids of agreements at all.

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