Roedel Parsons Koch Blache Balhoff & McCollister

Tips for non-compete agreements in Louisiana

Protecting Your Business

Most business owners would agree that one of their biggest priorities is protecting their intellectual property, trade secrets or other sensitive/private data.

To that end, many employers attempt to implement non-compete agreements to keep their employees from leaving and taking with them a big chunk of the business.

However, as typically written, many non-compete agreements are simply unenforceable in Louisiana, as the state has a stricter standard than most as to enforceability of non-compete agreements.

If you want your non-compete agreement to be enforceable in Louisiana, it needs to comply with La. R.S. § 23:921. Primarily you need to make sure it contains:

• No more than a two-year duration

• A list of the specific parishes or cities where you do business and where you wish the non-compete to be effective

• A comprehensive description of what type of business you do

• Whether the employee will be prohibited from doing the described business, soliciting customers, and/or writing competing software

• A "savings clause" that states in the event the non-competition agreement is determined to be overly broad, that it will be reformed and reduced to the extent valid

Watch Out!

Courts in Louisiana typically disfavor the enforcement of non-compete agreements, so make sure to be as specific and reasonable as possible when drafting your non-compete. You want to make sure your former employees can still go out and earn a living.

Keep in mind that your agreement cannot be unlimited in scope geographically, so make sure you limit it to just those parishes or cities where you actually do business.

Also, if you intend to keep your former employee from operating a similar business and prevent them from soliciting your customers, you need to make separate agreements or sections for both activities, as Louisiana law views these as distinct agreements which both need to comply with La. R.S. § 23:921.

Finally, having an experienced business law attorney review your employment contracts or asset purchase agreements is not only a good idea, but it is critical in making sure you did not miss anything that might keep your non-compete from being enforced.

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