Non-Competition Agreements in Louisiana

Non-competition agreements, also known as covenants not to compete or restrictive covenants, are employment contracts used by employers to limit the ability of an employee to compete with the employer by stealing customers or trade secrets. Enforceable agreements must strike a balance between protecting the employer's legitimate business interests from an unfair competitive advantage with the employee's right to work in a field for which he or she is trained.  In general, courts decide what is considered reasonable or not reasonable by examining the type and size of the business, how long and over what geographic area the restrictions apply and whether adequate consideration, or benefit, was given the employee at the time the agreement was signed.

The Law In Louisiana

The Louisiana statute that governs non-competition agreements provides that, in general, any contract or agreement that restrains anyone from exercising a lawful profession, trade or business of any kind is prohibited.   The statute then specifically defines exceptions when the agreed upon restrictions are limited to specific geographic areas and last no longer than two years from the termination of employment.  A 2006 amendment to the law, however, specifically prohibits automobile dealerships from restricting former salespeople from selling automobiles.