We’ve been discussing the topic of non-compete agreements in our last couple posts, focusing on some of the general requirements courts look for when determining the enforceability of these agreements. As we’ve noted, Louisiana case law does prescribe certain limitations on non-compete agreements, and we’ve already spoken about the two-year time limit, geographic limitations on the scope of activities restricted. Here we will focus on several other important points.
Employers in Louisiana are recognized as having a wide variety of protectable interests, which can include things like training, business expansion plans, financial information, management techniques and trade secrets. The latter category includes encompasses various aspects of the business which have independent economic value and which the business reasonably attempts to protect. There are some limitations, however, on the extent to which trade secrets may be enforced, so it is important to work with an experienced attorney.
Non-compete agreements are different from ordinary contracts in that no consideration—or quid pro quo—is necessary. This applies even to current employees in that continued employment is adequate consideration.
A final point we’ll make here is that courts in Louisiana are able to adjust non-compete agreements as needed when particular provisions are unenforceable. In other words, courts are able to strike unenforceable provisions while enforcing the remaining provisions. Businesses, of course, should strive for best practices around non-compete agreements as much as possible, not only to ensure their interests are protected but to ensure that they don’t run the risk of having a non-compete agreement challenged in court.