Employee Non-Compete Agreement and Enforceability Memo — Louisiana

LOUISIANA Employee Non-Compete Agreement and Enforceability Memo

Quick-Reference Summary

Part A — Enforceability Memo

TO: [Hiring Manager / General Counsel / Client]
FROM: [Attorney Name], [Firm]
RE: Enforceability of Proposed Non-Compete Restriction Against [Employee Name] Under Louisiana Law
DATE: [__/__/____]

1. Executive Summary — Civil-Law Strict Construction

Louisiana, the only U.S. civil-law jurisdiction, treats non-competes with skepticism. La. R.S. 23:921(A)(1) declares that "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." Only those covenants that strictly satisfy the exceptions in § 23:921 — and that satisfy them precisely — are enforceable.

For employee non-competes, the relevant exception is § 23:921(C), which permits a restraint only if:

(a) The agreement expressly identifies the parish(es) or municipality(ies), or parts thereof, where competition is restrained;
(b) The employer actually carries on a like business in each listed location;
(c) The duration does not exceed two (2) years from termination of employment; and
(d) The employer's business is defined with reasonable specificity.

Louisiana courts strictly construe non-competes in favor of the employee (SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So. 2d 294 (La. 2001)) and generally refuse to reform a defective covenant. A single material defect voids the entire restraint.

2. Geographic Specificity — The #1 Defect

Failure to specify parishes/municipalities by name is the most common reason Louisiana non-competes fail. Case-law illustrations:

Drafting Implication: List every parish (or municipality, or part of a parish/municipality) by name. Cross-reference against current operations records to confirm "like business" is actually conducted. Update the list before each new hire and before each enforcement action.

3. Business Definition Requirement

Louisiana courts have repeatedly struck non-competes that define the employer's business too broadly:

• A speech therapist's non-compete prohibiting work "in a business similar to that of [employer]" was unenforceable because it did not adequately define the business.
• A doctor's non-compete prohibiting the "practice of medicine" was overbroad where the employer was a pain-management practice.
• A non-compete prohibiting "public accounting or tax preparation in any fashion" was overbroad.

Drafting Implication: Define the Business with specificity tied to the actual services provided. Use precise terminology (e.g., "pain management medical services," "commercial HVAC installation and service," "industrial waste transportation and oil-spill containment"), not generic terms.

4. Two-Year Maximum Duration

§ 23:921(C) imposes an absolute 2-year cap from termination of employment. Courts have consistently invalidated agreements exceeding 2 years. A "step-down" clause within the agreement (e.g., "if 3 years is unenforceable, then 2 years") is generally not honored — Louisiana courts will void the entire covenant rather than reform.

Best practice: Draft for 2 years exactly, or shorter where appropriate. Do NOT exceed 2 years even with reformation language.

5. Customer Non-Solicit (Solicit Former Employer's Customers) vs. Employee No-Poach

Customer Non-Solicit. Restrictions on soliciting the former employer's customers are expressly governed by § 23:921(C) ("refrain from . . . soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof"). Same parish-identification + 2-year + like-business requirements apply.

Employee No-Poach. Restrictions on soliciting the former employer's employees (anti-poaching) are NOT within § 23:921. The 2024 First Circuit decision in Brown & Root Indus. Servs., LLC v. Farris held § 23:921 does not apply to employee non-solicitation; such agreements need only be "reasonable in scope and duration." However, the Brown & Root court invalidated a no-poach clause that lacked a clear durational limit (and refused to reform it). Best practice: Cap employee no-poach at 12 months (some courts have accepted 12; one declined 18 in non-solicit context).

6. No Blue Pencil / No Reformation

Louisiana civil-law courts are hostile to reformation of defective non-competes. The 2024 Brown & Root v. Farris decision refused to enforce a reformation clause and declined to "fashion" a new term where the original was "purposely silent." Earlier cases under § 23:921(C) have likewise refused to save defective non-competes through reformation, even with express reformation language.

Drafting Implication: There is no safety net. Get the parish list, business definition, and duration RIGHT the first time.

7. Choice of Forum / Choice of Law — § 23:921(A)(2)

Choice-of-forum and choice-of-law clauses in any employment contract or collective bargaining agreement (not just non-competes) are null and void under § 23:921(A)(2), unless "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." Pre-dispute choice-of-forum/law clauses are unenforceable in Louisiana.

This means an employer cannot, in the non-compete itself, select non-Louisiana law to evade § 23:921's strictures for Louisiana-based employees.

8. Consideration

Continued at-will employment is sufficient consideration for a non-compete in Louisiana. There is no statutory income threshold and no requirement of additional consideration (unlike some other states).

9. Civil-Law Terminology and Procedure

• Use "petition" (not "complaint") for the initial pleading.
• Use "prescription" (not "statute of limitations") for limitations periods.
• Cite La. Civ. Code articles where relevant (e.g., arts. 1965-1968 on cause; art. 1997 on bad-faith obligor damages; art. 2000 on legal interest).
• General breach-of-contract prescription is 10 years (La. Civ. Code art. 3499); enforcement actions typically proceed by injunction.

10. Recommended Approach for This Engagement

☐ Confirm current employer operations and assemble a specific parish/municipality list where "like business" is actually conducted.
☐ Define the Business with precise, narrow terminology tied to actual services.
☐ Draft duration as exactly 2 years from termination (or shorter).
☐ Draft customer non-solicit and employee no-poach in separate sections with appropriate scope.
☐ Pair with confidentiality + LUTSA trade-secret protection (independently enforceable).
☐ Omit pre-dispute choice-of-forum/law clauses (or limit to non-employment contexts).
☐ Document Employee's start date and the date the agreement is signed.
☐ Use Louisiana civil-law terminology in any enforcement filings (petition; prescription).

Part B — Non-Compete Agreement (Louisiana)

EMPLOYEE NON-COMPETE AND NON-SOLICITATION AGREEMENT — LOUISIANA

THIS AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date"), by and between [EMPLOYER NAME] ("Employer") and [EMPLOYEE NAME] ("Employee"), pursuant to La. R.S. 23:921.

Recitals

WHEREAS, Employer is engaged in the business of [________________________________] [DEFINE WITH SPECIFICITY — e.g., "providing industrial hazardous waste transportation, oil-spill containment, and environmental remediation services"] (the "Business");

WHEREAS, Employer actually carries on a like Business in each of the parishes (and/or municipalities) listed in Exhibit A;

WHEREAS, Employee will have access to Employer's confidential information, trade secrets, customer relationships, and goodwill;

WHEREAS, the parties intend that this Agreement comply strictly with La. R.S. 23:921(C) and the principles articulated in SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So. 2d 294 (La. 2001), and progeny; and

WHEREAS, Employee has had the opportunity to consult with independent counsel licensed in Louisiana.

NOW, THEREFORE, in consideration of Employee's continued employment and other good and valuable consideration, the parties agree as follows.

Section 1 — Definitions

1.1 "Business" means [DEFINE WITH SPECIFICITY — narrow, precise scope as required by Louisiana case law].

1.2 "Confidential Information" means non-public information of Employer including customer lists, pricing, business plans, financial data, vendor terms, processes, and proprietary methods.

1.3 "Trade Secrets" has the meaning ascribed in the Louisiana Uniform Trade Secrets Act, La. R.S. 51:1431 et seq.

1.4 "Customer" means a person or entity that purchased goods or services from Employer during the twelve (12) months preceding Employee's termination, AND with whom Employee had material business contact during such period.

1.5 "Restricted Parishes/Municipalities" means the parishes, municipalities, and/or parts thereof listed in Exhibit A, in each of which Employer actually carries on the Business as of the date of this Agreement and as of the date of Employee's termination of employment.

1.6 "Restricted Period" means the period commencing on Employee's termination of employment and continuing for two (2) years, which the parties acknowledge is the maximum permissible duration under La. R.S. 23:921(C).

Section 2 — Non-Compete Covenant (§ 23:921(C))

During Employee's employment and during the Restricted Period, Employee shall not, directly or indirectly, carry on or engage in a business similar to the Business within any of the Restricted Parishes/Municipalities, so long as Employer carries on a like Business therein. This covenant is entered pursuant to La. R.S. 23:921(C) and is intended to satisfy each statutory requirement: (a) it identifies the restricted geographic area by parish/municipality in Exhibit A; (b) the Business is defined with specificity in Section 1.1; (c) the duration does not exceed two years from termination; and (d) Employer carries on a like Business in each listed parish/municipality.

For purposes of this Section, "carrying on or engaging in a business similar to the Business" includes becoming employed by a competing business in a substantially similar role, as contemplated by La. R.S. 23:921(D).

Section 3 — Customer Non-Solicitation (§ 23:921(C))

During Employee's employment and during the Restricted Period, Employee shall not, directly or indirectly, solicit any Customer for the purpose of providing goods or services competitive with the Business, within any of the Restricted Parishes/Municipalities.

Section 4 — Employee Non-Solicitation (No-Poach)

For a period of twelve (12) months following Employee's termination of employment, Employee shall not, directly or indirectly, solicit, recruit, or hire any individual who was an employee of Employer during the six (6) months preceding Employee's termination, except through general solicitations (e.g., job postings) not specifically directed at Employer's employees. This Section is governed by general Louisiana law of reasonableness and is not subject to La. R.S. 23:921 (Brown & Root Indus. Servs., LLC v. Farris, La. App. 1st Cir. 2024).

Section 5 — Confidentiality and Trade-Secret Protection

5.1 Confidentiality. Employee shall not, during or after employment, use or disclose Confidential Information except in the performance of duties for Employer.

5.2 Louisiana Uniform Trade Secrets Act. Misappropriation of Trade Secrets is independently actionable under La. R.S. 51:1431 et seq., including injunctive relief, damages, exemplary damages (up to 2× actual damages), and reasonable attorney fees.

5.3 DTSA Whistleblower Notice (18 U.S.C. § 1833(b)). An individual shall not be held criminally or civilly liable under any federal or state trade-secret law for the disclosure of a trade secret that (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

5.4 Permitted Disclosures. Nothing in this Agreement prohibits Employee from (a) reporting suspected violations of law to government agencies; (b) participating in concerted activity protected by the NLRA; or (c) responding truthfully to a lawful subpoena.

Section 6 — Remedies

6.1 Injunctive Relief. Employee acknowledges that breach would cause irreparable harm to Employer, and Employer shall be entitled to seek injunctive relief in addition to damages.

6.2 Damages. Actual damages and, where authorized by Louisiana law (including LUTSA), exemplary damages and reasonable attorney fees.

6.3 Liquidated Damages (Optional — La. Civ. Code arts. 2005-2007). ☐ If selected: In addition to or in lieu of actual damages, Employee shall pay Employer liquidated damages of $[____] per breach, which the parties acknowledge is a reasonable pre-estimate of damages and not a penalty.

Section 7 — General Provisions

7.1 Governing Law. This Agreement is governed by the law of the State of Louisiana.

7.2 Forum. Any action arising under this Agreement shall be filed in the [____ Judicial District Court for the Parish of ____________] or, if appropriate, the U.S. District Court for the [Eastern / Middle / Western] District of Louisiana. The parties acknowledge that La. R.S. 23:921(A)(2) requires that any choice-of-forum or choice-of-law clause in an employment contract be ratified by the employee after the occurrence of the incident giving rise to the action; this Section 7.2 is provided for guidance only and is subject to that requirement.

7.3 Strict Construction. The parties acknowledge that Louisiana courts strictly construe non-compete agreements in favor of the employee. The parties have endeavored to draft this Agreement to comply precisely with La. R.S. 23:921(C).

7.4 No Reformation. The parties acknowledge that Louisiana courts generally do not reform defective non-compete covenants. The Restricted Parishes/Municipalities list, the Business definition, and the Restricted Period have been drafted to comply with statutory requirements and shall not be modified by the court except as expressly permitted by Louisiana law.

7.5 Severability of Independent Covenants. The non-compete (Section 2), customer non-solicit (Section 3), employee no-poach (Section 4), and confidentiality/trade-secret protections (Section 5) are intended to be independently enforceable. If Section 2 is held void in whole or in part, Sections 3, 4, and 5 shall continue in full force. If Section 3 is held void in whole or in part, Sections 2, 4, and 5 shall continue in full force.

7.6 Civil-Law Terminology. This Agreement is drafted with reference to Louisiana civil law. The term "petition" shall mean an initial pleading, and "prescription" shall mean the limitations period applicable under the Louisiana Civil Code.

7.7 Entire Agreement. This Agreement, together with any confidentiality and invention-assignment documents incorporated by reference, constitutes the entire agreement of the parties on the subject matter.

7.8 Survival. Sections 2, 3, 4, 5, 6, and 7 survive termination.

Signatures

Exhibit A — Restricted Parishes and Municipalities

Employer carries on a like Business in each of the following parishes, municipalities, or parts thereof, and Employee agrees that the non-compete and customer non-solicit covenants in this Agreement apply within each:

CRITICAL: Confirm that Employer ACTUALLY conducts business in each parish/municipality listed at the time of execution AND at the time of enforcement. Parishes where Employer does not conduct a like business cannot be included.

Part C — Pre-Signing Checklist

Geographic Specificity (§ 23:921(C))

☐ Exhibit A lists every parish and/or municipality by name (no generic references).
☐ Employer confirms it actually carries on a like Business in each listed location at the time of signing.
☐ Procedure in place to confirm Employer still conducts business in each listed location at the time of enforcement.
☐ No parish is included where Employer does not have actual operations.
☐ No "wherever the Company conducts business" or similar generic language.

Business Definition (§ 23:921(C))

☐ Section 1.1 defines the Business with specificity tied to actual services or products.
☐ Avoided generic terms ("any business similar to," "any aspect of" — language that has been struck).
☐ Cross-referenced against case law to ensure definition is not overbroad relative to Employer's actual line of business.

Duration (§ 23:921(C))

☐ Restricted Period is 2 years from termination (not longer).
☐ No tolling provision purporting to extend beyond 2 years.
☐ No "step-down" language for duration (Louisiana courts will not reform).

Customer Non-Solicit (§ 23:921(C))

☐ Customer non-solicit limited to same Restricted Parishes/Municipalities.
☐ Customer non-solicit limited to 2 years.
☐ Customer definition tied to material business contact during final 12 months.

Employee No-Poach

☐ Duration capped at 12 months (per Brown & Root v. Farris skepticism of longer terms).
☐ Restriction tied to identifiable employees (employed during 6 months preceding termination).
☐ Allows general solicitations (e.g., public job postings).

Confidentiality and Trade Secrets

☐ LUTSA trade-secret protection drafted to survive independently if non-compete is struck.
☐ DTSA whistleblower notice (18 U.S.C. § 1833(b)) included.
☐ NLRA / whistleblower / subpoena carve-outs included.

Choice of Forum / Law (§ 23:921(A)(2))

☐ No pre-dispute choice-of-forum/law clause purporting to select non-Louisiana law for Louisiana-based employees.
☐ Or, if such clause is included, expressly conditioned on post-incident ratification per § 23:921(A)(2).

Civil-Law Terminology

☐ Agreement and any enforcement filings use "petition" (not "complaint") and "prescription" (not "statute of limitations").
☐ References to La. Civ. Code articles where applicable.

Independent Contractors

☐ If Employee is an independent contractor, confirm written contract exists and § 23:921(C) extension applies.
☐ Restricted Period limited to 2 years from last work performed under the contract.

Recordkeeping

☐ Signed original retained.
☐ Documentation of Employer's actual operations in each listed parish/municipality (lease records, business licenses, sales records).
☐ Documentation of Employee's start date and date of signing.
☐ Evidence of opportunity to consult counsel (signed acknowledgment).

Pre-Enforcement Re-Check

☐ Re-confirmed Employer still operates in each parish/municipality listed at time of enforcement.
☐ Re-confirmed Restricted Period (2 years from termination) has not expired.
☐ Confirmed enforcement is in Louisiana state court (or appropriate federal court) per § 23:921(A)(2).
☐ Anticipated strict-construction doctrine in litigation strategy.
☐ Considered whether trade-secret claim under LUTSA is a stronger vehicle than non-compete.

Sources and References

• La. R.S. 23:921 — Louisiana State Legislature — https://legis.la.gov/Legis/Law.aspx?d=84015
• Louisiana Uniform Trade Secrets Act, La. R.S. 51:1431 et seq. — https://legis.la.gov/legis/Law.aspx?d=98031
• La. Civ. Code arts. 1965-1968 (Cause), art. 1997 (bad-faith obligor), art. 2000 (legal interest), art. 3499 (10-year prescription) — Louisiana State Legislature
• SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So. 2d 294 (La. 2001) — https://law.justia.com/cases/louisiana/supreme-court/2001/2001-c-1695-2.html
• Brown & Root Indus. Servs., LLC v. Farris (La. App. 1st Cir. 2024) — discussed at Ogletree Deakins, https://ogletree.com/insights-resources/blog-posts/louisiana-court-rules-employee-nonsolicitation-agreements-are-not-governed-by-noncompete-law-but-duration-must-be-limited/
• Vartech Sys., Inc. v. Hayden, 951 So. 2d 247 (La. App. 1st Cir. 2006)
• Fisher Phillips, "Non-Compete Laws: Louisiana" — https://www.fisherphillips.com/a/web/wvNaA6zrZvEvNCZaYB74FC/12722-non-compete-laws-louisiana-5-519-8201.pdf
• Carver Darden, "Non-Compete Agreements in Louisiana" (2019) — https://www.carverdarden.com/hubfs/2019_NoncompetesInLA.pdf
• JD Supra, "Everything You Need to Know (And Probably Don't) About [Louisiana Non-Competes]" — https://www.jdsupra.com/legalnews/everything-you-need-to-know-and-79961/
• Defend Trade Secrets Act, 18 U.S.C. § 1836 — https://www.law.cornell.edu/uscode/text/18/1836
• DTSA Whistleblower Immunity, 18 U.S.C. § 1833(b) — https://www.law.cornell.edu/uscode/text/18/1833

This template is provided for informational purposes only and does not constitute legal advice. Louisiana, the only U.S. civil-law jurisdiction, strictly limits employee non-competes under La. R.S. 23:921 — parish-by-parish identification is mandatory, the maximum duration is 2 years, the employer's business must be defined with specificity, and courts generally do NOT reform defective covenants. Choice-of-forum and choice-of-law clauses in pre-dispute employment contracts are null and void. Do not rely on this template without review by a Louisiana-licensed employment attorney.

Prepared for use on ezel.ai — a legal template platform for solo and small-firm practitioners.