Louisiana Law on Non-Compete Agreements: What You Need to Know
Non-compete agreements, also known as restrictive covenants, are agreements between an employer and employee that restrict what the employee can do after leaving the job. These agreements can limit an employee`s ability to work for a competitor, start a competing business, or even work in the same field for a specific time period. In Louisiana, non-compete agreements are heavily regulated by state law. Here is what you need to know.
Requirements for Valid Non-Compete Agreements in Louisiana
In Louisiana, non-compete agreements are only valid if they meet certain requirements. Firstly, the agreement must be in writing and signed by the employee. Secondly, the agreement must be supported by consideration, meaning that the employee must receive some type of benefit in exchange for signing the agreement. Typically, this benefit is a job offer or continued employment. Finally, the non-compete agreement cannot be overly restrictive and must be designed to protect a legitimate business interest of the employer, such as a trade secret or confidential business information.
Duration and Geographic Scope of Non-Compete Agreements
Louisiana law limits the duration and geographic scope of non-compete agreements. The agreement cannot last longer than two years from the end of employment, and the geographic limitation must be reasonable and narrowly tailored to the specific business interest being protected. For example, if a company only operates in a certain city, the non-compete agreement cannot restrict an employee from working in a different city or state.
Enforcement of Non-Compete Agreements
Enforcement of non-compete agreements in Louisiana can be difficult. If an employer tries to enforce an overly restrictive non-compete agreement, a court may rule it unenforceable. Additionally, Louisiana law requires that the employer have a vested business interest that is being protected by the non-compete agreement. If that business interest is not legitimate or is not being threatened by the employee`s post-employment actions, a court may also rule the agreement unenforceable.
Exceptions to Non-Compete Agreements
There are exceptions to non-compete agreements in Louisiana. For example, non-compete agreements cannot be enforced against employees who are terminated without cause, employees who earn below a certain salary threshold, or employees who work in certain industries such as broadcasting or news media.
Non-compete agreements can be an important tool for employers to protect their business interests, but they must be crafted carefully to comply with Louisiana law. If you are an employer considering drafting a non-compete agreement or an employee faced with signing one, it is essential to consult with an experienced attorney to ensure that your rights are protected.