Non-compete agreements, also known as restrictive covenants, are common in many employment contracts. They are designed to prevent employees from competing against their former employer for a certain amount of time after leaving the company. However, the enforceability of non-compete agreements varies from state to state, with some states prohibiting them altogether.
In Louisiana, non-compete agreements are generally enforceable as long as they are reasonable in terms of duration, geographic scope, and the type of activity that is prohibited. This means that if a non-compete agreement is too restrictive or goes beyond what is necessary to protect the employer`s legitimate business interests, it may be deemed unenforceable by the court.
To be considered reasonable, a non-compete agreement must be limited in duration. In Louisiana, a non-compete agreement should not exceed two years in length. Additionally, the agreement must be geographically reasonable, which means that it should only apply to a specific geographic area where the employer operates. Finally, the type of activity that is prohibited must be reasonable and related to the employee`s former job responsibilities.
It is worth noting that Louisiana law also includes a “blue pencil” provision, which allows a court to modify a non-compete agreement to make it reasonable and enforceable. This means that if a non-compete agreement is found to be overly restrictive, a court may modify it to make it more reasonable and enforceable.
Furthermore, Louisiana law requires that non-compete agreements be supported by valuable consideration, such as a job offer or promotion. In other words, an employer cannot simply require an employee to sign a non-compete agreement without offering something of value in return.
Overall, non-compete agreements are enforceable in Louisiana, but they must be reasonable in terms of duration, geographic scope, and the type of activity that is prohibited. Employers should carefully draft non-compete agreements to ensure that they are enforceable and do not violate any state laws. Likewise, employees should review any non-compete agreements carefully and seek legal advice if necessary.
