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What to know about enforcing a noncompete agreement in Louisiana

On Behalf of | Mar 21, 2024 | Labor & Employement

Employers can benefit from proactively protecting against the potential future misconduct of workers. Employees given access to company resources and trade secrets could misuse those privileges for personal gain. Embezzlement or the misuse of trade secrets could do real harm to an organization.

One of the tools businesses might use to limit employee-related liability is a noncompete agreement. When integrated into a valid employment contract, a noncompete agreement could prevent a former worker from taking a job with a direct competitor or starting a competing business. A noncompete agreement does not innately prevent competition but instead gives an employer and opportunity to respond to economic activity that could infringe on the company’s rights.

The state limits noncompete agreement enforcement

While there has been rumbling about changes at the federal level that could prohibit the use of noncompete agreements, those changes have yet to occur. For the time being, noncompete agreements remain legal at the national level and enforceable in Louisiana. However, employers seeking to enforce noncompete agreements generally need to prepare carefully before taking the matter to court. First, a company needs to review the noncompete agreement to ensure that it complies with Louisiana state law.

For example, it is typically only possible to enforce noncompete agreements for two years after someone leaves the company. Noncompete agreements with longer durations or other overly broad terms may not hold up in civil court proceedings. Additionally, the employer seeking to enforce the agreement needs proof of economic activity that violates the contract. The business plaintiff initiating the lawsuit also typically needs to seek a specific solution. Some businesses seek an injunction that can prevent future economic activity. Other companies may request financial reimbursement for the economic consequences of unfair competition.

Employees accused of violating a noncompete agreement have the option of defending against any allegations a that former employer files. Defense strategies could range from proving that the original agreement was invalid to establishing that their economic activity did not technically violate the contract.

Yet, employers have the ability to enforce noncompete agreements in certain scenarios. Understanding what is necessary for noncompete enforcement can help employers determine if going to court is the best option in a specific scenario.