Enforceability of Non-Solicitation Agreements in Louisiana:

Non-solicitation agreements, which permit employment in the same area but prohibit direct recruitment of the former company’s contacts, are less restrictive than non-competes and are typical in sales-heavy businesses.  Non-solicitation agreements must have certain elements in order to be enforceable in Louisiana. Non-solicitation agreements are not specifically prohibited by law, but they nevertheless need to be reasonable in scope and duration, unlike non-compete agreements, which are subject to stringent statutory standards under La. R.S. 23:921.

What is a Non-Solicitation Agreement?

A non-solicitation agreement, which is frequently included in employment contracts but has varying enforceability by state, is a contract that prohibits a departing employee or partner from poaching the former company’s clients, customers, or other employees for a predetermined amount of time, protecting business relationships and confidential information.

They prevent former employees from persuading long-standing clients to transfer to a different business or their own endeavor.  Further, an anti-poaching clause bans former workers from “poaching” coworkers.  Frequently included in more comprehensive employment contracts, it can cover clients, customers, suppliers, vendors, and other important business partners.

Requirements for Enforceability:

The limitations of the agreement must be reasonable.  According to court decisions, an employee’s right to approach former coworkers or clients should not be permanently restricted by non-solicitation clauses.  For instance, a clause that forbids solicitation without a specified time frame might not be upheld.

Non-solicitation agreements must have a reasonable time range even though they do not have the same strict standards as non-compete agreements. Courts have ruled that clauses without a precise time limit are null and void. For example, a non-solicitation agreement without a specified length or that is open-ended may be declared unenforceable.

The agreement should specify exactly which clients or staff are covered by the non-solicitation clause. Vague terminology may make enforcement difficult.

Jurisprudence Regarding Non-Solicitation Agreement:

The significance of these standards was brought to light in a recent case, Brown & Root Industrial Services, LLC v. Farris.  A non-solicitation agreement without a specified duration was declared unconstitutional by the Louisiana Court of Appeal, which emphasized that such agreements must be reasonable and not place permanent limitations on former employees.

The court acknowledged that, in contrast to non-compete agreements, employee non-solicitation agreements are “not expressly disfavored by law” since they only limit who they can hire rather than forbidding them from practicing their trade.  Rather, the scope and length of such agreements must be appropriate.  What is reasonable will depend on the specific facts and circumstances.

Louisiana Business Law Attorneys:

We are a Gretna law firm that has served the New Orleans area since 1980.  Our experienced business lawyers are well versed at business and contract law and can help you prepare or negotiate non-solicitation agreements.  We take pride in offering a personal and trusted experience.  Call us today for a free consultation and find out why so many of our clients come back to us.