Make a Louisiana Non-Compete Agreement

Applicable State Laws - RS 23:921 

Louisiana imposes various restrictions on non-compete agreements. Though they are generally disfavored, the state will uphold them as long as they are reasonable in time, scope, and geographic region. This is specified as a time period of no more than two (2) years, and the geographic location is restricted to only the cities or municipalities where the company conducts business.

Furthermore, the state imposes restrictions on the following professionals:

• Car Salesman - any non-compete agreement that prohibits an automobile salesperson from selling vehicles is unenforceable.
• Real Estate Licensees - Professionals with a real estate license must be able to back out of a non-compete agreement before midnight of the third day after the agreement has been executed. The agreement can only be valid for a maximum of two (2) years and must be printed in a bold font that is no smaller than size 10. These agreements must also be limited to the area where the employer conducts business.

Protect your Louisiana business by also using a Louisiana non-disclosure agreement form. Download a Louisiana non-disclosure agreement form now!

How to Write a Louisiana Non-Compete Agreement

To write a Louisiana non-compete agreement, first review Louisiana's statute on non-competes as well as their limitations. Include the following clauses:

• Purpose. This clause explains the purpose of the non-compete: to protect the confidential information of the business. It also serves to identify the parties and their roles and gives the effective date of the contract. It may also state that confidential information will be referred to as "proprietary information."
• Non-compete. This clause explains the time restriction (which in Louisiana cannot be greater than two years), geographical area restriction, general or specific business practices, client and customer solicitation, working for general or specific competitors, general or specific business activities (with certain exceptions, including car sales), and employee solicitation.
• Time period. This clause may restate the time limit and explain when it begins, either at the beginning of the employment relationship or when it is terminated.
• Purchase option. This clause explains whether your business allows the signing party to be released from the contract by paying a certain amount of money. If so, the amount is listed in this clause.
• Jurisdiction. This clause states that Louisiana laws will be used to govern the agreement.
• Confidential information. This clause states that "confidential information" as used throughout the agreement refers to any and all technical and non-technical information provided by your business that includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other information regarding your business or any of your customers, clients, consultants, or licensees that is disclosed to the signing party under the terms of the agreement.
• Permitted disclosure. This clause explains when confidential information is no longer confidential and becomes disclosed. For example, when information is made public through no fault of the signing party, when information is discovered by the signing party on their own without a breach of another party, or when your business provides written consent to disclose certain information to the public.
• Confidentiality. This clause states that the signing party acknowledges the information they may access is confidential and they agree they will not directly or indirectly disclose it to another party unless they first receive written consent from your business. They also agree they may not use the information for any reason other than to further your business without first receiving written consent from your business.
• Consultants and employees bound. This clause states that the agreement binds both consultants and employees to keep confidential information in the strictest of confidence and that they are on a need-to-know basis.
• Return of materials. This clause states when the non-compete agreement is terminated or when requested by your business, the signing party is obligated to return all documents and other tangible material that represents the confidential information and any copies that exist as soon as possible. It also states that the business will notify the signing party upon discovering any loss or unauthorized disclosure of confidential information.
• Remedies. This clause explains the remedies that your business is entitled to pursue according to Louisiana law if the former employee breaches the agreement. Examples include the recovery of court costs, the recovery of reasonable attorney fees, the award by a Louisiana court of a temporary restraining order or preliminary injunction against the unauthorized use of the information, etc., as well as all other remedies as provided by state law or as a matter of equity.
• Choice of law. This clause states that the parties agree that Louisiana laws are chosen to govern the agreement.
• Entire agreement. This final clause states that the entire agreement may be amended in writing, but only if both parties sign the amendment.

The parties must sign and print their names. The signatures should be dated. The parties should each receive a copy of the finalized document for their records.