LOUISIANA NEWSFLASH

June 11, 2003

On June 10, 2003, the Louisiana Senate passed House Bill 1770 33 - 1. This legislation adds, to Louisiana's non-compete statute, La. R. S. 23:921, the explicit provision that an otherwise valid non-compete agreement that restrains an employee from working for a competitor is valid. A June, 2001 Louisiana Supreme Court decision, Swat 24 Shreveport Bossier, Inc. v. Bond, surprised and alarmed Louisiana businesses by holding that non-compete agreements seeking to restrain an employee from working for a competing business (as opposed to starting his own competing business) were null and void. The Swat 24 decision validated only those non-competes prohibiting employees from starting their own competing businesses. Louisiana business organizations, particularly the Louisiana Association of Business and Industry (LABI), alarmed by the ruling and its reverberations, lobbied strongly for the legislature to overrule the SWAT 24 decision. Their work has been rewarded by the passage of HB 1770 33 - 1. Having passed the House and Senate, the Bill is headed to Governor Foster's desk for his signature.