Louisiana’s amended non-competition statute (La. R.S. 23:921), which meaningfully expands the application of employment-related non-compete restrictions within the state, went into effect on August 1, 2020.  This amendment expressly expands the reach of Louisiana non-compete law by, among other things, adding corporate shareholders, partners in partnerships, and members of limited liability companies, to the category of individuals who may be subject to employment non-competition obligations.  This expansion of the law stands in stark contrast to the approach recently taken by many state legislatures across the country (e.g., Washington, Massachusetts, and Maryland), which have sought to narrow the categories of individuals (e.g., by age, wage, or FLSA classification) who may be subject to non-competes.

As now amended, La. R.S. 23:921 specifically identifies individual “shareholders of [a] corporation,” “partners of [a] partnership,” and “members of [a] limited liability company” as individuals who may also be subject to a non-compete agreement restricting them from “becom[ing] employed by” a competitive company.  This amendment closes what could have been utilized as a technical loophole in non-compete enforcement, as previously a preexisting employment relationship was required in order to maintain a non-compete restriction.

Notably, the amendments to La. R.S. 23:921 do not change the general enforceability conditions for a non-compete agreement in Louisiana.  Specifically, the non-compete obligation is still limited to application: (1) within a specified parish or parishes, municipality or municipalities, or parts thereof, (2) so long as the employer carries on a like business therein, and (3) may not exceed a period of two years.

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Photo of Nicole Eichberger Nicole Eichberger

Nicole A. Eichberger is a partner in the Labor and Employment Law Department and head of the New Orleans office. She is a member of the Class & Collective Actions and Wage and Hour Groups. Nici is an experienced trial lawyer and represents…

Nicole A. Eichberger is a partner in the Labor and Employment Law Department and head of the New Orleans office. She is a member of the Class & Collective Actions and Wage and Hour Groups. Nici is an experienced trial lawyer and represents clients in all types of employment-related matters, from single-plaintiff and complex employment to large, complex class and collective actions alleging discrimination, non-compete violations, and wage and hour disputes.

Nici has significant experience assisting clients in the defense of numerous class and collective actions. She frequently counsels employers, fiduciaries, and trustees on employment, wage and hour and benefit issues.

In addition to her litigation practice, Nici assists in conducting workplace investigations and audits related to discrimination, managerial training, non-competes and employee classification. She is adept to counseling clients on a wide array of issues including reviewing and drafting employee handbooks, wage and hour issues, employee leave and training policies.

She is a member of the Firm’s eDiscovery Group and advises clients on eDiscovery matters, including day-to-day preservation, investigations and litigation strategies.

Nici recently completed a three-year term was on the ABA’s Standing Committee on Pro Bono & Public Service and serves as the Pro Bono Co-Coordinator for Proskauer’s New Orleans office. She is a prolific writer, frequently contributing to Proskauer’s Law and the Workplace Blog and a sought-after speaker on collective/class action topics.