Cellular One, Inc v. Boyd - 94-1783 ( La. App. 1 Cir 03/03/95), 653 So. 2d 30

Rule:

To be valid, a noncompetition agreement may limit competition only in a business similar to that of the employer, in a specified geographic area and for up to two years from termination of employment. Public policy requires that the provisions of noncompetition agreements be strictly construed in favor of the employee. Noncompetition agreements which fail to specify the parish or parishes, municipality or municipalities, or parts thereof wherein the employer carried on a similar business are unenforceable. Contracts seeking to extend noncompetition agreements beyond the two year statutory limit are null and void.

Facts:

Defendants John Boyd and Hamilton Lemoine were employed as sales representatives for Cellular One from 1989 to 1993. During the course of their employment, they signed several noncompetition and nondisclosure agreements. When Boyd and Lemoine left the employment of Cellular One in December of 1993, they had executed identical noncompetition agreements which became effective on September 1, 1993. Upon leaving Cellular One both defendants went to work for Affordable Cellular, an authorized agent of Bell South Mobility. Cellular One filed the present suit for injunctive relief asserting that Boyd and Lemoine were in violation of the noncompetition agreement. Cellular One sought to prevent the defendants from competing against it in the cellular telephone business and from soliciting the business of Cellular One's customers. The suit also sought protection against disclosure of confidential information. The trial court granted the injunction and enjoined them from engaging in the radio telephone service business in certain parishes and further enjoined them from directly soliciting any of Cellular One’s customers. On appeal, the defendants argued, inter alia, that the trial court erred in enforcing a noncompetition clause in an employment at will agreement because the agreement lacked mutuality of obligation and the agreement failed to provide sufficient consideration for former employees.

Issue:

Under the circumstances, was the noncompetition clause in the employment at will agreement between the parties unenforceable? 

Answer:

No.

Conclusion:

The court affirmed the judgment of the trial court, holding that the noncompetition agreement was a valid agreement since it limited competition only in a business similar to that of former employer, in a specified geographic area and for up to two years from termination of employment. Moreover, the court held that there was nothing which may point to the fact that the agreement was unenforceable for lack of cause. The defendants signed the agreements as a condition of continued employment. Employment was the valid cause of the contract.