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J & S Res., LLC v. R 4 LLC - 63 So. 3d 393, 10-1524 ( La. App. 3 Cir 05/4/11)

Rule:

The phrase "or provision thereof" in La. Rev. Stat. Ann. § 23:921 refers to a noncompetition provision within a contract that deals with other matters, such as an overall employment agreement. The phrase allows for nullification of the offending noncompetition provision without voiding the entire employment agreement. However, where the entire agreement is concerned with noncompetition, one portion cannot be severed from the remainder absent a specific severability clause.

Facts:

An independent contractor agreement for the provision of labor and equipment services was entered among Plaintiff, J & S Resources LLC, R-4 LLC, and Construction Resource Organization LLC. The agreement contained stipulations that restricted R-4 and CROM from competing with J&S in specified geographic regions. Thereafter, J&S filed suit against R-4, CRO, Walt Durfey, and Dustin Bradford, praying that the defendants be enjoined from competing against J&S in certain named parishes of the State of Louisiana. After a hearing, the trial court denied J & S’s request for an injunction, holding that the entire non-competition agreement was null and void. J&S appealed.

Issue:

Under the circumstances, was the non-competition agreement void?

Answer:

Yes.

Conclusion:

The Court found, inter alia, that the entire agreement was concerned with noncompetition. One portion could not be severed from the remainder absent a specific severability clause. In addition, Louisiana had a long-standing public policy that disfavored noncompetition agreements. Accordingly, the trial court did not err in holding that the entire noncompetition agreement was null and void.

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