Defining business in Louisiana noncompetition agreements is essential

A Louisiana appeals court in New Orleans recently overturned a trial court's refusal to enforce a noncompetition agreement through an injunction. The appellate court's decision instructs employers on the need to define the scope of their businesses to have an enforceable noncompetition agreement.

The dispute

Environmental Safety & Health Consulting Services, Inc. (ESH) performs oil and hazardous materials spill containment and cleaning services throughout Louisiana. In April 2019, two employees who had signed noncompetition agreements ended their employment with ESH, and both began working for Clean Harbors, ESH's competitor.

Around the same time, ESH learned it lost a contract to Clean Harbors, and it believed its two former employees had a hand in the work moving to its competitor. In late April 2019, ESH filed suit and sought an injunction to enforce the terms of the employees' noncompetition agreements.

Trial court denies injunction, but appeals court thinks otherwise

The trial court denied the requested injunction. It acknowledged the evidence established that the noncompetition agreements were enforceable but determined ESH hadn't proven it suffered irreparable harm (notwithstanding the fact Louisiana law doesn't require proof of irreparable harm to obtain an injunction to enforce a noncompetition agreement).