SIGNIFICANT
LOUISIANA
EMPLOYMENT-RELATED
CASE LAW AND STATUTES
George D. Fagan
Leake & Andersson, L.L.P.
1700 Energy Center
1100 Poydras Street
New Orleans, Louisiana 70163-1701
Telephone: (504) 585-7500
Fax: (504) 585-7775
E-mail: gfagan@leakeandersson.com
This paper discusses
various Louisiana laws, regulations, and topics affecting employers doing
business in Louisiana:
I. At-Will Employment
II. Exceptions to At-Will Employment
III. Constructive Discharge
IV. Written Employment Agreements and Arbitration Clauses
V. Oral Agreements
VI. Defamation
VII. Emotional Distress Claims
VIII. Privacy Rights
IX. Drug Testing Laws
X. Louisiana's Anti-Discrimination Statutes
XI. Covenants Not to Compete and Trade Secrets
XII. Miscellaneous Louisiana Statutes Regulating Employment Practices
I. At Will Employment
| Louisiana Civil Code article 2747 provides: "A man is at liberty to dismiss a hired servant attached to his person or family, without assigning any reason for doing so. The servant is also free to depart without assigning any cause." "Under Louisiana law, employment is at-will unless it is for a definite term."
Meredith v. Louisiana Federation of Teachers, 209 F.3d 398, 403 (5th Cir. 2000); and, );
Brannan v. Wyeth Laboratories, Inc., 526 So.2d 1101, 1103 (La. 1988). Louisiana Civil Code article 2024 requires that the terminating party provide reasonable notice of the termination of an employment relationship. In Louisiana, employees may generally be fired for any reason, or for no reason, in the absence of an employment contract for a specified period of time or some violation of law. Wallace v. Shreve Memorial Library, 79 F.3d 427, 429 (5th Cir. 1996); Johnson v. Delchamps, Inc., 897 F.2d 808, 810 (5th Cir. 1990); Brannan v. Wyeth Laboratories, Inc., 526 So.2d 1101, 1103-1104 (La. 1988); and, Hughes v. Muckelroy, 700 So. 2d 995, 998-999 (La. App. 1st Cir. 1997). An employer has the right to fire an at will employee for any reason - good, bad or indifferent - or for no reason at all. Johnson v. Delchamps, Inc., 897 F.2d 808, 810 (5th Cir. 1990). Any ambiguity should be construed in favor of employment at will. Wallace v. Shreve Memorial Library, 79 F.3d 427, 429 (5th Cir. 1996); and, Thorne v. Monroe City School Board, 542 So.2d 490, 492 (La. 1989). An at will employee may nonetheless have vested rights to benefits which are not mere gratuities which requires the employer to honor such provisions even when terminating an at will employee. Knecht v. Board of Trustees for State Colleges and Universities, 591 So.2d 690, 695 (La. 1991)(such as accumulated overtime wages, vacation benefits, or sick leave). Beard v. Summit Institute, 707 So.2d 1233 (La. 1998), holds that wages include accrued vacation pay or other similar benefits, which must be paid to an employee who quits or resigns in accordance with La.R.S. 23:631-634 (which statute discussed in more detail in the last section entitled Miscellaneous State Statutes Regulating Employment Practices). In Williams v. Touro Infirmary, 578 So.2d 1006, 1009 (La. App. 4th Cir. 1991), the Court held that an employee's participation in a retirement plan did not transform at will employment into a fixed term of employment. In Chauvin v. Tandy Corporation, 984 F.2d 695, 698 (5th Cir. 1993), the employee was found to be an at will employee even though he signed an agreement not to disclose confidential information, not to compete against his employer, and conveying any intellectual property rights to his employer. A similar result was reached in Brannan v. Wyeth Laboratories, Inc., 526 So.2d 1101, 1102-1104 (La. 1988). A contract which includes a definite initial term with varying options to renew becomes "at will" employment once the initial term expires. Seals v. Calcasieu Parish Council on Aging, 758 So.2d 286, 291 (La. App. 3rd Cir. 2000), writs denied, 761 So.2d 1292 (La. 2000). Absent special considerations, a contract for employment for an indefinite term is deemed to be employment at will. Id.; See Also, Pitcher v. United Oil Gas Syndicate, 174 La. 66, 139 So. 760 (La. 1932). |
II. Exceptions to At Will Employment
| 1. Implied Contracts |
| a. Employee Handbooks/Personnel Materials A policy manual which provides general guidelines and employment procedures should not constitute an implied contract of employment under Louisiana law. Keller v. Sisters of Charity, 597 So. 2d 1113, 1116-1117 (La. App. 2nd Cir. 1992); Mix v. University of New Orleans, 609 So.2d 958, 964 (La. App. 4th Cir. 1992), writs denied, 612 So.2d 83 (La. 1993); Leger v. Tyson Foods, Inc., 670 So.2d 397, 401-402 (La. App. 3rd Cir. 1996), writs denied, 671 So.2d 920 (La. 1996); Wallace v. Shreve Memorial Library, 79 F.3d 427, 430-431 (5th Cir. 1996); Schwarz v. Administrators of Tulane Educational Fund, 669 So.2d 895 (La. App. 4th Cir. 1997); and, Walker v. Air Liquide America Corp., 113 F.Supp.2d 983, 985 (M.D. La. 2000). b. Disclaimers Disclaimers in an employment policy or manual which state that the document does not constitute a contract of employment and does not interfere with an employers right to terminate an employee at will have been upheld in Louisiana. Thebner v. Xerox Corp., 480 So. 2d 454 (La. App. 3rd Cir. 1986), writs denied, 484 So. 2d 139 (La. 1986); Keller v. Sisters of Charity, 597 So. 2d 1113 (La. App. 2nd Cir. 1992); Leger v. Tyson Foods, Inc., 670 So.2d 397, 401-402 (La. App. 3rd Cir. 1996), writs denied, 671 So.2d 920 (La. 1996); Adams v. Autozoners, Inc., 1999 WL 744039 E.D. La. Sept. 23, 1999); and, Walker v. Air Liquide America Corp., 113 F.Supp.2d 983, 985 (M.D. La. 2000). Even policies or manuals without disclaimers have been held not to constitute implied contracts of employment. Wallace v. Shreve Memorial Library, 79 F.3d 427, 431 (5th Cir. 1996)(Louisiana courts are quite reluctant to find that employment manuals create contractual rights); and, Keller v. Sisters of Charity, 597 So. 2d 1113, 1116 (La. App. 2nd Cir. 1992). An at-will employee's expectation that his employer will adhere to a company grievance procedure does not give rise to any legal rights. Mix v. University of New Orleans, 609 So.2d 958, 964 (La. App. 4th Cir. 1992), writs denied, 612 So.2d 83 (La. 1993). Whether an employment manuals creates an implied contract of employment is determined on a case by case basis. Wallace v. Shreve Memorial Library, 79 F.3d 427, 431 (5th Cir. 1996) c. Implied Covenant of Good Faith and Fair Dealing Generally, Louisiana implies a requirement of good faith performance of all contracts. See, Louisiana Civil Code Article 1759. Wiley v. Missouri Pacific Railroad Company, 430 So. 2d 1016 (La. App. 3d Cir. 1982), writ denied, 431 So. 2d 1055 (La. 1983), is evidently Louisiana's only state appellate court decision which addresses the implied contractual duty to perform in good faith. In dicta, that court recognized that a contract terminable at will is nevertheless subject to limitation on the exercise of that will, i.e., that such termination not be arbitrary and capricious. Wiley v. Missouri Pacific Railroad Company, supra at 1020. In Deus v. Allstate Insurance Company, 15 F.3d 506 (5th Cir. 1994), Deus was an insurance sales agent employed under a written contract. Because the contract was for life but was not supported by any extra consideration, the court found the contract invalid and determined that Deus was terminable at will. Deus claimed that Allstate breached an implied obligation of good faith in executing its part of an employment agreement. The court dismissed the claim because Deus failed to produce evidence that any of Allstate's actions were motivated by bad faith. Some courts have considered arguments regarding the application of Louisiana's abuse of rights doctrine to the termination of at-will employees, but so far no reported case has applied the doctrine to allow a discharged at-will employee to file suit for wrongful termination. One of the following must exist for the abuse of rights doctrine to be applied: (1) the exercise of rights exclusively for the predominant purpose of harming another or with the predominant motive to cause harm; (2) the non-existence of a serious and legitimate interest that is worthy of judicial protection; (3) the use of the right in violation of moral rules, good faith or elementary fairness; or (4) the exercise of the right for a purpose other than that for which it was granted. Ballaron v. Equitable Shipyards, Inc., 521 So.2d 481, 483 (La. App. 4th Cir. 1988), writs denied, 522 So.2d 571 (La. 1988); and, Illinois Central Railroad Company v. International Harvester, 368 So.2d 1009, 1014-1015 (La. 1979). Holdings which suggest the imposition of a good faith standard or the application of the abuse of rights doctrine cannot be reconciled and are in conflict with other state and federal Louisiana appellate court decisions which allow termination of at will employees for any reason. Reasons for termination need not be accurate, fair or reasonable. Stevenson v. Lavalco, Inc., 669 So.2d 608, 610 (La. App. 2nd Cir. 1996), writs denied, 673 So.2d 611 (La. 1996). If Delchamps was at liberty to discharge Johnson for no reason, it was equally at liberty to discharge her for a reason based on incorrect information, even if that information was carelessly gathered. Johnson v. Delchamps, Inc., 897 F.2d 808, 811 (5th Cir. 1990) |
| 2. Public Policy Exceptions |
| The Louisiana Supreme Court has never expressly
addressed this issue. Numerous intermediate appellate courts have held that statutory or constitutional protections afford exceptions to the employment-at-will doctrine, but general public policy protections do not. In Gil v. Metal Service Corp., 412 So.2d 706 (La. App. 4th Cir. 1982), writ denied, 414 So. 2d 379 (La. 1982), Gil was employed by Metal Service for ten years in a management-supervisory capacity. Metal Service instituted a practice of removing identification marks from foreign steel and delivering it to their customers who had requested domestic steel. Gil refused to engage in this practice and claimed that he was fired as a result. The trial court issued a judgment for Metal Service and Gil appealed. The Louisiana Court of Appeals held that refusing to commit an illegal act is protected only if supported by a specific constitutional or statutory provision. This narrow interpretation resulted in a finding that Gil was without recourse because no such authority existed. The Court acknowledged decisions of other states recognizing a public policy exception to the at-will doctrine even in the absence of a statute, but declined to follow suit. In Guillory v. St. Landry Parish Police Jury, 802 F.2d 822 (5th Cir. 1986), cert. denied, 482 U.S. 916 (1987), the U.S. Fifth Circuit Court of Appeal refused to adopt for Louisiana any public policy exceptions to the employment-at-will doctrine. The court held that a cause of action for wrongful discharge where there is no valid employment contract will only lie if the discharge violates the Louisiana Constitution, the Federal Constitution, or any state or federal statutes. Id. at 826. An employer's decision to terminate an at will employee based on the results of a polygraph examination, or the employee's refusal to undergo a polygraph examination, do not state a claim for relief under Louisiana law for wrongful termination or an abuse of rights. Johnson v. Delchamps, Inc., 897 F.2d 808, 811 (5th Cir. 1990); and, Ballaron v. Equitable Shipyards, Inc., 521 So.2d 481 (La. App. 4th Cir. 1988), writs denied, 522 So.2d 571 (La. 1988). In Wusthoff v. Bally's Casino Lakeshore Resort, Inc., 709 So.2d 913 (La. App. 4th Cir. 1998), writs denied, 718 So.2d 413 (La. 1998), the plaintiff was an at-will employee working as a valet at a casino. Plaintiff was fired after reporting that he was forced to drive a parked car from the casino at gunpoint, which was the second incident where the plaintiff claimed he was a victim of a crime. The casino fired the plaintiff based on its belief that the plaintiff was at fault for his own "kidnapping." Plaintiff filed suit based on his claim he was wrongfully fired for reporting a safety breach which violated OSHA's requirement that employees be provided with a safe place to work. Finding no basis for asserting an actionable claim based on a violation of any such public policy, the Court of Appeal affirmed the dismissal of plaintiff's claims. |
III. Constructive Discharge
| To establish a claim for constructive discharge, an employee must prove working conditions so difficult or unpleasant that a reasonable person placed in that position would have felt compelled to resign. Bannister v. Department of Streets, 666 So.2d 641, 648 (La. 1996); and, Davis v. Hibernia National Bank, 732 So.2d 61, 65 (La. App. 4th Cir. 1999), writs denied, 747 So.2d 536 (La. 1999). This follows the standard used and applied in federal employment discrimination cases. In Meyer v. Foti, 720 F.Supp. 1234, 1241 (E.D.La. 1989), the Court held that a constructive discharge occurs when an employer makes conditions so intolerable that a reasonable person in the employee's position would have felt compelled to resign. See Also, Kelleher v. Flawn, 761 F.2d 1079, 1086 (5th Cir. 1985). The determining factor is the effect of the conditions on a reasonable employee, not the employer's intentions. Meyer v. Foti, supra at 1241. |
IV. Written Employment Agreements and Arbitration Clauses
| A provision in an employment contract which allows the employee the unilateral right to terminate upon notice to the employer during a fixed term is enforceable even though the employer may only terminate for "just cause."
Seals v. Calcasieu Parish Council on Aging, 758 So.2d 286, 291 (La. App. 3rd Cir. 2000),
writs denied, 761 So.2d 1292 (La. 2000). Contracts for indefinite or permanent terms are not enforceable absent special considerations in addition to the services that the employee has agreed to perform.
Id. "An employee is never presumed to engage his services permanently, thereby cutting himself off from all chances of improving his conditions; indeed, in this land of opportunity, it would be against public policy and the spirit of our institutions that any man should thus handicap himself; and the law will presume almost juris et de jure that he did not so intend."
Pitcher v. United Oil Gas Syndicate, 174 La. 66, 69, 139 So. 760, 761 (La. 1932). 1. Standard For Cause Terminations |
| Louisiana Civil Code article 2749 allows an employer to terminate an employee with a written contract of employment for cause. Louisiana Civil Code article 2024 requires that reasonable notice be provided to an employee who is terminated for cause. The failure to terminate a contract employee for cause allows the employee to recover the amount he would have been paid for the balance of the term of his employment contract.
See, Louisiana Civil Code article 2749. An employee with a written contract who leaves his employment without cause before the end of the contracts term forfeits any right to recover any wages due him and he may be compelled to refund any money he has received.
See, Louisiana Civil Code article 2750. a. Who Has the Burden of Proof |
| The burden of proof in an action for breach of contract is on the party claiming rights under the contract.
Bond v. Allemand, 632 So. 2d 326, 329 (La. App. 1st Cir. 1993),
writs denied, 637 So. 2d 468 (La. 1994). The existence of the contract and its terms must be proven by a preponderance of the evidence.
Id. at 329. |
| b. What Constitutes Cause |
| Where there is an employment contract for a fixed term, an employer can discharge the employee only for serious ground of complaint, or just cause.
Higgins v. Smith International, Inc., 716 F.2d 278, 283-284 (5th Cir. 1983). Whether a cause for termination constitutes a serious ground of complaint is a question of fact.
Id. at 284, citing, Laneuville v. Majestic Industrial Life Insurance
Company., 66 So. 2d 786 (La. 1953). A company's policies, written procedures or employee manual are relevant in determining whether a serious ground of complaint exists. Higgins v. Smith International, Inc., 716 F.2d 278, 284 (5th Cir. 1983). However, Louisiana courts have given some guidance as to what will constitute cause for termination. Huddleston v. Dillard Department Stores, Inc., 638 So. 2d 383, 385 (La. App. 5th Cir. 1994)(holding that a false answer on employment application constituted cause for discharge where the employee handbook gave notice that dishonesty would be grounds for termination); Brannan v. Wyeth Laboratories, Inc., 526 So. 2d 1101, 1104 (La. 1988) (holding that employer had just cause to terminate pharmaceutical salesman who failed to make an adequate number of calls, falsified call reports, and failed to adequately supply employer's products to regular customers); and, Chauvin v. Tandy Corporation, Inc., 984 F.2d 695, 699 (5th Cir. 1993)(failing to promptly deposit company funds in violation of written policy constitutes cause). |
| 2. Status of Arbitration Clauses |
| Louisiana Revised Statutes 9:4201-4217 contains the Louisiana Arbitration Law and Louisiana Revised Statute 9:4201 upholds arbitration agreements save upon such grounds as exist at law or in equity for the revocation of any contract Louisiana law favors an interpretive effort toward upholding arbitration. Where there is doubt, the general rule is that it should be resolved in favor of, not against, arbitration.
Cajun Electric Power Co-Op., Inc. v. Louisiana Power & Light
Co., 324 So. 2d 475, 478 (La. App. 4th Cir. 1975). Arbitration awards are presumed valid because of a strong public policy favoring arbitration in Louisiana. A reviewing court cannot review the merits of an arbitrator's decision; the grounds for judicial inquiry under arbitration law are whether a valid arbitration agreement exists, and whether it has been complied with.
Orleans Parish School Board v. United Teachers of New Orleans, 689 So. 2d 645, 647 (La. App. 4th Cir. 1997). Except for claims by seaman, railroad employees and other transportation workers engaged in interstate or foreign commerce, arbitration clauses included in employment contracts are enforceable with respect to Title VII claims. Circuit City Stores, Inc. v. Adams, 121 S.Ct. 1399 (March 31, 2001); and, Mouton v. Metropolitan Life Insurance Company, 147 F.3d 453, 455-457 (5th Cir. July 31, 1998). Whether claims which the EEOC asserts on behalf of an employee may be subject to an arbitration clause in the charging party's employment contract should be addressed by the United States Supreme Court in EEOC v. Waffle House, Inc., U.S. Sup. Ct. Docket No. 99-1823, cert. Granted, March 26, 2001. In Rogers v. Brown, 986 F.Supp. 354 (M.D.La. 1997), the judge upheld the enforcement of an arbitration clause contained in the employee?s application as to the employee's Title VII claims against the employer; however, the judge refused to compel plaintiff to arbitrate her state law tort claims against the employee defendant who allegedly sexually harassed her. The judge nonetheless stayed all proceedings pending the outcome of the arbitration. This case settled while the ruling was on appeal to the U.S. Fifth Circuit Court of Appeals. In Walker v. Air Liquide America Corp., 113 F.Supp. 983 (M.D. La. 2000), the Court refused to enforce an arbitration clause contained in an Alternate Dispute Resolution provision contained in an employment manual which the employee signed where: the policy stated it was not a contract and did not impair the employee's at-will status; and, the acknowledgment form signed by the employee made no reference to the arbitration requirement. In Jones v. Tenet Health Network, 1997 WL 180384 (E.D. La. April 7, 1997), the Court enforced an arbitration provision in an employment manual where the acknowledgment form signed by the employee specifically referenced and adopted the arbitration clause as a condition of employment. |
V. Oral Agreements
| In Louisiana, verbal contracts are valid unless the law specifically prescribes a requirement of writing.
State of Louisiana v. Louis, 645 So. 2d 1144, 1149 (La. 1994); Meredith v. Louisiana Federation of
Teachers, 209 F.3d 398, 403 (5th Cir. 2000); and, Louisiana Civil Code article 1927. It is well settled that where a written contract is not required to be in writing to be valid, verbal testimony is admissible to show that by a subsequent parol agreement such written contract has been modified, altered or abrogated, but where a verbal agreement is entered into and later a written agreement is entered into on the same subject matter, the verbal agreement becomes merged into the written agreement and cannot be proved by parol if it varies or contradicts the subsequent written agreement .
State ex rel. Tager v. Boagni, 27 So. 2d 921, 924 (La. App. 1st Cir. 1946);
See Also, Omnitech International, Inc. v. Clorox Co., 11 F.3d 1316, 1328 (5th Cir. 1994). Louisiana Civil Code article 2277 requires the testimony of one credible witness and oral corroborating circumstances to prove an oral contract for more than $500. This may be satisfied by the testimony of the employee and the submission of proof, which generally corroborates the oral contract. Higgins v. Smith International, Inc., 716 F.2d 278, 283 (5th Cir. 1983). Whether the evidence corroborates the employee's claim is a finding to be made by the trier of fact. Id.; See Also, Samuels v. Firestone Tire & Rubber Company, 342 So.2d 661, 662 (La. 1977). "The requirement of 'one witness' may be met by the plaintiff's own testimony, and the corroborating evidence may be the fact that the plaintiff left a secure position to work for the new employer." Meredith v. Louisiana Federation of Teachers, 209 F.3d 398, 403 (5th Cir. 2000). 1. Promissory Estoppel (Detrimental Reliance in Louisiana) |
Article 1967 of the Louisiana Civil Code provides a separate cause of action for detrimental
reliance:
The Louisiana Supreme Court has held that Louisiana Civil Code Article 1967 incorporates into the law of Louisiana a new basis for enforcement of obligations.
Morris v. Friedman, 94-2808 (La. 11/27/95), 663 So.2d 19, 23. Article 1967 means that a promise becomes an enforceable obligation when it is made in a manner that induces the other party to rely on it to his detriment.
Carter v. Huber & Heard, Inc., 95-142 (La. App. 3rd Cir. 5/31/95), 657 So.2d 409, 411. |
| 2. Fraud Claims |
| Louisiana Civil Code articles 1953 to 1958 allow contracts procured or entered into through fraud to be rescinded. As applied to contracts, fraud is the cause of an error concerning a material part of the contract, created or continued by artifice and with intent to obtain an unjust advantage or cause a detriment or loss to the other party. To find fraud from silence or suppression of the truth, there must exist a duty to speak or to disclose information Greene v. Gulf Coast Bank, 593 So. 2d 630, 632 (La. 1992). Fraud is the misrepresentation or suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause loss or inconvenience to the other. Fraud must be proved by a preponderance of the evidence and may be established by circumstantial evidence. Ballard's Inc. v. North American Land Development Corp., 677 So. 2d 648, 650-651 (La. App. 2d Cir. 1996). Louisiana Civil Code article 1958 allows the recovery of attorneys fees and all damages allowed by law where a contract is rescinded based on fraud. |
VI. Defamation
| 1. General Rule |
| There are five elements of defamation: defamatory words; publication; falsity; malice, actual or implied; and resulting injury.
Landrum v. Board of Commissioners, 685 So.2d 382, 390 (La. App. 4th Cir. 1996). Words are defamatory which tend to expose a person to contempt, hatred, ridicule, or disgrace, or to injure him in his reputation, occupation, or public standing.
Fourcade v. City of Gretna, 598 So.2d 415, 419 (La. App. 5th Cir. 1992). If the words are not defamatory per se, then the plaintiff must prove such malice, and requires proof that the words or statements were made with reckless disregard for whether or not they are false Id. Publication refers to any non-privileged communication of defamatory words, written or oral, and it renders a defendant liable for all repudiation that is the natural and probable consequence of the author's act.
Id. at 390, citing, Martin v. Lincoln General
Hospital, 588 So.2d 1329 (La. App 2d Cir. 1991), writ denied, 592 So.2d 1302 (La. 1992) Words which impute a crime are defamatory per se.
Williams v. Touro Infirmary, 578 So.2d 1006, 1009 (La. App. 4th Cir. 1991). The communication of a defamatory communication to one person constitutes a publication.
Id.; and, Farria v. LaBonne Terrebonne of Houma, 476 So.2d 474, 475 (La. App. 1st. Cir. 1985). |
| 2. Reference Letters |
| Louisiana Revised Statute 23:291 provides a qualified privilege to employers providing, and potential employers seeking and relying on, accurate information about a former or current employees job performance and reasons for separation. To demonstrate bad faith, it must be shown that the information disclosed was knowingly false and deliberately misleading. This statute applies to verbal and written communications. Prior to the enactment of this statute, Louisiana recognized a qualified privilege in favor of employers providing information about former employers on the basis that an employer should not be unreasonably restricted when furnishing information. Williams v. Touro Infirmary, 578 So.2d 1006, 1010 (La. App. 4th Cir. 1991). |
| 3. Privileges |
| "A person may enjoy a qualified or conditional privilege in making a statement if it is made in good faith, on a subject in which he has an interest or a duty, and to a person having a corresponding interest or duty."
White v. Baker Manor Nursing Home, Inc., 400 So.2d 1168, 1169 (La. App. 1981). Good faith means that the employer honestly believed, and had reasonable grounds for believing, the truth of the communication. Id. at 1170;
See Also, Fourcade v. City of Gretna, 598 So.2d 415 (La. App. 5th Cir. 1992). Some Louisiana appellate courts have required actual malice to be proven,
Saluto v. Gonzales, 646 So.2d 1225, 1227 (La. App. 5th Cir. 1994); however, one appellate circuit allowed a defamation cause of action based upon negligent acts.
Williamson v. Historic Hurtsville Association, 556 So.2d 103 (La. App.4th Cir. 1990). Louisiana Revised Statute 23:291 provides a qualified privilege to employers providing, and potential employers seeking and relying on, accurate information about a former or current employee?s job performance and reasons for separation. To demonstrate bad faith, it must be shown that the information disclosed was knowingly false and deliberately misleading. This statute applies to verbal and written communications. |
| 4. Other Defenses |
| Two defenses to an action for defamation are truth and privilege.
Fourcade v. City of Gretna, 598 So.2d 415, 422 (La. App. 5th Cir. 1992). Defenses to defamation are truth or substantial truth and justification or privilege.
Maggio v. Liztech Jewelry, 912 F.Supp. 216, 220 (E.D. La. 1996). Expressions of pure opinion cannot form the basis for a defamation action because they are neither true or false.
Id. Good faith refers to a statement made in the honest belief that it is a correct statement and reasonable grounds for believing it to be true Id. Article 971 of the Louisiana Code of Civil Procedure was enacted in 1999 and creates a special motion to strike lawsuits based on the exercise of free speech on a public issue unless the Court by preliminary motion determines that the Plaintiff has a probability of success on the merits. This provision may be a "special law" affecting civil actions in a manner prohibited by Article III, Section 12, of the 1974 Louisiana Constitution. Kimball v. Allstate Insurance Company, 712 So.2d 46 (La. 1998). |
| 5. Blacklisting Statutes |
| Louisiana Revised Statutes 23:963 states that no person shall require any of his employees to deal with any person, nor will he exclude from work, punish or blacklist any employees for their failure to deal with another or to purchase items from another place, except for uniforms. Violation of this statute will result in a fine of no less than fifty dollars nor more than one hundred dollars, or imprisonment for no less than thirty days nor more than ninety days. The goal of this statute is to prohibit employers from coercing employees to purchase goods or services from persons or companies designated by the employer. |
VII. Emotional Distress Claims
| 1. Interference with Contractual Relations |
| Louisiana does not recognize a claim for tortious interference with a contract or contractual relations.
Charles v. Faust, 487 So.2d 612, 613 (La. App. 4 Cir. 1986). Louisiana law allows a claim for intentional interference with contractual relations against a corporate officer or director for unjustified actions.
9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La. 1989). Thus, an officer is privileged to induce the corporation to violate a contractual relation, or make its performance more burdensome, provided that the officer does not exceed the scope of his authority or knowingly commit acts that are adverse to the interests of his corporation. Where officers knowingly and intentionally act against the best interest of the corporation or outside of the scope of their authority, they can be held liable by the party whose contract right has been destroyed. Id. at 231. Louisiana courts have refused to expand this narrow application of tortious interference with contractual relations.
Accredited Surety & Casualty Company, Inc. v. McElveen, 631 So.2d 563, 568-569 (La. App. 3rd Cir. 1994),
writs denied, 637 So.2d 483 (La. 1994), and the cases cited therein. |
| 2. Intentional Infliction of Emotional Distress |
| "Although recognizing a cause of action for intentional infliction of emotional distress in a workplace setting, this state's jurisprudence has limited the cause of action to cases which involve a pattern of deliberate, repeated harassment over a period of time."
Nicholas v. Allstate Insurance Company, 765 So.2d 1017, 1026 (La. 2000). "The distress suffered by the employee must be more than a reasonable person could be expected to endure. Moreover, the employer's conduct must be intended or calculated to cause severe emotional distress, not just some lesser degree of fright, humiliation, embarrassment or worry."
Id. at 1027. Nicholas summarizes and comments on several cases addressing whether employment-related conduct is extreme and outrageous and thus actionable.
Id. at 1027-28. Claims for intentional infliction of emotional distress are frequently used as state law adjuncts to federal employment discrimination or harassment claims. Walters v. Rubicon, Inc., 706 So.2d 503 (La. App. 1 Cir. 1997); and, White v. Monsanto, 585 So.2d 1205 (La.1991). In order to recover damages in such a claim, a plaintiff must prove (1) the conduct was extreme and outrageous, (2) the emotional stress of the plaintiff was severe, and (3) the defendant desired to inflict severe emotional distress or knew that severe emotional distress would be certain or substantially certain to result from his conduct. White v. Monsanto Co., supra at 1205. The conduct must be so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and be regarded as atrocious and utterly intolerable in a civilized community. Id. In the employment setting, It workplace conduct amounting to a intentional infliction of emotional distress usually limited to cases involving a pattern of deliberate, repeated harassment over time. Id. at 1210. Therefore, this exempts mere insults, indignities, threats, annoyances, petty oppressions and other trivialities. Id. at 1209; See Also, Bustamento v. Tucker, 607 So.2d 532, 539-540 (La. 1992)(systematic sexual harassment at the workplace gives rise to a claim for intentional infliction of emotional distress). In Stevenson v. Lavalco, Inc., 669 So.2d 608, 611 (La. App. 2nd Cir. 1996), writs denied, 673 So.2d 611 (La. 1996), the Court held that a terminated at employee has no claim for intentional infliction of emotional distress as a result of his termination. In Smith v. Ouachita Parish School Board, 702 So.2d 727 (La. App. 2nd Cir. 1997), writs denied, 706 So.2d 978 (La. 1998), the Court held that the wrongful demotion and transfer of a teacher did not constitute extreme and outrageous conduct even though it may have caused emotional and psychological distress. In Davis v. Hibernia National Bank, 732 So.2d 61, 65 (La. App. 4th Cir. 1999), writs denied, 747 So.2d 536 (La. 1999), the Court held that an employee's claims that she treated differently from other employees regarding breaks, working hours, working conditions, salaries and promotions did not give rise to a claim for intentional infliction of emotional distress. Systematic and continuous sexual harassment of an employee may constitute a continuous tort and suspend the running of Louisiana's one year statute of limitations for tort actions for so long as the conduct is ongoing. Bustamento v. Tucker, 607 So.2d 532, 542 (La. 1992); and, Brown v. Vaughn, 589 So.2d 63 (La. App. 1st Cir. 1991). Prescription begins to run on the date the conduct abated. Bustamento v. Tucker, 607 So.2d 532, 542 (La. 1992). |
VIII. Privacy Rights
Article 1, Section 5 of the Louisiana Constitution is entitled Right to Privacy and states:
Damages to an individual for injuries or loss caused by a violation of Article 1, Section 5, of the Louisiana Constitution are recoverable. In the area of invasion of privacy by unreasonable searches and seizures, Louisiana courts have interpreted the right of privacy to afford a broader and even more stringent protection of individual liberty than the Fourth Amendment of the United States Constitution.
Varnado v. Department of Employment and Training, 687 So.2d 1013 (La. App. 1 Cir. 1996). |
IX. Drug Testing Laws
| Louisiana Revised Statutes 49:1011 is entitled Employee Drug Testing; Rights of the Employee and states: |
| A. Any employee, confirmed positive, upon his written request, shall have the right of access within seven working days to records relating to his drug tests and any records relating to the results of any relevant certification, review, or suspension/revocation-of-certification proceedings. B. An employer may, but shall not be required to, afford an employee whose drug test is certified positive by the medical review officer the opportunity to undergo rehabilitation without termination of employment. |
| Louisiana Revised Statutes 49:1012 is entitled Employee Drug Testing; Responsibility of the Employer and states that all information received by an employer in connection with its drug testing program is confidential and cannot be released for any reason unless to be used in an administrative or disciplinary proceeding or civil litigation where drug use by the tested individual is relevant. Further, under Louisiana Revised Statutes 49:1012, an individual does not have a cause of action for defamation, libel, slander or damage to reputation or privacy against an employer or testing entity whose testing policy/procedure is in accordance with this statute unless (1) the results of the test were disclosed an unauthorized party, (2) the information released was based on a false test result or failure to comply with this chapter, (3) all elements of the aforementioned action, as established by statute or civil law, are satisfied. |
X. Louisiana's Anti-Discrimination Statutes
| 1. Employers Covered |
| The 1997 Louisiana Legislature amended and expanded the state's anti-discrimination and harassment laws in Act No. 1123, which became effective on August 1, 1997.
See, La.R.S. 23:301-354. Unless specifically stated otherwise, all employers were required to abide by the anti-discrimination and employment practices and policies established by the cited provisions of the Louisiana Revised Statutes, regardless of size. The statutes also apply to labor organizations and employment agencies. In 1999, the Louisiana Legislature enacted Act No. 1366, which changed and narrowed the definition of an employer and made other changes. Act No. 1366 became effective on August 15, 1999. La.R.S. 23:302(4) was added to define an employer as any natural, juridical or governmental person or entity which employs more than 20 persons for each working date in each of 20 or more calendar days in the current or preceding calendar year, and employer also includes an insurer with respect to the appointment of agents. The term employer does not include: employment of an individual by a parent, spouse or child; domestic service employment; private educational or religious institutions; or, schools, colleges or universities with religious curriculum or owned or controlled by religious bodies or entities. |
| 2. Types of Conduct Prohibited |
| Louisiana Revised Statutes 23:312 prohibits age discrimination against employees aged 40 to 70 years old for employers with 20 or more employees. Louisiana Revised Statutes 22:323 prohibits disability discrimination by employers with 20 or more employees (15 employees under prior law). Louisiana Revised Statutes 23:332 prohibits discrimination based on race, color, religion, sex and national origin by employers with 20 or more employees (15 employees under prior law). Louisiana Revised Statutes 23:342 prohibits discrimination based on pregnancy, childbirth, and related medical conditions for employers with 25 or more employees. La.R.S. 23:342(2)(b) requires an employer to grant a pregnant employee a reasonable period of leave up to four months due to the employee's disability based on her pregnancy, childbirth or related medical problems; however, La.R.S. 23:341(B)(1) states that no employer shall be required to grant more than 6 weeks of leave on account of normal pregnancy, childbirth or related medical problems. Upon the advice of her physician, an employer may be required to temporarily transfer a pregnant employee to a less strenuous or less hazardous position where such transfer can be reasonably accommodated. Act No. 215 of the 1999 Louisiana Legislature became effective on August 15, 1999, and created a cause of action for pregnancy discrimination. Louisiana Revised Statutes 23:352 prohibits discrimination based on a person having Sickle Cell trait for employers with 20 or more employees. Louisiana Revised Statutes 23:822-824 and 23:883 contain Louisiana's right to work statutes. Louisiana Revised Statutes 23:961 & 962 prohibit discrimination against, or efforts to direct or influence, or termination of, employees based on political activities or voting. Louisiana Revised Statutes 23:964 prohibits discrimination or retaliation against employees for testifying at labor investigations or proceedings. Louisiana Revised Statutes 23:965 bars terminating an employee without cause for jury duty and requires one day of paid absence for jury duty. Louisiana Revised Statutes 23:966 governs discrimination based on smoking or tobacco use, or non-use, so long as the person complies with the employer's smoking and tobacco use policy. Louisiana Revised Statutes 23:967 bars an employer from taking reprisals against an employee who in good faith discloses or threatens to disclose illegal work-related practices, provides information or testimony before a public body investigating any such illegal activities, or objects or refuses to participate in an illegal act. An employee against who retaliatory action is taken may recover damages and attorney's fees; however, if the employer prevails, the employer may recover attorney's fees against the employee. Louisiana Revised Statute 23:981 prohibits requiring union or labor organization membership as a condition of employment. Louisiana Revised Statutes 23:1361 bars an employer from refusing to employ a person or terminating an employee based on any workers' compensation claim made by any such person, and allows recovery up to one years' wages and attorney's fees for any violation by an employer. Louisiana Revised Statutes 23:1691 bars discrimination or retaliation against persons who made claims for unemployment compensation benefits. Louisiana Revised Statutes 29:38 requires employers to re-hire honorably discharged National Guard veterans without any loss of seniority for veterans who report to their place of employment within 72 hours of their release from duty. The section mandates for cause only discharges for one year after re-hire. Louisiana Revised Statutes 29:38.3 allows the recovery of attorney's fees and damages for proceedings filed to enforce the provisions of this section. Louisiana Revised Statutes 29:38.1 prohibits employment discrimination based on an applicant or employee's status as a member of any reserve unit of the U.S. Armed Forces or Louisiana National Guard. Louisiana Revised Statutes 29:38.3 allows the recovery of attorney's fees and damages for proceedings filed to enforce the provisions of this section. Louisiana Revised Statutes 30:2027 bars employment discrimination or retaliation against an employee who in good faith reports or threatens to disclose any violation of environmental laws or regulations, and allows any person disciplined or terminated in retaliation for such actions to recover triple damages and attorney's fees. Louisiana Revised Statutes 40:1299.31 bars employment discrimination based on a person's unwillingness to recommend, counsel, perform, assist with or accommodate an abortion. Louisiana Revised Statutes 40:1300.21 through 40:1300.27 requires employers with 25 or more employees to establish a written smoking policy, which provides for a reasonable accommodation for complaints made by non-smokers. Louisiana Revised Statutes 46:236.3(J) & (K) bar an employer's termination of, or taking retaliatory action against, an employee based on a support order issued by the Louisiana Department of Health & Human Resources. Louisiana Revised Statutes 46:2251 through 46:2256 prohibits discrimination on the basis of a handicap for housing, education, real estate transactions, and provides for handicapped persons' full utilization of and equal access to public services and accommodations |
| 3. Administrative Requirements |
| Louisiana Revised Statutes 51:2231 through 51:2265 established the Louisiana Commission of Human Rights and outlines various prohibitions against discrimination and sets forth procedures for filing complaints and conducting investigations regarding discriminatory practices. The statutes allow an aggrieved individual to seek injunctive relief and seek damages and attorney's fees for any violation of the practices and policies set forth in the statutes. See, La.R.S. 51:2257-2265. Notwithstanding the administrative procedures outlines for the Louisiana Commission of Human Rights, Louisiana Revised Statutes 23:313, 23:325, 23:333 and 23:353 all state that a plaintiff who has a cause of action against an employer, employment agency, labor organization or insurer for a violation may file suit in the district court for the parish in which the violation occurred. Interpreting the former statute governing employment discrimination, two courts have held that an employee claiming employment discrimination was not required to file a complaint with the Louisiana Commission on Human Rights as a prerequisite to filing a civil suit. Salard v. Lowe's Home Centers, Inc., 904 F.Supp. 569 (W.D. La. 1995); Coutcher v. Louisiana Lottery Corporation, 710 So.2d 259 (La. App. 1st Cir. 1997), writs denied, 709 So.2d 758 (La. 1997); and, Harper v. Hospital Service District No. 1 of Tangipahoa Parish, 1998 WL 470503, *2 (E.D. La. Aug. 11, 1998). La.R.S. 23:303(C) requires the Plaintiff to provide the employer with a detailed written notice describing the discrimination at least 30 days prior to filing any lawsuit and requires both parties to make a good faith effort to resolve the dispute prior to initiating court action. |
| 4. Remedies Available |
| The 1997 Louisiana Legislature enacted Louisiana Revised Statutes 23:313, 23:325, 333 and 353 to set up the rights and procedures for a plaintiff to assert claims for discrimination or harassment and to recover compensatory damages, back pay benefits, reinstatement, reasonable attorney fees and court costs. Act Nos. 215 and 1366 of the 1999 Louisiana Legislature became effective on August 15, 1999. Act No. 1366 repealed Louisiana Revised Statutes 23:313, 23:325, 333 and 353, and replaced those statutes with a single statute, La.R.S. 23:303, which governs claims for discrimination or harassment based on age, disability, race, color, religion, sex, national origin, and sickle cell trait. Act No. 215 created La.R.S. 23:343, which created a cause of action for pregnancy discrimination. La.R.S. 23:303(A) and La.R.S. 23:343 require the claimant to file suit in the parish [county] where the alleged violation occurred and allows the recovery of compensatory damages, back pay benefits, reinstatement, reasonable attorney fees and court costs. La.R.S. 23:303(B) allows the Court to award reasonable damages and reasonable attorney's fees and court costs if the plaintiff is found by a court to have brought a frivolous claim. La.R.S. 23:303(C) requires the Plaintiff to provide the employer with a detailed written notice describing the discrimination at least 30 days prior to filing suit and requires both parties to make a good faith effort to resolve the dispute prior to initiating court action. La.R.S. 23:303(D) codified several holdings by Louisiana courts that such state law suits for discrimination or harassment prohibited by La.R.S. 23:301-354 (age, disability, race, color, religion, sex, national origin, pregnancy and sickle cell trait) are subject to a prescriptive period of one year. Prior decisions held that suit must be filed within one year of the date of discharge, or the last date on which the Plaintiff was discriminated against. Winbush v. Normal Life of Louisiana, Inc., 599 So.2d 489, 491 (La. App. 3rd Cir. 1992); and, Davis v. Hibernia National Bank, 732 So.2d 61, 63-65 (La. App. 4th Cir. 1999), writs denied, 747 So.2d 536 (La. 1999). This probably remains good law. La.R.S. 23:303(D) suspends this one year prescriptive period for up to six months during the pendency of any administrative review or investigation conducted by the federal Equal Employment Opportunity Commission or the Louisiana Commission on Human Rights. The prior and now repealed laws allowed the suspension to last up to eighteen months for discrimination or harassment claims based on race, color, religion, sex or national origin; there was no provision for suspension of prescription for discrimination or harassment claims based on age, disability, pregnancy or sickle cell trait. See, La.R.S. 23:313, 23:325, 23:333(C) and 23:353, repealed since August 15, 1999. Louisiana courts have held that the state discrimination laws do not require the exhaustion of administrative remedies before filing suit. Coutcher v. Louisiana Lottery Corporation, 710 So.2d 259 (La. App. 1st Cir. 1997), writs denied, 709 So.2d 758 (La. 1998). Thus, in some instances, the prescriptive period for pursuing state law claims which are the same as claims under 42 USC 1981 and Title VII may be subject to a longer prescriptive period than the 90 day period included in right to sue notices issued by the EEOC and allowed under federal law. Courts have generally held that Title VII does not preempt state laws on the same subject. See, Rains v, Criterion Systems, Inc. 80 F.3d 339 (9th Cir. 1996). Rather, any conflicting laws, such as the Title VII damages cap, can only be asserted as defenses to the state law claims. Id. States may thus evidently enact laws allowing additional periods for filing essentially federal-based claims and use copycat state law claims to avoid the stricter prescriptive periods imposed under federal law. Louisiana's copycat state law remedies for employment discrimination and harassment pose problems for the removal of cases where the well-pleaded complaint is based strictly on state law claims. Even where the charging party initially filed a notice of charge with the EEOC or mentions a federal law, removal to federal court will be precluded if the petition or complaint is founded solely on state law. See, Stephens v. Cowles Media Company, 995 F.Supp 974 (D.Minn. 1998); Butts v. Guardian Industries Corp., 981 F.Supp. 1062, 1064-65 (N.D.Oh. 1997); and, Green v. Deposit Guaranty National Bank, 966 F.Supp. 464, 468 (S.D. Miss. 1997); But See, Vicks v. United Food and Commercial Workers International Union, 1997 WL 598473 (E.D. La. 1997)(removal allowed where plaintiff's second state court lawsuit was based only on state law but involved the same operative facts as the plaintiff's first lawsuit which asserted claims based on Title VII); and, Jairath v. Dyer, 961 F.Supp. 277, 280 (N.D.Ga. 1996)(removal allowed if state law recovery is conditioned on violation of federal law). |
XI. Restrictive Covenants Non-Competition Provisions
| 1. General Rule |
| Louisiana Revised Statute 23:921(A) nullifies and voids every contract or agreement which restrains anyone from exercising a lawful, profession, trade, or business of any kind except as provided by the other provisions of Louisiana Revised Statute 23:921. In Louisiana Smoked Products, Inc. v. Savoie's Smoked Sausage, Inc., 696 So.2d 1373 (La. 1997), the Louisiana Supreme Court clarified that the statute does not apply to arms-length contracts between corporations of equal standing where the business relationship is not essentially employer-employee. This is consistent with the purpose of the statute, which is applicable to essentially employment relationships. The 1999 Louisiana Legislature amended La.R.S. 23:921(A) by Act No. 58 and added a provision which precludes the enforcement of choice of law provisions in contracts of employment or collective bargaining agreements unless the choice of law forum clause and, or choices of law clause is expressly, knowingly and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action. An employee may invalidate a choice of law or choice of forum clause by refusing to ratify or agree to same after the occurrence of the prohibited conduct. The federalism interests under the Due Process and Equal Protection clauses of the Fourteenth Amendment to the United States Constitution and their counterparts in the Louisiana Constitution (Sections 2 and 3 of Article I of the Louisiana Constitution) may affect the enforcement of such choice of law provisions where the employee is involved in interstate commerce as part of his or her job duties, as opposed to strictly intra-state commerce. Likewise, the Contracts Clause found in Article 1, Section 10 of the United States Constitution, also applies and states "No state shall. . . pass any. . . law impairing the Obligation of Contracts." The Louisiana counterpart is Section 23 of Article I of the Louisiana Constitution. The Commerce Clause in Article 1, Section 8, of the U.S. Constitution, gives Congress the power "to regulate Commerce . . . among the several States." La.R.S. 23:921(A) may also be a prohibited "special law" affecting "civil actions" or "regulating labor" under Section 12(3) and (6), of the 1974 Louisiana Constitution. The choice of law provisions derogate from Louisiana's general rules on choice of law on contracts, which generally allow contracting parties to validly designate choice of law provisions absent a violation of public policy. See, Articles 14, 3515 & 3537-3541 of the Louisiana Civil Code. Louisiana Revised Statute 23:921(B) through (E) allow corporations, shareholders of corporations, persons employed as an agent, servant or employee, independent contractors, partners of a dissolved partnership and franchisees to be subject to contracts which prohibit competition against the former employer, partnership and franchisor. Such contracts may also prohibit the solicitation of customers in a similar business of the employer or franchisor, but not with respect to partners of a dissolved partnership. Louisiana Revised Statute 23:921(F) provides that a computer programmer may be subject to a non-competition clause regarding confidential computer programs owned, licensed or marketed by a former employer. Such non-competition or non-solicitation clauses are limited to two years in duration from the date of termination and must include and itemize the parishes or counties, municipalities, or parts thereof, in order to be valid. Louisiana Revised Statute 23:921(G) allows the recovery of damages for breach of any such clause, and permits the employer to obtain injunctive relief without the necessity of proving irreparable harm. Conditioning continued employment upon the signing of a non-competition agreement is not duress. Litigation Reprographics v. Scott, 599 So.2d 922 (La. App. 4th Cir. 1992). Non-competition agreements are strictly construed in favor of the employee. Summit Institute for Pulmonary Medicine & Rehabilitation, Inc. v. Prouty, 691 So.2d 1384, 1389 (La. App. 2nd Cir. 1997), writs denied, 701 So.2d 983 (La. 1997); LaFourche Speech & Language Services, Inc. v. Juckett, 652 So.2d 679, 680 (La. App. 1st Cir. 1995), writs denied, 654 So.2d 351 (La. 1995). On June 29, 2001, by a 4-3 majority, the Louisiana Supreme Court resolved a split among the intermediate Courts of Appeal regarding the interpretation of La.R.S. 23:921(A) & (C), which most directly concern employer-employee relationships. Swat 24 Shreveport Bossier, Inc. v. Bond, ___ So.2d ____, 2001 WL 754754 (La. 2001). Adopting the rationale of Summit Institute for Pulmonary Medicine & Rehabilitation, Inc. v. Prouty, 691 So.2d 1384, 1389 (La. App. 2nd Cir. 1997), writs denied, 701 So.2d 983 (La. 1997), the Louisiana Supreme Court held that a non-competition clause which restricts a former employee from engaging in his former occupation is null and void and cannot be enforced unless: (1) the former employee opens his own business in competition with his former employer; or, (2) the former employee accepts employment with a new employer and solicits customers and thus actually competes with the former employer. Swat 24 Shreveport Bossier, Inc. v. Bond, supra. The Court noted that "it is simply not reasonable to prevent an employee from accepting employment with a pre-existing competitor when the employee's new position involves no solicitation of the former employer's customers." Id. "Such results would curtail employees' ability to earn a living and offend the basic premise of Louisiana's doctrine of employment at will." Id. Swat 24 Shreveport Bossier, Inc. v. Bond implicitly overrules Scariano Brothers, Inc. v. Sullivan, 719 So.2d 131 (La. App. 4th Cir. 1998) and Moreno & Associates v. Black, 741 So.2d 91 (La. App. 3rd Cir. 1999), which upheld non-competition clauses where the former employee worked in a similar position or field for a new employer but did not solicit or compete with the former employer. Some Courts have required non-competition clauses to specifically define the business of the employer and the duties of the employee in order to be enforceable. Daiguiri's III on Bourbon, Ltd. v. Wandfluh, 608 So.2d 222, 224 (La. App. 5th Cir. 1992), writs denied, 610 So.2d 801 (La. 1993); LaFourche Speech & Language Services, Inc. v. Juckett, 652 So.2d 679, 680 (La. App. 1st Cir. 1995), writs denied, 654 So.2d 351 (La. 1995). Other cases have held that where the agreement tracks the statutory language (i.e., that the employee refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer...) that there is no need to describe the employer's business because the statute requires no other description of the business. Cellular One, Inc. v. Boyd, 653 So.2d 30, 33 (La. App. 1st Cir. 1995), writs denied, 660 So.2d 449 (La. 1995); and, Henderson Implement Company, Inc. v. Langley, 707 So.2d 482, 486 (La. App. 3rd Cir. 1998). Louisiana courts formerly nullified any non-competition clause where the geographical description which did not define the parish(es), municipality(ies) or parts thereof where the clause was effective. Medivision, Inc. v. Germer, 617 So.2d 69, 72 (La. App. 4th Cir. 1993), writs denied, 619 So.2d 549 (La. 1993)(using within 10 miles of any of the employer's locations held invalid). In ANCOM of Louisiana, Inc. v. Battson, 670 So.2d 1223 (La. 1996), the Louisiana Supreme Court signaled that such an interpretation was unduly restrictive and upheld a restriction encompassing a 75 mile radius of a particular city. In Dixie Parking Service, Inc. v. Hargrove, 691 So.2d 1316, 1320 (La. App. 4th Cir. 1997), the Court found a geographical listing of parishes which included areas where the employer did no business was overly broad, but reformed the contract under ANCOM of Louisiana, Inc. v. Battson, supra, and limited the effect of the clause to those parishes where the employer did business. To draft an enforceable non-competition clause under Louisiana law, the recommended method is to specify and describe the business of the employer, the position and duties of the employee, and the type of work and duties which the employee which be prohibited from performing in any subsequent job. The clause should state that it applies to instances where the former employee starts a competing business on his own or with others, or where the former employee works for a competitor of the former employer and seeks to solicit the former employer's customers or employees. Louisiana courts will strike and refuse to enforce overbroad restrictions. Summit Institute for Pulmonary Medicine & Rehabilitation, Inc. v. Prouty, 691 So.2d 1384, 1389 (La. App. 2nd Cir. 1997), writs denied, 701 So.2d 983 (La. 1997); Daiguiri's III on Bourbon, Ltd. v. Wandfluh, 608 So.2d 222, 224 (La. App. 5th Cir. 1992), writs denied, 610 So.2d 801 (La. 1993). A severability clause should also be included which states that: it is was the parties' intention to enter into a non-competition clause, which conforms with Louisiana law, including La.R.S. 23:921; it is the parties' mutual belief that the non-competition clause conforms with Louisiana law; any terms of the non-competition clause which are determined to violate Louisiana law shall be severed, and the other terms and conditions shall remain in full force and effect;; and, the contract shall be reformed by the mutual agreement of the parties, whose consent shall not be unreasonably withheld, or by a Court of competent jurisdiction, in accordance with the mutual intent of the parties and their reasonable expectations in order to define the scope of the business of the employer, or describe the conduct which is the subject of the non-competition clause, or state the geographical limitations of the clause, or state the term of the effective dates during which the non-competition clause is in effect, or to provide other details or provisions, in order to comply with Louisiana law. |
| 2. Trade Secrets Statute (Uniform Trade Secrets Act) |
| Louisiana Revised Statutes 51:1431,
et seq. is the Louisiana Trade Secrets Act. A trade secret is defined as information that derives independent economic value from not being known nor being readily accessible or ascertainable by parties who may obtain economic value from its disclosure and is the subject of reasonable efforts to maintain its secrecy. Louisiana Revised Statutes 51:1432 allows injunctions to issue for misappropriation of trade secrets, but only so long as the secret continues to exist or until such time that it is determined that no further commercial advantage can be derived from the misappropriation. Injunctive relief may also condition future use of misappropriated information upon payment of royalties. Louisiana Revised Statutes 51:1433 provides that in addition to injunctive relief, a complainant may recover damages for actual loss caused by misappropriation. A complainant may also recover for unjust enrichment. Louisiana Revised Statutes 51:1435 provides that to protect trade secrets, a court may grant protective orders in relation to discovery, hold in camera hearings, seal the records of the action, order any person involved in the litigation to not divulge trade secrets without court approval. Louisiana Revised Statutes 51:1436 provides that an action for misappropriation must be brought within three years from the time the misappropriation is discovered. To establish a claim for misappropriation of a trade secret, the following must be proven: (1) a legally protestable trade secret, (2) an express or implied contractual agreement exist prohibiting the party receiving information from disclosing same, and (3) the party receiving information breached its duty by disclosure or injury to plaintiff. Pontchartrain Medical Labs, Inc. v. Roche Biomedical Laboratories, 677 So.2d 1086 |
XII. Miscellaneous State Statutes Regulating Employment Practices
| Louisiana Revised Statutes 23:151 to 23:258 contain Louisiana's child labor laws. Louisiana Revised Statutes 23:291: discusses requirements for communication of employee job performance. See, Section F(2), supra. Louisiana Revised Statutes 23:631-634 governs an employer's duties to pay accrued wages and benefits to an employee who resigns or quits and imposes substantial penalties for non-compliance. Wages include accrued vacation pay or other similar benefits and written or other policies requiring the forfeiture of such accrued rights are not enforceable. Beard v. Summit Institute, 707 So.2d 1233 (La. 1998). Fired employees must be paid any amount due within three days after the date of discharge. La.R.S. 23:631(A)(1)(a). Employees who quit or resign must be paid all amounts due on the next regular pay day, or within 15 days, whichever occurs first. La.R.S. 23:631(A)(1)(b). The employee can be paid at the place of employment if that is the way employees are usually paid, or payment can be sent by mail. La.R.S. 23:631(A)(2). Mail payments are deemed made when the postage prepaid and correctly addressed letter with the check is sent. Id. If there is a dispute, PCS must pay the employee the undisputed amount as set forth above. La.R.S. 23:631(B). There are substantial penalties imposed by La.R.S. 23:632 for an employer's failure to pay the amount due within the time provided which arise once the employee makes demand for the amount due. The employer is liable to the employee for the lesser of 90 days wages at the employee?s daily rate of pay, or full wages from the time that the employee first demanded payment until the unpaid wages are tendered. Attorney's fees may be awarded if the employee files suit to recover the amounts due. Beard v. Summit Institute, supra, holds that an employer's ignorance of the law is not a good faith defense to the employee's right to recover penalties and attorney's fees. Louisiana Revised Statutes 23:731(c) disallows an employer terminating an employee based on a voluntary wage assignment or a single garnishment of wages. An employer may discharge an employee whose wages are subject to three or more garnishments over a two year period. Louisiana Revised Statutes 23:992 prohibits the hiring of illegal aliens. Louisiana Revised Statutes 23:1001 through 23:1415 contain Louisiana's Workers' Compensation Laws. Louisiana Revised Statutes 23:1471 through 23:1750 contains Louisiana Employment Security Law. Louisiana Revised Statutes 49:1001 permits employee drug testing, but outlines employer responsibilities in terms of termination, test result disclosure, etc. |