In what should serve as a cautionary tale to employers with noncompete agreements, a federal court in the Eastern District of Louisiana allowed an unfair trade practices claim to survive against an employer that attempted to enforce an allegedly invalid noncompete agreement.
In Boudreaux v. OS Restaurant Services, LLC, 2014-1169 (E.D. La. January 23, 2015), the plaintiff, a former employee of a steakhouse chain, sued the chain for violations of the Louisiana Unfair Trade Practices Act. The plaintiff alleged that his former employer knew that the noncompete agreement was invalid and unenforceable and yet continued its effort to enforce it. The district court denied the employer’s motion to dismiss, holding that the employee had stated a plausible claim that the employer had engaged in an unfair trade practice.
This decision should serve as a warning to employers that seek to enforce noncompete agreements that are invalid under Louisiana law; doing so might subject the employer to liability for unfair trade practices.