2020 Change to Louisiana's Non-Compete Law--Have Your Agreements Re-Executed After August 1, 2020, or Be Sorry Later
The 2020 Louisiana Legislature amended La. R.S. 23:921, the single statute in Louisiana governing the validity and enforceability of non-compete agreements. The amendment directly affects agreements between partnerships and partners, corporations and shareholders, and limited liability companies and members. Because of the amendment, agreements executed after its August 1, 2020 effective date can stop a partner, shareholder or member from both owning or being an interest holder in a competing business and from becoming employed by an established competitor.
For non-compete agreements executed prior to August 1, 2020 (the effective date of the amendment), an otherwise valid non-compete agreement can only be enforced against a partner, shareholder or member if they are an owner or interest holder in a competing business. You cannot, however, enforce a non-compete agreement against a partner, shareholder or member for becoming employed by an established competitor.
It is smart business, therefore, to have your non-compete agreements with partners, shareholders or members re-executed after August 1, 2020.