Opinion ID: 1860745
Heading Depth: 1
Heading Rank: 7

Heading: Definition of the business

Text: Bond also argues that an employer must include a definition of the employer's business in a non-compete agreement to avoid overbreadth, relying on the first and fifth circuits. See LaFourche Speech & Language Services, Inc. v. Juckett, 94-1809 (La.App. 1 Cir. 3/3/95), 652 So.2d 679; Daiquiri's III on Bourbon, Ltd. v. Wandfluh, 608 So.2d 222 (La.App.1992). [6] According to Bond, the agreement cited by the plaintiff describes Bond's duties, not the business of the employer SWAT. In contrast to the first and fifth circuits, the third circuit has held that a specific definition of a company's business is not required based on the statutory language of La.Rev.Stat. § 23:921 and the ability to effect an oral noncompetition agreement. See Henderson Implement Co., Inc. v. Langley, 97-1197 (La.App. 3 Cir. 2/4/98), 707 So.2d 482; see also Barnett v. Jabusch, 607 So.2d 1007 (La.App. 3 Cir.1992), writ denied, 610 So.2d 820 (La.1993) (upholding an oral non-competition agreement). The plaintiff argues that La.Rev. Stat. § 23:921 on its face contains no express requirement to include a definition of the employer's business to ensure its validity, and thus, a definition is not required. SWAT further argues that in Daiquiri's, the fifth circuit did not hold that the business must be defined in the agreement but rather that the definition in the agreement was overly broad. The Agreement defines SWAT's business as insurance restoration construction business. The plaintiff alleges that insurance restoration work is a term of art in the construction industry, and clearly understood by Bond. During his deposition and at trial, Bond explained his definition of the term insurance restoration construction business and indicated that he understood what the restoration business was and how it differed from conventional construction work. Bond defined insurance construction restoration work as twenty-four hour repair service responding to storm or fire damage. At the hearing, Cowley testified regarding the nature of insurance restoration work. Insurance restoration construction occurs when any loss or peril occurs, as defined by the applicable insurance policy on the residence. Damage can include anything from traditional storm damage, to vandalism, burglary or a vehicle driven though the home. The work differs from normal construction work because a third party, the insurance company, is involved in the estimating and agreement regarding the necessary repairs. Rather than bidding jobs, the majority of SWAT's work comes from referrals from insurance agents and adjusters. A definition of the employer's business in order to comply with LA.REV.STAT. § 23:921(C) is unnecessary. However, even interpreting the provision to impose this requirement, the evidence clearly establishes that an appropriate definition of SWAT's business exists in the non-competition agreement at issue. Complex, cumbersome, and overly detailed definitions are unnecessary to convey to the employee the scope of the job that is being protected from competition; the definition must only serve to demonstrate a common understanding between the employer and employee regarding the nature of the business. The statutory language of La.Rev.Stat. § 23:921(C), and the legislative history, support a finding that competitors can restrict their employees from working for a business similar to the employer without limitation to situations only where the employee forms their own business or solicits the former employer's customer. Further, the Agreement between Bond and SWAT meets the statutory requirements under La.Rev.Stat. § 23:921 for a valid and enforceable noncompetition clause. Accordingly, I dissent.