Multi-state non-compete agreements are commonplace. Enforcing these agreements is generally not a problem, as most states use a reasonableness test for determining their enforceability. Texas law requires an evaluation of reasonableness as to time, geographical area, and activity being restrained, not unlike most other states (Tex. Bus. and Com. Code § 15.50). If the reasonableness test is met, these agreements can be enforceable. Not so in Louisiana.
Companies and individuals outside of Louisiana seeking to do business there are often surprised by Louisiana’s non-compete law. Louisiana does not use a reasonableness test to determine the validity of non-compete agreements. To the contrary, contracts that restrain someone’s right to work are presumed to be invalid in Louisiana. Moreover, Louisiana law prevents efforts to avoid the applicability of Louisiana’s strict law in contractually providing for the applicability of another state’s law in a non-compete agreement involving an employer/employee relationship. In short, in seeking to enforce a non-compete agreement in Louisiana, Louisiana law cannot be avoided.