DELTA FUEL COMPANY, ET AL.
FROM THE SEVENTH JUDICIAL DISTRICT COURT PARISH OF CONCORDIA,
DOCKET NO. 49953 HONORABLE KATHY JOHNSON, PRESIDING
Jennifer L. Anderson C. Parker Kilgore Jones Walker, LLP
ATTORNEY FOR PLAINTIFF/APPELLEE Delta Fuel Company, et al.
Sangisetty Michael Lillis ATTORNEY FOR INTERVENOR/APPELLANT
Herring Gas Company, Inc.
Landry Tanner Magee Landry Magee, LLC ATTORNEY FOR
DEFENDANT/APPELLANT Eddie Loyed
composed of Sylvia R. Cooks, Shannon J. Gremillion, and
Phyllis M. Keaty, Judges.
R. COOKS JUDGE
appeal arises out of Defendant, Eddie Loyed's, prior
employment with Plaintiff, Delta Fuel Company, Inc. and his
present employment with Herring Gas Company, Inc. At issue is
an "At Will Employment Agreement" (hereafter
Agreement) executed between Loyed and Delta Fuel on June 14,
worked in various capacities for Delta Fuel beginning with
his hiring in April of 2010. Loyed initially drove a truck
that supplied propane and other petroleum products to various
businesses. After receiving additional training from Delta
Fuel, Loyed was named the Southern District Propane Manager
for the Natchez, Mississippi branch of Delta Fuel. His
responsibilities included day-today management of Delta
Fuel's propane business in the Southern District, which
included various parishes in Louisiana and counties in
Mississippi. Loyed prepared pricing information for current
and potential clients, identified potential clients,
solicited business from potential clients, and maintained
client/prospect information. According to Delta Fuel, as a
high ranking employee, Loyed had access to significant
confidential and proprietary business information related to
customers. This confidential and proprietary information
included customer lists, customer financial information,
marketing materials, pricing arrangements and business plans.
Delta Fuel maintained if this information was obtained by a
competitor, it would give a significant advantage to any
competitor seeking to service Delta Fuel's customers.
to Delta Fuel, it had an issue with another former employee,
and in 2010, asked all current employees to review and enter
into non-compete agreements. Loyed was given a copy of the
non-compete agreement and could have consulted an attorney if
he so chose. He signed the non-compete agreement on June 14,
Following a drop in oil prices and general slowdown in the
oil business in early 2016, Delta Fuel underwent internal
restructuring. Some employees in the Natchez office were laid
off, but Loyed maintained his employment, salary and
benefits, although it was testified that the ability of
employees to work overtime hours was largely eliminated.
Loyed was asked to resume driving a propane delivery truck to
make deliveries to customers, rather than some of his prior
managerial duties. Loyed let it be known to his supervisors
and co-workers that he was considering other employment.
According to Steve Wiggington, a Divisional Manager for Delta
Fuel who was Loyed's supervisor, he was asked by Loyed if
Delta Fuel would enforce his non-compete agreement if he
resigned. Wiggington told Loyed that it would be enforced.
Loyed also asked the same question to Victoria Bourke, who
was responsible for the implementation of the non-compete
agreements, and was told by her Delta Fuel would likely
enforce the non-compete agreement.
March 14, 2016, Loyed resigned from his position with Delta
Fuel. He them immediately began employment with Herring Gas.
Delta Fuel asserts that Herring Gas is its direct competitor.
Two days after his resignation, Loyed showed up at the Delta
Fuel offices driving a Herring Gas truck.
thereafter, Delta Fuel filed the present action against Loyed
seeking temporary, preliminary, and permanent injunctive
relief to enforce the non-compete covenant. Initially, the
trial court issued a temporary restraining order in the
matter on the basis of Delta Fuel's motion for same, at
which point Herring Gas intervened in the proceedings.
hearing on the matter was held on May 31, 2016, after which
the trial court issued a preliminary injunction enjoining
Loyed's continued employment with Herring Gas finding him
in breach of the Agreement. The trial court gave the
following reasons in open court in support of its decision:
beginning paragraph of page eight -- I mean paragraph eight,
it does appear to be very definite as to what Mr. Loyed is
agreeing to refrain from engaging in, but when you go down to
paragraph -- the next paragraph, it says, "If employee
becomes employed by a competing business regardless of
whether or not employee is an owner or equity interest holder
of that competing business, employee shall be deemed to be
carrying on or engaging in a business similar to that of the
company." So I believe that the later sentence in that
paragraph does cover the business that Delta Fuel is seeking
to restrict Mr. Loyed from engaging in and I'm going to
deny the request that the preliminary injunction be
trial court signed a final judgment reflecting that ruling on
June 14, 2016. Both Loyed and Herring Gas have appealed the
preliminary injunction, asserting the trial court erred in
finding that Loyed was in violation of the non-compete
agreement and in granting the motion for preliminary
of contractual interpretation are questions of law, which
under Louisiana law are subject to a de novo standard of
review. Mitchell v. Patterson Ins. Co., 00-612
(La.App. 3 Cir. 12/6/00), 774 So.2d 366. Thus, in
interpreting the Agreement at issue, our review is de novo.
Louisiana's public policy has disfavored non-competition
agreements. SWAT 24 Shreveport Bossier, Inc. v.
Bond, 00-1695 (La.6/29/01), 808 So.2d 294. This policy
is based on the state's "desire to prevent an
individual from contractually depriving himself of the
ability to support himself and consequently becoming a public
burden." SWAT 24, 808 So.2d at 298.
"Because such covenants are in derogation of the common
right, they must be strictly construed against the party
seeking their enforcement." Id. at 298.
Revised Statutes 23:921(C) provides an exception to
Louisiana's public policy against ...