United States District Court, E.D. Louisiana
ORDER AND REASONS
M. AFRICK UNITED STATES DISTRICT JUDGE
the Court is a motion filed by plaintiff Sean O'Sullivan for
summary judgment against defendant Sunil Gupta, M.D., LLC
(“RSI”). RSI opposes the motion.
foregoing reasons, the Court will grant the motion as set
following facts are undisputed: Sean O'Sullivan is an
ophthalmologist employed by RSI-shorthand for the Retina
Specialty Institute-which is owned by Sunil Gupta, M.D.,
O'Sullivan works at RSI's two locations in Louisiana,
one in Metairie and the other in Covington.
O'Sullivan joined RSI, O'Sullivan and RSI executed a
Noncompetition and Nonsolicitation Agreement (“RSI
Agreement”) designed to restrict O'Sullivan's
ability to compete against RSI if and when O'Sullivan
left RSI. The RSI Agreement provides in part that
“for a restrictive period of two (2) years following
either the expiration or termination of”
O'Sullivan's employment from RSI “for any
reason, ” O'Sullivan will not compete against RSI
by engaging in the practice of ophthalmology, or advertising
for or soliciting patients, in the “Restrictive
Territory.” The RSI Agreement also limits
O'Sullivan's ability to solicit RSI
Agreement defines the “Restrictive Territory” as
“the geographical area inside of a fifty (50) mile
radius of any office or facility of Employer which exists or
existed at the time during the Employment
relationship.” With respect to the two-year
“restrictive period, ” the RSI Agreement provides
for its automatic extension “for whatever length of
time” that O'Sullivan is in violation of the RSI
Agreement, or when “[a]ny litigation (including
appeals) is pending” that challenges or seeks to
enforce the RSI Agreement.
Agreement also includes several reformation and severability
provisions. One of these provisions provides that the
invalidation of any portion of the RSI Agreement does not
affect the enforceability of the remaining
portions.Another provides that “[i]f the
period of time or geographic area specified in th[e] [RSI]
Agreement should be adjudged unreasonable in any proceeding,
then the period of time or geographic area shall be”
reformed “so that such restrictions may be enforced for
such time or geographic area as is adjudged to be reasonable
and enforceable, and shall not affect the enforceability of
any other provision.”
has now moved the Court for summary judgment as to his
claim for declaratory judgment. O'Sullivan argues that
certain portions of the RSI Agreement-namely, paragraphs 5
through 8, as well as paragraphs 11 and 13- violate Louisiana
law, and are therefore null and void. Defendant
opposesO'Sullivan's motion as overbroad.
judgment is proper when, after reviewing the pleadings, the
discovery and disclosure materials on file, and any
affidavits, the court determines that there is no genuine
dispute of material fact. See Fed. R. Civ. P. 56.
“[A] party seeking summary judgment always bears the
initial responsibility of informing the district court of the
basis for its motion and identifying those portions of [the
record] which it believes demonstrate the absence of a
genuine issue of material fact.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). The party seeking
summary judgment need not produce evidence negating the
existence of material fact, but need only point out the
absence of evidence supporting the other party's case.
Id.; Fontenot v. Upjohn Co., 780 F.2d 1190,
1195 (5th Cir. 1986).
the party seeking summary judgment carries its initial
burden, the nonmoving party must come forward with specific
facts showing that there is a genuine dispute of material
fact for trial. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986). The showing of a
genuine issue of material fact is not satisfied by creating
“‘some metaphysical doubt as to the material
facts, ' by ‘conclusory allegations, ' by
‘unsubstantiated assertions, ' or by only a
‘scintilla' of evidence.” Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)
(citations omitted). Instead, a genuine issue of material
fact exists when the “evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). The party responding to the motion for
summary judgment may not rest upon the pleadings, but must
identify specific facts that establish a genuine issue.
Id. The nonmoving party's evidence, however,
“is to be believed, and all justifiable inferences are
to be drawn in [the nonmoving party's] favor.”
Id. at 255; see also Hunt v. Cromartie, 526
U.S. 541, 552 (1999).
law governs the interpretation and enforcement of the RSI
Agreement-has a “longstanding policy against
covenants not to compete.” Team Envtl.
Serv., Inc. v. Addison, 2 F.3d 124, 126 (5th Cir. 1993);
see also Water Processing Tech., Inc. v. Ridgeway,
618 So.2d 533, 535 (La. Ct. App. 4th Cir. 1993) (“A
contract or agreement which prohibits an employee from
competing with a former employer consistently has been found
to be against public policy in Louisiana.”). Under La.
R.S. § 23:921, the general rule is that “[e]very
contract or agreement, or provision thereof, by which anyone
is restrained from exercising a lawful profession, trade, or
business of any kind . . . shall be null and void.” La.
R.S. § 23:921(A)(1). However, where such contracts and
agreements meet certain strict requirements, they
“shall be enforceable.” Id.
• “Any person . . . may agree” not to (1)
carry on or engage in a business similar to the
employer's business (“noncompetition
agreement”), or (2) solicit the employer's
customers (“nonsolicitation agreement”);
• “Any person . . . may agree” to a
noncompetition or nonsolicitation agreement “within a
specified parish or parishes, municipality or municipalities,
or parts thereof, ” as long as the employer operates in
those locations (“geographic requirement”); and
• “Any person . . . may agree” to a
noncompetition or nonsolicitation agreement “not to
exceed a period of two years from termination of
employment” (“time requirement”).
Id. § 23:921(C). In short, “a valid
non-competition agreement may limit competition only
in a business similar to that of the employer, in a specified
geographic area, for up to two years from termination of
employment.” Parker v. Surface Works, Inc.,
No. 2015-1583, 2016 WL 5110048, at *3 (La. Ct. App. 1st Cir.
Sept. 16, 2016) (emphasis in original); see also
Affordable Roofing, Siding, and Gutters, Inc. v.
Artigues, No. 16-16872, 2017 WL 713693, at *3 (E.D. La.
Feb. 23, 2017) (Africk, J.) (“Non-solicitation of
customers provisions in Louisiana are subject to the same
restrictions as non-compete provisions.”).
policy requires that covenant-not-to-compete agreements must
be strictly construed in the employee's favor.”
Daiquiri's III on Bourbon, Ltd. v. Wandfluh, 608
So.2d 222, 224 (5th Cir. 1992) (internal quotation marks
omitted); see also Arthur J. Gallagher & Co. v.
Babcock, 703 F.3d 284, 288 (5th Cir. 2012) (citing
SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So.2d
294, 298 (La. 2001)). In that vein, these contracts and
agreements “must strictly comply with the requirements
contained in the statute.” Team Envtl. Serv.,
2 F.3d at 126 (quoting Comet Indus., Inc. v.
Lawrence, 600 So.2d 85, 88 (La. Ct. App. 2d Cir. 1992)).
respect to La. R.S. § 23:921's geographic
requirement, courts treat “mechanical adherence”
to the statute as “especially” imperative.
Gearheard v. De Puy Orthopaedics, Inc., No. 99-1091,
1999 WL 638582, at *4 (E.D. La. Aug. 19, 1999) (Clement, J.)
(internal quotation marks omitted). The Court itself recently
emphasized that strict observance of the geographic
requirement was consistent with both the statute's plain
text and policy objectives. See Affordable
Roofing, 2017 WL 713693, at *2-*3. As such, “[t]he
absence of the required geographic limitation is fatal to a
noncompetition agreement and renders it invalid.”
Action Revenue Recovery, L.L.C. v. eBusiness Group,
L.L.C., 17 So.3d 999, 1003 (La. Ct. App. 2d Cir. 2009).
“[b]ecause [the geographic requirement] . . . speaks to
noncompetition ‘within a specified parish or parishes,
municipality or municipalities, or parts thereof, '
Louisiana courts have stated that non-competition agreements
failing to specify the parish, municipality or parts thereof
are unenforceable.” Gearheard, 1999 WL 638582,
at *4 (quoting La. R.S. § 23:921(C)); see also
Id. (citing cases). For example, where noncompetition or
nonsolicitation agreements define their geographic scope in
miles, rather than municipalities-or parishes, or parts
thereof- courts have routinely invalidated them. See,
e.g., Team Envtl. Serv., 2 F.3d at 126
(“On their face, LRI's agreements do not conform to
the statutory requirements because they prohibit competition
within 200 miles of the employees' base of operations
rather than specifying the parishes or municipalities in
which LRI does business.”); Francois Chiropractic
Center v. Fidele, 630 So.2d 923, 926 (La. Ct. App. 4th
Cir. 1993) (invalidating a covenant not to compete that
prohibited competition “within a ten (10) mile radius
of the outer city limits of New Orleans, Louisiana, ”
id. at 924); Medivision, Inc. v. Germer,
617 So.2d 69, 73 (La. Ct. App. 4th Cir. 1993) (concluding
that a covenant not to compete is unenforceable where it bars
the employee from “providing ophthalmological services
within ten miles of any office of” the employer,
id. at 70).
challenges certain provisions of the RSI Agreement as
transgressing La. R.S. § 23:921. The Court will examine
each of these provisions in turn.
first challenges the legality of paragraph 5 of the RSI
Agreement, which is designated as a covenant not to compete.
Paragraph 5 provides that O'Sullivan-“for a
restrictive period of two (2) years following either the
expiration or termination of [O'Sullivan's]
employment with [RSI] for any reason”-“shall
• (a): “Practice the medical specialty of
ophthalmology or retinal surgery within the Restrictive
Territory . . . in any capacity . . . that competes with any
part of [RSI's] business . . .”;
• (b): “Perform services or maintain staff
privileges” at any medical facility “within the
Restrictive Territory . . . which competes with any part of
• (c): “[A]dvertise in or solicit patients in the
Restrictive Territory”; or
• (d): “[A]ccept or engage in any business or
activity that requires him to use or reveal any confidential
5 also includes an exemption from subsections (a) through (d)
for O'Sullivan's teaching position at the Louisiana
State University (“LSU”) School of
starters, subsections (a) through (c) of paragraph 5 aim to
restrict O'Sullivan's ability to practice
ophthalmology and so constitute “provision[s] . . . by
which [O'Sullivan] is restrained from exercising a lawful
profession, trade, or business.” La. R.S. §
23:921(A)(1). As such, these provisions are subject to §
23:921. RSI does not argue otherwise.
O'Sullivan and RSI dispute whether subsection (d) of
paragraph 5 is subject to § 23:921. Pointing out that
subsection (d)'s language aims to protect RSI's
putative confidential business information,  RSI argues
that subsection (d) is simply a confidentiality
agreement. If RSI is correct, then subsection (d)
is not subject to § 23:921 and is enforceable under
Louisiana law. See Novelaire Tech., L.L.C. v.
Harrison, 50 So.3d 913 (La. Ct. App. 4th Cir. 2010)
(“An employer may require an employee not to disclose
confidential information.”); Maestri v. Destrehan
Veterinary Hosp., Inc., 554 So.2d 805, 810 (La. Ct. App.
5th Cir. 1989); Engineered Mech. Serv., Inc. v.
Langlois, 464 So.2d 329, 334 n.15 (La. Ct. App. 1st Cir.
1984) (“Confidentiality agreements have been held
enforceable and not subject to the prohibition (and
requirements) of La. R.S. 23:921.”).
contrast, O'Sullivan argues that subsection (d)
constitutes a classic covenant not to compete and therefore
it is subject to § 23:921. O'Sullivan points to
decisions from other jurisdictions in which courts have
construed similar language in employment contracts as
creating covenants not to compete. O'Sullivan also
points to language in the RSI ...