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McLaughlin v. Bancorpsouth Insurance Services, Inc.

United States District Court, E.D. Louisiana

February 22, 2018

MICHAEL SCOTT MCLAUGHLIN
v.
BANCORPSOUTH INSURANCE SERVICES, INC.

         SECTION: "A" (5)

          ORDER AND REASONS

          JAY C. ZAINEY UNITED STATES DISTRICT JUDGE.

         The following motions are before the Court: Second Motion for Partial Summary Judgment (Rec. Doc. 39) filed by Michael Scott McLaughlin; Motion for Summary Judgment (Rec. Doc. 46) filed by BancorpSouth Insurance Services, Inc. Both motions are opposed. The motions, submitted on December 13, 2017, and January 24, 2018, are before the Court on the briefs without oral argument.

         I. Background

         This dispute arises out of Michael Scott McLaughlin's resignation from Bancorp Insurance Services, Inc. (Bancorp or BXSI), an insurance brokerage firm. McLaughlin had been employed with Bancorp since 2004 (and its predecessor since 1994). McLaughlin resigned from Bancorp on August 8, 2017, to accept employment with a competitor, Alliant Insurance Services, Inc. McLaughlin told Bancorp that he was leaving to open a Baton Rouge office for Alliant.

         These consolidated actions pertain to a non-solicitation provision contained in McLaughlin's employment contract with Bancorp (“the Producer Agreement”). McLaughlin initiated suit in this Court in order to have the non-solicitation provision declared invalid under Louisiana law. Bancorp then filed a new lawsuit in this Court to enforce the agreement and immediately moved for preliminary, injunctive relief. Bancorp's separate lawsuit was transferred to this Court and the two cases were consolidated. The Court has twice rejected Bancorp's attempt to obtain preliminary injunctive relief. (Rec. Docs. 9, 35).

         McLaughlin now moves for partial summary judgment contending that the non-solicitation provision contained in the Producer Agreement is invalid and unenforceable under La. R.S. § 23:921. McLaughlin seeks partial summary judgment so that he can call on his former customers completely unfettered by the non-solicitation provision.[1]

         Bancorp moves for summary judgment in cross fashion seeking a ruling that the Producer Agreement is valid and enforceable, and that the non-solicitation provision contained therein is enforceable.[2]

         A jury trial is scheduled for May 7, 2018.

         II. Discussion

         Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, " when viewed in the light most favorable to the non-movant, "show that there is no genuine issue as to any material fact." TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at 248). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing Anderson, 477 U.S. at 255). Once the moving party has initially shown "that there is an absence of evidence to support the non-moving party's cause, " Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-movant must come forward with "specific facts" showing a genuine factual issue for trial. Id. (citing Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)). Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993)).

         When faced with a well-supported motion for summary judgment, Rule 56 places the burden on the non-movant to designate the specific facts in the record that create genuine issues precluding summary judgment. Jones .v Sheehan, Young, & Culp, P.C., 82 F.3d 1334, 1338 (5th Cir. 1996). The district court has no duty to survey the entire record in search of evidence to support a non-movant's position. Id. (citing Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1992); Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300, 1307 (5th Cir. 1988)).

         Louisiana Revised Statute § 23:921 provides in relevant part:

Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this Section, shall be null and void. However, every contract or agreement, or provision thereof, which meets the exceptions as provided in this Section, shall be enforceable.
Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent, servant, or employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment . . . .

La. R.S. § 23:921(A)(1), (C) (emphasis added).

         The statute defines the limited circumstances under which a noncompetition or non-solicitation clause may be valid in the context of certain enumerated business relationships. SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So.2d 294, 298 (La. 2001) (citing Louisiana Smoked Prods., Inc. v. Savoie's Sausage & Food Prods., 696 So.2d 1373, 1379 (La. 1977)). Because such covenants are in derogation of the common right, they are strictly construed against the party seeking their enforcement. Id. (citing Hirsh v. Miller,187 So.2d 709, 714 (La. 1966); Turner Prof. Servs. v. Broussard, 762 So.2d 184, 185 (La.App. 1st Cir. 2000)). Under Louisiana law, an ambiguous contractual provision must be interpreted against the party who furnished its text. Arms ...


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