Lemoine v. Baton Rouge Physical Therapy
135 So. 3d 771
La. Ct. App.2013Background
- Lance P. Lemoine, a physical therapist, was a BRPT partner from 1993 until his relationship ended in Jan. 2012; as a partner he was contractually an employee of BRPT-Lake.
- Lemoine signed a January 1, 2005 partnership agreement that (1) defined BRPT’s business to include rehabilitative services, (2) required partners to devote their time to BRPT-Lake as employees, and (3) contained a two-year noncompetition clause barring a terminating partner from engaging in rehabilitative services (including as an employee) in East Baton Rouge, Ascension, and Livingston parishes.
- Lemoine sued for declaratory relief seeking to invalidate the noncompetition clause and to permit him to provide outpatient, home-health, or inpatient physical therapy; he also pleaded a LUTPA damages claim based on alleged unfair trade practices.
- Defendants (BRPT and BRPT-Lake) moved for summary judgment; BRPT filed exceptions attacking the LUTPA claim (no cause of action and prematurity).
- The trial court granted defendants’ summary judgment: it held the noncompetition clause valid/enforceable (two-year, specified parishes, applied to employment and ownership), sustained BRPT’s no-cause-of-action exception on the LUTPA claim, and dismissed prematurity as moot. Lemoine appealed; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of noncompetition clause in partnership agreement | Lemoine: clause unenforceable because agreement was with BRPT (partnership) not his employer BRPT-Lake | BRPT: clause valid under La. R.S. 23:921(C) and (D) because partner agreed he was an employee of BRPT-Lake and BRPT was majority owner of BRPT-Lake | Held: enforceable — Lemoine contractually was an employee of BRPT-Lake and Subsections C and D make the restriction valid |
| Whether statute version at agreement date governs | Lemoine: later statutory changes (Subsection K) should apply to invalidate clause | Defendants: governing statute is the version in effect when agreement executed (2005); apply Subsection C and D | Held: apply statute as of 2005; Subsections C and D control and support enforceability |
| Scope of restriction (employment vs. ownership/interest) | Lemoine: exception covers agreements with former employer only, not restriction on employment by another | Defendants: Subsection D deems employment by a competitor as "carrying on" a like business — covers employment and ownership | Held: Subsection D treats employment by a competitor as engaging in the business, so clause prohibits employment with competitor as written |
| LUTPA claim viability | Lemoine: BRPT’s attempt to enforce an invalid, overbroad clause supports LUTPA damages | BRPT: LUTPA claim fails if noncompetition clause is enforceable; also raised prematurity | Held: Because clause is enforceable, LUTPA claim fails (no cause of action); prematurity dismissal moot |
Key Cases Cited
- Olde Nawlins Cookery, L.L.C. v. Edwards, 38 So.3d 1012 (La. App. 1st Cir. 2010) (standard of review for declaratory judgment)
- Louisiana Smoked Products, Inc. v. Savoie’s Sausage and Food Products, Inc., 696 So.2d 1373 (La. 1997) (Louisiana public policy historically disfavors employee noncompetes)
- McAlpine v. McAlpine, 679 So.2d 85 (La. 1996) (policy rationale against contractual deprivation of livelihood)
- SWAT 24 Shreveport Bossier, Inc. v. Bond, 808 So.2d 294 (La. 2001) (interpretation of La. R.S. 23:921 and limits on noncompetes before legislative amendments)
- Green Clinic, L.L.C. v. Finley, 30 So.3d 1094 (La. App. 2d Cir. 2010) (legislative overruling of SWAT court’s rule via subsection D)
- Kimball v. Anesthesia Specialists of Baton Rouge, Inc., 809 So.2d 405 (La. App. 1st Cir. 2001) (statutory framework for noncompetition exceptions across relationships)
- Walker v. Louisiana Health Mgmt. Co., 666 So.2d 415 (La. App. 1st Cir. 1995) (apply statute version in effect when agreement executed)