Comet Industries, Inc. v. LawrenceComet Industries, Inc. v. Lawrence
Plaintiff-appellant Comet Industries, Inc. (Comet) appeals the district court‘s denial of its request for a preliminary injunction to prevent defendant-appellee Gary Wade Lawrence (Lawrence), one of Comet‘s former employees, from working for defendant-appellee Steel Processing Services, Inc. (Steel), one of Comet‘s competitors, and to prevent Steel from employing Lawrence. We affirm.
Lawrence had been employed by Comet in 1988 in its air brake facility. In 1990 he was transferred to industrial sales. After losing some sales personnel to the competition during 1990, Comet decided to require its key personnel and sales representatives to sign employment agreements which included an agreement by the employee not to “engage in any business or represent any other company or business which suppliеs products or services which are similar to or are competitive with those provided at any time” during the term of the agreement with the plaintiff. These agreements purported to apply across the entire continental United States.
In January 1991, Lawrence was given the agreement to sign in the course of his annual evaluation. When he specifically askеd what alternative he had to signing the contract, he was advised that resignation was the only other option. On January 15, 1991, Lawrence signed the document.
As part of his annual evaluation, Lаwrence received an increase in pay from $1500 per month to $1625 per month. He was a salaried employee who received no commissions for his sales.1 Testimony at
In March 1991, Lawrence was told that he was needed back in the air brakе facility for six months and that he would be transferred out of sales, with no reduction in pay. Lawrence specifically asked whether he could refuse and was told that a refusal was the same as a resignation. Lawrence considered the matter overnight and agreed to be transferred, but asked to be able to use up his accumulated vacation prior to thе transfer. Lawrence returned to Comet on April 1, 1991, and resigned his job. He went to work for Steel the same day.
On April 24, 1991, Comet filed suit against Lawrence and Steel, seeking to enjoin Lawrencе from working for Steel and Steel from employing Lawrence in the 24-parish area in Louisiana where Comet carried on its business.2 Additionally, Comet sought monetary damages from both defendants. Comet sought and was granted a temporary restraining order.
Following an adversarial hearing, the district court briefly took the matter under advisement and denied the preliminary injunction and dissоlved the TRO. Plaintiff appeals the denial of injunctive relief. Both defendants have answered, seeking damages for frivolous appeal.
Every 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, except as specifically provided for by law.
One of the specific exceptions is that any person who is employed as an agent, servant, or employee may agree with his employer to refrain from carrying on or engaging in а 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, sо long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment.
The agreement at issue purports tо prohibit Lawrence from competing against Comet “anywhere within the continental United States....” Clearly, the instant non-competition provision is not enforceable as written because it fails to specify the “parish or parishes, municipality or municipalities, or parts thereof” wherein Comet carried on its business. Thus, the central question in this litigation is whether the “saving сlause” contained in the document provides a means for enforcing the contract in the limited fashion sought by plaintiff.
Paragraph 8 of the employment agreement provides that if any of the provisions contained in paragraph 7, the non-competition paragraph, are “excessively broad” then it shall be limited and reduced to make it compatible with applicable law.
Plaintiff argues that in the event we conclude that the lack of territorial limitations renders the non-competition clause without effect, then Comet is еntitled to revive that clause, by virtue of the saving clause, but only to the extent of those 24 parishes where it does business. We disagree. As the statute itself so plainly says, these contracts are against public policy,
In reaching this result, we note a lack of jurisprudence interprеting the recent legislation. However, Taquino v. Teledyne Monarch Rubber Company, 893 F.2d 1488 (5th Cir.1990), provides support for our position. There, the federal court determined that under Louisiana law the non-competition agreement аt issue there could not be enforced because of a lack of a territorial limitation.
In support of its argument that this saving clause remedies the lack of a geographiсal restriction, Comet cites A. Sulka & Co. v. City of New Orleans, 208 La. 585, 23 So.2d 224 (1945); Moorman & Givens v. Parkerson, 127 La. 835, 54 So. 47 (1911); Stroud v. Northwestern National Ins. Co., 360 So.2d 528 (La.App. 2d Cir.1978), writ denied, 362 So.2d 575 (La.1978); and Buckeye Garment Rental Co. v. Jones, 276 F.Supp. 560 (E.D.La.1967).
None of the cited cases provide any real support for plaintiff‘s argument. In Moorman & Givens, the Louisiana Supreme Court essentially inferred a geographiсal limitation from the context of the agreement. A. Sulka & Co. held that new legislation which contains a savings clause only maintains the status quo for those affected parties who are not сovered by the new act. The insurance policy in Stroud contained a prescriptive period which was too restrictive, but the acceptable period could be eаsily ascertained by all by merely referring to a public document. And the severability clause in Buckeye Garment only saved what was discoverable within the four corners of the same contract.
The district court‘s dissolution of the temporary restraining order and refusal to grant Comet a preliminary injunction was correct. Comet‘s arguments to the contrary are without merit.
Both defendants havе filed answers to Comet‘s appeal, seeking damages for frivolous appeal pursuant to
We are reminded by the jurisprudence that our focus in the question of whether an appeal is frivolous is to be directed to the nature of the appeal itself rather than to the actions of the appellant which gave rise to the lawsuit. It is manifest that damages for frivolous appeal will be awarded only when it is clear that the appeal is taken solely for delay or it is clear that counsel does not seriously believe in the position advanced. Guy v. Madison Parish School Board, 579 So.2d 1108 (La. App. 2d Cir.1991); Lowe v. Rivers, 465 So.2d 839 (La.App. 2d Cir.1985). Moreover, the position advanced on appeal must be so ridiculous or so opposed to rational thinking that it is evident beyond any doubt that the position is deliberately proposed for ulterior purposes. Parker v. Interstate Life & Accident Insurance Co., 248 La. 449, 179 So.2d 634 (1965); Guy v. Madison Parish School Board, supra.
Given the changes in this area of the law within the last few years, when viewed in the context of a lack of jurisprudential interpretation of that recent legislation, we conclude that damages for frivolous appeal are inappropriate.
The judgment of the district court is affirmed, with all costs to be paid by plaintiff-appellant Comet Industries.
AFFIRMED.