Provides relative to noncompete agreements. (8/1/20)
This bill would create a more standardized approach to noncompete clauses in Louisiana state law, thus impacting how businesses define competitive practices post-employment. By clarifying the enforceability of these agreements, SB345 seeks to protect local businesses from unfair competition while potentially limiting the employment opportunities available to individuals who seek to enter similar markets after leaving a position. The stipulated two-year fallout period aligns with practices observed in many other states but raises questions about limiting individuals' rights to seek employment in their field of expertise.
Senate Bill 345 aims to amend existing provisions related to noncompete contracts and agreements, especially within the context of partnerships and franchise relationships. The bill clarifies the terms under which noncompete agreements can be enforced, stipulating that both franchisees and employees of franchisors can be legally bound to refrain from competing with their employer or franchisor for a specified period following the termination of their contract. The bill specifically notes that these restrictions can last for up to two years post-termination, potentially affecting a wide array of businesses within Louisiana, especially those involved in franchising.
The sentiment surrounding SB345 appears to be mixed. Proponents of the bill, often representing business interests, argue that it provides necessary protections for businesses against unfair competition and helps to ensure that the value of their investment in employee training and client relationships is preserved. Conversely, critics of the bill raise concerns about potential overreach in limiting employee mobility, suggesting that such restrictions could hinder career development and economic progression for individuals wanting to pursue new job opportunities.
Notable points of contention include the balance between protecting business interests and preserving employees' right to work in their chosen fields without undue restrictions. Opponents argue that the bill disproportionately favors businesses at the expense of employees' freedoms, potentially leading to a chill on individual initiative and entrepreneurship. Further discussion may arise regarding the interpretation of 'competing businesses' and the validity of enforcing such agreements on employees and franchisees, influencing future amendments or regulatory changes to address these concerns.