RDCSB345 506 2135
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
SB 345 Reengrossed 2020 Regular Session Johns
Present law provides that except as provided by law, every contract or agreement by which
anyone is restrained from exercising a lawful profession, trade, or business of any kind shall
be null and void.
Present law provides that upon or in anticipation of the dissolution of a partnership, the
partnership and the partners may agree that none of the partners will carry on a similar
business within a specific area and for a specified period of time.
Proposed law adds that the agreement can restrain the partners from engaging in a similar
business within a specific area and for a specified period of time.
Present law provides that a franchise may enter into a contract that requires the franchisee
to refrain from competing with certain persons or engaging in any other business similar to
the franchise for a specified period of time.
Proposed law adds that the contract can restrain the franchisee from carrying on any other
business similar to the franchise.
Present law allows a corporation, partnership, and a limited liability company to agree that
its shareholders, partners, or members will refrain from carrying on or engaging in a business
similar to that of their business within a specific area and for a specified period of time after
the date the shareholder, partner, or member's relationship with the business entity ends.
Present law provides that a person who becomes employed by a competing business,
regardless of whether or not that person is an owner or equity interest holder of that
competing business, may be deemed to be carrying on or engaging in a business similar to
that of the party having a contractual right to prevent that person from competing.
Proposed law extends the application of present law to a corporation, partnership, limited
liability, and franchise.
Effective August 1, 2020.
(Amends R.S. 23:921(D), (E), and (F)(1)(b) and (c))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Commerce to the
reengrossed bill:
1. Make technical changes.
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