RÉSUMÉ DIGEST
ACT 121 (SB 345) 2020 Regular Session Johns
Prior law provided 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.
Prior law provided 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.
New 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.
Prior law provided 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.
New law adds that the contract can restrain the franchisee from carrying on any other
business similar to the franchise.
Prior law allowed 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.
Prior law provided 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.
New law extends the application of prior 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))