As in most states, the enforceability of restrictive covenants or non-compete clauses in the Fifth Circuit turns primarily on the reasonableness of the restriction’s geographic and temporal scope. Louisiana and Texas have enacted statutes explaining when non-competes may be enforced. But in Mississippi, enforcement is determined entirely by common law, and courts will consider the public interest in addition to the interests of the parties involved.
State |
Law governing restrictive covenants |
Restrictive covenants in employment agreements may be enforced if: |
| Louisiana | La. Stat. Ann. § 23:921. |
1. It prevents the employee from engaging in a competing or similar business. 2. It is for a period of, at most, two years after the individual’s termination date. 3. It specifies the geographic scope by identifying the covered parishes and municipalities. 4. The geographic scope is limited to areas where the employer conducts business. |
| Texas | Tex. Bus. & Com. Code Ann. §§ 15.50; 15.52. |
1. It is ancillary to or part of an otherwise enforceable agreement when the agreement is made. 2. It is reasonable concerning time, geographical area, and scope of activity to be restrained. 3. It imposes no greater restraint than necessary to protect the employer’s (or promisee’s) goodwill or other business interest. |
| Mississippi |
Common law Redd Pest Control Co. v. Heatherly, 157 So.2d 133 (Miss. 1963). |
It is reasonable considering the following factors: 1. The duration of the restraint. 2. The geographic scope of the restraint. More generally, courts will consider the rights of the employer, the rights of the employee, and the rights of the public when weighing these factors. |