HIXSON AUTOPLEX OF ALEXANDRIA, INC. v. Lewis

6 So. 3d 423, 8 La.App. 3 Cir. 1142, 2009 La. App. LEXIS 509, 2009 WL 838135
CourtLouisiana Court of Appeal
DecidedApril 1, 2009
Docket08-1142
StatusPublished
Cited by2 cases

This text of 6 So. 3d 423 (HIXSON AUTOPLEX OF ALEXANDRIA, INC. v. Lewis) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HIXSON AUTOPLEX OF ALEXANDRIA, INC. v. Lewis, 6 So. 3d 423, 8 La.App. 3 Cir. 1142, 2009 La. App. LEXIS 509, 2009 WL 838135 (La. Ct. App. 2009).

Opinions

AMY, Judge.

liAn employer and employee entered into a non-competition agreement. The employee was terminated and began to work for a competing company. The employer sought to enforce the non-competition agreement. The trial court, finding one provision invalid on the grounds of it being contrary to public policy, severed the offending provision and enforced the remaining two provisions of the agreement. The employer appeals, contending that the trial court erred by retroactively applying a substantive change to the pertinent statute. For the following reasons, we affirm in part and reverse in part and render judgment.

[424]*424Factual and Procedural Background

The Petition for Injunctive Relief reveals that Hixson Autoplex of Alexandria, Inc. (“Hixson”) is an automobile dealership in the business of the “selling and leasing of automobiles, trucks, vans, accessories, parts, and related equipment as well as the servicing and repair of automobiles, trucks and vans in the Parishes of Rapides, Grant, Vernon, Sabine, Avoyelles, Natchi-toches, Allen, and Evangeline.” The record indicates that Donald Ray Lewis (“Lewis”) began working for Hixson on February 28, 2005, as a vehicle salesperson. Lewis signed a non-competition agreement upon commencement of employment, wherein he pledged, among other things, to refrain from the following activities for a period of two years after suspension or termination of his employment:

(1) Contact, directly or indirectly, any customer of Employer with whom Employee had contact during the Employee’s employment hereunder; or
(2) Carry on or engage in a business similar to that of the Employer in the parishes of Rapides, Grant, Vernon, Sabine, Allen, Avoyelles, Natch-itoches, and Evangeline, so long as Employer continues to carry on a like business therein.
l2(3) Contact, directly or indirectly, any Employee of Employer for the purpose of inducing such employee to own, manage, operate, control, participate in, solicit for, be employed by, or be connected with any person, firm or entity engaged or about to be engaged in a business similar to Employer.

It is not contested that Hixson compensated Lewis fully for his employment and provided him with training, equipment, assistance, advertising, and other business incidentals. Lewis’ employment with Hix-son was terminated on March 22, 2008. According to the record, shortly after his termination with Hixson, Lewis began to work for a competing sales and service dealership in Rapides Parish, M & M Dodge, Inc. Hixson, seeking to have the non-competition agreement enforced against Lewis, filed a Petition for Injunc-tive Relief and Hearing Thereon. Because there was no dispute regarding the material facts, the matter was submitted to the trial court on briefs. The trial court ordered that the first and third provisions of the non-competition agreement be enforced but held that the second provision, which prohibited Lewis from carrying on or engaging in a similar business in the specified parishes, was unenforceable in light of the 2006 amendment to the non-competition statute, La.R.S. 23:921 — an amendment that prohibited employers from contractually restraining automobile salesmen from selling automobiles. Hix-son appeals, asserting that the trial court committed legal error by retroactively applying a substantive change to the law.

Discussion

In Hooper v. Hooper, 06-825, p. 7 (La.App. 3 Cir. 11/2/06), 941 So.2d 726, 731, writ denied, 06-2823 (La.1/26/07), 948 So.2d 177, this court stated:

Where the trial court’s decision is based on an erroneous interpretation or application of law, rather than a valid exercise of discretion, such an incorrect decision is not entitled to deference by the reviewing court. Kem Search, Inc. v. Sheffield, 434 So.2d 1067 (La.1983). The standard of our review is accordingly de novo.

Here, the sole issue to be decided, the validity of a non-competition agreement, is a question concerning the application of law; accordingly, we will review this matter de novo. See Herff Jones, Inc. v. Girouard, 07-393, (La.App. 3 Cir. 10/3/07), [425]*425966 So.2d 1127, writ denied, 07-2464 (La.2/15/08), 976 So.2d 185.

In 2005 — the year Lewis signed the non-competition agreement-La.R.S. 23:921 provided, in pertinent part:

A. (1) Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this Section, shall be null and void.
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C. Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent, servant, or employee may agree with his employer to refrain from carrying on or engaging in a 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, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment. An independent contractor, whose work is performed pursuant to a written contract, may enter into an agreement to refrain from carrying on or engaging in a business similar to the business of the person with whom the independent contractor has contracted, on the same basis as if the independent contractor were an employee, for a period not to exceed two years from the date of the last work performed under the written contract.
D. For the purposes of Subsections B and C, 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.

4Pursuant to 2006 La. Acts, No. 436, § 1, subsection I was added to La.R.S. 23:921 by the legislature on June 15, 2006, and was given effect on August 15, 2006. Louisiana Revised Statutes 23:921(1) provides:

I. (1) There shall be no contract or agreement or provision entered into by an automobile salesman and his employer restraining him from selling automobiles.
(2)(a) For the purposes of this Subsection, “automobile” means any new or used motor-driven car, van, or truck required to be registered which is used, or is designed to be used, for the transporting of passengers or goods for public, private, commercial, or for-hire purposes.
(b) For the purposes of this Subsection, “salesman” means any person with a salesman’s license issued by the Louisiana Motor Vehicle Commission or the Used Motor Vehicle and Parts Commission, other than a person who owns a proprietary or equity interest in a new or used car dealership in Louisiana.

In its Reasons for Judgment, the trial court articulated its understanding of the effect this amendment had on the non-competition agreement between Hixson and Lewis:

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HIXSON AUTOPLEX OF ALEXANDRIA, INC. v. Lewis
6 So. 3d 423 (Louisiana Court of Appeal, 2009)

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Bluebook (online)
6 So. 3d 423, 8 La.App. 3 Cir. 1142, 2009 La. App. LEXIS 509, 2009 WL 838135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hixson-autoplex-of-alexandria-inc-v-lewis-lactapp-2009.