Envtl. Safety & Health Consulting Servs. v. Fowler
| Decision Date | 11 March 2020 |
| Docket Number | NO. 2019-CA-0813,2019-CA-0813 |
| Parties | ENVIRONMENTAL SAFETY & HEALTH CONSULTING SERVICES, INC. v. JONATHAN FOWLER, ET AL. |
| Court | Court of Appeal of Louisiana — District of US |
APPEAL FROM 25TH JDC, PARISH OF PLAQUEMINES
NO. 65-226, DIVISION "B"
(Court composed of Chief Judge James F. McKay, III, Judge Paula A. Brown, Judge Dale N. Atkins)
Timothy M. Brinks
Jeffrey E. Richardson
ADAMS AND REESE LLP
701 Poydras Street
4500 One Shell Square
New Orleans, LA 70139-6534
COUNSEL FOR PLAINTIFF/APPELLANT
Scott L. Sternberg
Michael Finkelstein
David LaCerte
M. Suzanne Montero
STERNBERG NACCARI & WHITE, LLC
935 Gravier Street, Suite 2020
COUNSEL FOR DEFENDANT/APPELLEE
Appellant, Environmental Safety & Health Consulting Services, Inc. ("ESH"), appeals the trial court's denial of its petition for preliminary injunction, which it sought to enforce noncompetition agreements it executed with its former employees, Jonathan Fowler and Logan Jordan. For the reasons that follow, we reverse the trial court's judgment and remand for further proceedings.
ESH is a company that performs oil and hazardous materials spill containment and cleaning services throughout the state, including in Plaquemines Parish. Mr. Fowler and Mr. Jordan are both former employees of ESH. Mr. Fowler originally began work with ESH in 2013 and signed a noncompetition and non-solicitation agreement with ESH. He was hired as a spill response safety supervisor at ESH in February 2017. Although he began his work at ESH's site in Houma, Louisiana, Mr. Fowler was eventually promoted to the position of safety coordinator and transferred to ESH's location in LaPlace, Louisiana. In December 2018, he was again promoted to the position of site safety representative at the Alliance Phillips 66 ("P66") refinery in Plaquemines Parish.
Meanwhile, Mr. Jordan first became employed by ESH in 2016, and he also signed a noncompetition and non-solicitation agreement with ESH when he began working at ESH. Mr. Jordan left ESH for other employment in June 2018, but returned to work at ESH in December 2018, after first declining an offer of employment in September 2018. Mr. Jordan began working for ESH at the P66 refinery later in December 2018.
On December 10, 2018, both Mr. Jordan and Mr. Fowler each executed new noncompetition and non-solicitation agreements (the "Agreements") with ESH. The Agreements were substantively identical and provided: (1) that Mr. Jordan and Mr. Fowler desired and agreed to be legally bound by the Agreements; (2) that Mr. Jordan and Mr. Fowler would not carry on or engage in a similar business as that of ESH both during their employment and for two years after the termination of their employment with ESH; (3) that Mr. Jordan and Mr. Fowler would not lend or allow their name or reputation to be used in any business similar to that of ESH; and (4) that Mr. Jordan and Mr. Fowler would not allow their skills to be used in any other business similar to that of ESH. The Agreements defined ESH's business as follows:
including any enterprise engaged in any sort of oil and hazardous materials spill containment and cleanup services, industrial cleaning services, waste transportation and disposal, NORM remediation, turnaround services, environmental consulting and training, or environmental product sales. It shall also be understood as including any enterprise engaged in any of the following additional activities: Emergency/Spill Management Team Member, technical plan writing for compliance with regulatory agencies (Minerals Management Services. Environmental Protection Agency. United States Coast Guard. Louisiana Department of Environmental Quality. (Emphasis in original).
The Agreements also listed a number of parishes in Louisiana, including Plaquemines Parish, and counties in Texas where the Agreements would be binding upon Mr. Fowler and Mr. Jordan. Finally, the Agreements provided that ESH would be entitled to injunctive relief without the necessity of proving irreparable harm in the event the Agreements were breached.
On April 8, 2019, both Mr. Jordan's and Mr. Fowler's employment with ESH ended. Around that time, ESH learned that it would not be awarded a long-term contract to continue working at the P66 refinery; instead, the contract had been awarded to Clean Harbors, a company that would perform the same work ESH had been performing at the P66 refinery. Both Mr. Fowler and Mr. Jordan took positions with Clean Harbors in April 2019.
On April 22, 2019, ESH filed a Petition for Specific Performance, Injunctive Relief, and Damages, naming Mr. Fowler and Mr. Jordan as defendants. In the petition, ESH alleged that Mr. Fowler and Mr. Jordan were both former employees of ESH who resigned their positions to work for ESH's competitor, Clean Harbors; that both Mr. Fowler and Mr. Jordan executed the Agreements during their employment with ESH; and that Mr. Fowler and Mr. Jordan violated the Agreements by going to work for Clean Harbors. ESH requested preliminary and permanent injunctive relief in the form of the court ordering Mr. Fowler and Mr. Jordan to cease working for Clean Harbors. ESH further requested specific performance of the Agreements and damages—including lost revenues and lost business opportunities—and attorney's fees.
Mr. Fowler and Mr. Jordan answered the petition, arguing that they were fraudulently induced into signing them based on misrepresentations that ESH had secured the long-term contract at the P66 refinery and the Agreements were, thus,void for vices of consent. Alternatively, they argued that the Agreements were invalidly overbroad and vague and that they had not violated them.
Trial on the Petition for Preliminary Injunction commenced on May 9, 2019. At the conclusion of the hearing, the trial court took the matter under advisement. On May 17, 2019, the trial court rendered judgment denying ESH's petition for preliminary injunction. In its reasons for judgment, the trial court found that, even though the facts presented at trial established that Mr. Fowler and Mr. Jordan both executed the Agreements and violated them, ESH had not shown irreparable injury and was not entitled to relief. The trial court cited West Carroll Health System, L.L.C. v. Tillman, 47,152, pp. 18-17 (La. App. 2 Cir. 5/16/12), 92 So.3d 1131, 1141 (). The trial court found that ESH did not prove that Mr. Fowler and Mr. Jordan "harmed" ESH's business by going to work for Clean Harbors. The trial court further found that ESH did not prove that Mr. Fowler's and Mr. Jordan's employment at Clean Harbors was the reason the long-term contract at the P66 refinery was awarded to Clean Harbors and not ESH. Therefore, injunctive relief was denied.
This appeal followed.
The dispositive issue of this appeal is whether the Agreements are enforceable against Mr. Fowler and Mr. Jordan and whether ESH has made a prima facie case showing it is entitled to preliminary injunctive relief.
At the outset, it must be noted that noncompetition agreements are not favored in Louisiana. "Louisiana's strong public policy restricting non-competition agreements is based upon an underlying state desire to prevent an individual from contractually depriving himself of the ability to support himself and, consequently, becoming a public burden." Choice Prof'l Overnight Copy Serv., Inc. v. Galeas, 2011-0034, p. 9 (La. App. 4 Cir. 5/25/11), 66 So.3d 1216, 1221 (citing Clear Channel Broadcasting, Inc. v. Brown, 2004-0133, p. 4 (La. App. 4 Cir. 3/30/05), 901 So.2d 553, 558).
To echo this policy, the Louisiana Legislature enacted La. R.S. 23:9211, which declares that all noncompetition agreements are null, except when they meet certain exceptions, including: (1) a two-year maximum duration; (2) a specific list of the areas in which the former employee is restrained from competing with the employer's business; and (3) competition between the former employee and employer.
La. R.S. 23:921(H) allows for an employer to seek injunctive relief where there is a breach of a noncompetition agreement. Typically, in order to prevail on a petition for injunctive relief, a petitioner must show that irreparable injury, loss, or damage will result to them if the relief is not granted. La. C.C.P. art. 3601(A). La. R.S. 23:921, however, dispenses with this requirement and instead provides that "upon proof of the obligor's failure to perform, and without the necessity of proving irreparable injury, a court of competent jurisdiction shall order injunctive relief enforcing the terms of the agreement." La. R.S. 23:921(H) (Emphasis added). Though the court is mandated to issue an injunction upon proof that the obligor failed to perform under the agreement, the employer must still establish that it is entitled to relief. Vartech Systems, Inc. v. Hayden, 2005-2499, pp. 7-8 (La. App. 1 Cir. 12/20/06), 951 So.2d 247, 255.
Ordinarily, while a district court is given broad discretion in granting or denying a petition for preliminary injunction and those findings will not be disturbed by an appellate court in the absence of a clear abuse of discretion, that standard of review is applicable only when there is a finding that the trial court committed no error of law. Forrester v. Bruno, 2018-0648, p. 17 (La. App. 4 Cir. 5/1/19), ___ So.3d ___, ___, 2019 WL 1940341, *8.
We find that the trial court committed an error of law in requiring that ESH prove injury before granting the preliminary injunction. La. R.S. 23:921(H) explicitly removes the injury requirement in the context of noncompetition agreements in order for injunctive relief to be rendered. The...
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