Gaylord Broadcasting Co. v. Cosmos Broadcasting Corp.

• Decision Date: 31 October 1984
• Docket Number: No. 84-3119,84-3119
• Parties: GAYLORD BROADCASTING CO., Plaintiff-Appellant Cross-Appellee, v. COSMOS BROADCASTING CORP., Defendant, Lynn Gansar, Defendant-Appellee Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 251

746 F.2d 251

GAYLORD BROADCASTING CO., Plaintiff-Appellant Cross-Appellee, v. COSMOS BROADCASTING CORP., Defendant Lynn Gansar, Defendant-Appellee Cross-Appellant.

No. 84-3119.

United States Court of Appeals Fifth Circuit.

Oct. 31, 1984.

David E. Walker, Michael T. Tusa, Jr., New Orleans, La., for plaintiff-appellant cross-appellee.

Theresa M. Gallion, James D. Carriere, New Orleans, La., for Cosmos.

Edgar L. Sapir, Paul A. Tabary, III, Frank J. Uddo, New Orleans, La., for Gansar.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before GEE, WILLIAMS and JOLLY, Circuit Judges.

PER CURIAM:

In this appeal from the denial of a preliminary injunction, the appellant, Gaylord Broadcasting Co., challenges the district court's application of the four-part test in Hardin v. Houston Chronicle Publishing Co., 572 F.2d 1106 (5th Cir.1978), for determining whether Gaylord's motion for a preliminary injunction should have been granted. Because we conclude that the issue is moot, we dismiss the instant appeal and remand the case to the district court for further proceedings on the issue of damages.

This diversity case involves a breach of a personal service contract between Gaylord, the owner of a New Orleans television station, and Lynn Gansar, one of Gaylord's former news anchorpersons. The contract was entered into by the parties on July 1, 1980, and was extended on three occasions. Despite repeated and apparently good faith negotiations, the parties never reached an agreement concerning a new employment contract, and Gansar's employment with Gaylord ceased as of September 30, 1983.

In pertinent part the contract between Gaylord and Gansar provided:

Acknowledging the substantial expenses that will be incurred by Gaylord in advertising, featuring and promoting Lynn Gansar in the New Orleans area as a news personality and in accord with the provisions of LSA-R.S. 23:921, for the duration of this agreement and also for a period of one (1) year following the dissolution of the Agreement, Lynn Gansar will not appear on any radio station or television station, in the greater New Orleans area other than WVUE-TV without the express written permission of Gaylord.

On or about November 1, 1983, one month after Gansar's employment with Gaylord ended, Gansar entered into negotiations with Cosmos Broadcasting Co., the owner of a New Orleans television station which competed with Gaylord's station, for a position as a news anchorperson. She did not seek from Gaylord the written consent that her contract required. Cosmos and Gansar consummated a personal service contract, and Gansar first appeared on Cosmos' station as a news anchorperson on December 12, 1983.

The next day, December 13, 1983, Gaylord filed this diversity action, seeking injunctive relief and damages. In February of 1984, the district court twice heard oral argument concerning Gaylord's request for a preliminary injunction to enforce the terms of the covenant not to compete. In an opinion rendered from the bench, the district court concluded that Gaylord was likely to prevail on the merits but had not shown the irreparable injury necessary for the injunction to issue. Accordingly, the district court denied Gaylord's motion for preliminary injunction. Gaylord timely appealed to this Court, arguing that the district court erred in concluding that Gaylord needed to demonstrate irreparable injury under Fed.R.Civ.P. 65 for an injunction to issue, since Louisiana law does not require a showing of irreparable injury to enforce the prohibitory aspects of a personal service contract.

This court perceives no need to address the correctness of the district court's denial of Gaylord's request for a preliminary injunction, since under Louisiana law Gaylord's request for injunctive relief is mooted by the terms of the Gaylord/Gansar contract. Assuming Gansar breached the covenant not to compete, Gaylord was entitled to prevent Gansar from working for a competitor for a period of only one year following Gansar's termination of employment. Since Gansar terminated her employment with Gaylord on September 30, 1983, Gaylord's right to enforce specifically the covenant not to compete ceased as of September 30, 1984, one year after Gansar's employment with Gaylord ended.

This was the precise result reached in Louisiana Office Systems, Inc. v. Boudreaux, 298 So.2d 341 (La.Ct.App.1974). In that case a photocopying machine repair company (LOS) sought to enforce a noncompetition clause against a former employee (Boudreaux) who had terminated his employment with LOS and violated the terms of the noncompetition clause. The clause provided that Boudreaux would not engage in any competing business for a period of one year after his employment with LOS terminated. On February 16, 1974, Boudreaux ceased working for LOS, and shortly thereafter he began working for one of LOS's competitors. Seeking to enforce the terms of the noncompetition clause, LOS instituted suit in Louisiana district court. The district court concluded that the noncompetition clause was unenforceable because LOS had not incurred a "substantial expense," within the meaning of La.Rev.Stat.Ann. Sec. 23:921, in the training of the Boudreaux. LOS appealed, and in a decision rendered on July 15, 1974, the Louisiana Court of Appeal reversed. See 298 So.2d 341. The Court of Appeal granted the requested injunction, restraining Boudreaux from engaging in any competitive business until February 16, 1975, one year after his employment with LOS terminated.

Boudreaux petitioned the Supreme Court of Louisiana for a writ of review. The Supreme Court granted the writ on October 28, 1974, reversed the judgment of the Court of Appeal, and remanded the case to the Court of Appeal for its review in light of the...