L & B Transport, LLC v. Beech, Civil Action No. 07-146-FJP-CN.

• Decision Date: 22 July 2008
• Docket Number: Civil Action No. 07-146-FJP-CN.
• Citation: 568 F.Supp.2d 689
• Court: U.S. District Court — Middle District of Louisiana
• Parties: L & B TRANSPORT, LLC v. William Ross BEECH.<SMALL><SUP>1</SUP></SMALL>

568 F.Supp.2d 689

L & B TRANSPORT, LLC v. William Ross BEECH.¹

Civil Action No. 07-146-FJP-CN.

United States District Court, M.D. Louisiana.

July 22, 2008.

Alexis A. St. Amant, II, St. Amant & Tessier, Baton Rouge, LA, for L & B Transport, LLC.

Charles A. Cerise, Jr., Janis Van Meerveld, Adams & Reese, New Orleans, LA, for William Ross Beech.

RULING

FRANK J. POLOZOLA, District Judge.

This matter is before the Court on the defendant William Ross Beech's motion for summary judgment.² Plaintiff has filed an opposition to the motion.³ For reasons which follow, defendant's motion for summary judgment is granted.⁴

I. Factual Background

L & B Transport, LLC ("L & B") is a trucking company that handles dry and liquid bulk products with terminals in various locations in the United States. Defendant William Ross Beech ("Beech") was employed by L & B as a dispatcher at L & B's Creola, Alabama terminal from February of 2005 until late February of 2006. Beech's primary responsibility in his position with L & B was coordinating the transportation needs of plaintiffs client, Olin Chemical Corporation ("Olin").

When the defendant was hired, Beech entered into an employment contract with L & B dated February 21, 2005. This agreement included a "best efforts" provision, a confidentiality provision, and a non-compete provision. This agreement was in effect on the date Beech terminated his employment with L & B.

On February 22, 2006, Jerry Busby resigned from L & B. Jerry Busby is Beech's father-in-law and was at the time of his resignation the terminal manager at the L & B Creola, Alabama terminal. The defendant ordered Busby to vacate the L & B premises on February 23, 2006. On the following day, Jody Guillory, Vice President of L & B, drafted new employment agreements adding specific customers to the non-compete provision which was then in effect and presented this new agreement to Beech on February 24, 2006. Beech was given until the end of the day to sign the agreement or terminate his employment with L & B. Beech chose to terminate his employment with L & B and subsequently joined his father-in-law Jerry Busby at Action Resources.

L & B filed suit against Beech on December 1, 2006, alleging that he violated his employment agreement in the following ways: (1) he made plans to leave L & B and work for a competitor trucking company; (2) he recruited other L & B employees to leave L & B and work for a competitor; (3) he took and used confidential proprietary information belonging to L & B to recruit L & B drivers and employees; and (4) he solicited customers of L & B on behalf of his new employer Action Resources in violation of the non-compete provision. L & B seeks damages and injunctive relief in this lawsuit.

Beech denies plaintiffs allegations and contends that L & B's case is based on assumptions and speculations and claims the plaintiff has presented no evidence to support its claims against him. Thus, Beech argues there are no material issues of fact in dispute and his motion for summary judgment should be granted.

The Court now turns to a discussion of the relevant law and its application to the facts of this case.

II. Law and Analysis

A. Summary Judgment Standard

Summary judgment should be granted if the record, taken as a whole, "together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."⁵ The Supreme Court has interpreted the plain language of Rule 56(c) to mandate "the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."⁶ A party moving for summary judgment "must `demonstrate the absence of a genuine issue of material fact,' but need not negate the elements of the nonmovant's case."⁷ If the moving party "fails to meet this initial burden, the motion must be denied, regardless of the nonmovant's response."⁸

If the moving party meets this burden, Rule 56(c) requires the nonmovant to go beyond the pleadings and show by affidavits, depositions, answers to interrogatories, admissions on file, or other admissible evidence that specific facts exist over which there is a genuine issue for trial.⁹ The nonmovant's burden may not be satisfied by conclusory allegations, unsubstantiated assertions, metaphysical doubt as to the facts, or a scintilla of evidence.¹⁰ Factual controversies are to be resolved in favor of the nonmovant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts."¹¹ The Court will not, "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts."¹² Unless there is sufficient evidence for a jury to return a verdict in the nonmovant's favor, there is no genuine issue for trial.¹³

In order to determine whether or not summary judgment should be granted, an examination of the substantive law is essential. Substantive law will identify which facts are material in that "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment."¹⁴ The Court now turns to a discussion of each of plaintiff's claims.

B. L & B Claims Against Beech Also Brought Against Busby & Nelson

The Court finds it unnecessary to repeat the law and analysis in this opinion that was set forth in L & B Transport, LLC v. Jerry Busby¹⁵ since L & B's case against Beech is the weakest among the three cases. Thus, for the same reasons set forth in L & B Transport, LLC v. Jerry Busby, the Court finds that defendant's motion for should be granted.

C. The Non-Compete Agreement between L & B and Beech

Unlike the employment contracts with Busby and Nelson, Beech's employment contract with L & B contained a non-compete clause which provides:

17. NON-COMPLETE (SIC) AGREEMENT: Mr. Beech recognizes that the various items of Information are special and unique assets of L & B and need to be protected from improper disclosure. In consideration of the disclosure of the Information to Mr. Beech, Mr. Beech agrees and covenants that for a period of two years following the termination of this Agreement, whether such termination is voluntary or involuntary, Mr. Beech will not directly or indirectly engage in soliciting any customer of L & B in Alabama for the benefit of a third party that is engaged in such business or be engaged in business as owner, partner or agent. Mr. Beech agrees that this non-compete provision will not adversely affect Mr. Beech's livelihood.

L & B contends Beech violated this clause by soliciting L & B customers on behalf of his new employer Action Resources. However, Beech contends this clause is unenforceable under Louisiana law because it fails to narrowly restrict the geographical limitation of the clause as required by Louisiana Revised Statutes 23:921. The Court agrees. L & B argues that because the employment agreement between it and Beech also contains a severability clause,¹⁶ the Court may reform the non-compete provision to be consistent with Louisiana law.

It is clear that a non-solicitation provision is subject to the same geographical limitation requirement as a non-compete provision.¹⁷ The relevant provisions of Louisiana Revised Statutes 23:921 state:

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.

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.

There is no dispute that Louisiana law governs the employment agreement between Beech and L & B. Louisiana has a strong public policy against covenants not to compete.¹⁸ In fact, "`public policy requires that covenant-not-to-compete agreements "must be strictly construed in the employee's favor."'"¹⁹ "A contract trying to fit into an exception to [the general rule against non-competition agreements] must strictly comply with the requirements contained in the statute."²⁰ Louisiana's approach to non-competition agreements "requires mechanical adherence to the requirements listed in the law (especially the geographical and time limitations)."²¹

Louisiana jurisprudence also requires "a geographic term which substantially conforms" to Louisiana Revised Statutes 23:921 "by identifying with reasonable certainty those areas in which the employer lawfully may prohibit competition."²² Because Section 921 speaks to non-competition "within a specified parish or parishes, municipality or municipalities, or parts thereof, Louisiana courts have stated that non-competition agreements failing to specify the parish, municipality or parts thereof are unenforceable."²³ However, some Louisiana courts in certain exceptional circumstances have held valid a non-competition agreement that did not specify by name...