Hey Westlaw Louisiana’s Non-Compete Statute IS DIFFERENT from the Statute on Employer Immunity Background Checks !

Background checks are extremely important in the trucking business. They are regularly at issue in the litigation of cases of negligent hiring. Recently, when reviewing changes in the law regarding employee background checks (LSA R.S. 23:291), I noticed that several cases cited the statute addressing  non-compete agreements. 

For example, Elite Coil Tubing Solutions, LLC v. Guillory 93 So.3d 861, (La. App. 2 Cir. 2012) and Bellard v. Gautreaux 675 F.3d 454 (La App. 5 Cir 2012) referenced the statute giving an employer qualified when  checking  a prospective employee’s background.

I was trying to figure out HOW an immunity statute had anything to do with a non-compete agreement, but I figured out that the citations transposed ONE number. The non-compete statute is LSA R.S. 23:921, while the immunity statute is LSA R.S. 23:291.

I was surprised that there was insufficient proofreading by someone in the appellate courts. Then again, it’s completely understandable to transpose a number, right? Maybe not since there are over 500 cases accurately citing the non-compete statute.
There aren’t as many references to the employer immunity for background statute, but there are some excellent law review articles and the procedure to conduct background checks has been addressed in a few law review articles. So I assumed someone was “cutting and pasting” too much because I noticed the same erroneous citation in the following cases:

  1. Emergency Staffing Solutions, Inc. v. Morehouse Parish Hosp. Service Dist. No. 1 2011 WL 1337371, (W.D.La 2011),
  2. Arthur J. Gallagher & Co. v. Babcock 2011 WL 121891, (E.D.La. 2011),  
  3. Arthur J. Gallagher Risk Management Services, Inc. v. Todd 2010 WL 2179753, (La.App. 3 Cir. 2010)
  4. West Carroll Health System, LLC v. Tilmon  93 So.3rd  1131 (La. App 2 Cir 2012)

To be clear, I make mistakes regularly…er uh…occasionally; however when SIX of the most recent cases dealing with NON-COMPETE agreements referenced the employer immunity statute, something was troubling. Knowing that this could not be accurate, I pulled up the official citation, which costs more to use, for each of these cases and discovered that the statute was accurately cited in the official text, but WESTLAW made a mistake in transposing the numbers in the unofficial overview of the cases and statutes.

Thanks Westlaw, I wasted an hour reviewing the cases that inaccurately referenced the incorrect statute. Westlaw, please make sure you have better proof-reading!

To assist employers and attorneys who want to review the law on properly conducting background checks of prospective employees, the statute is LSA-R.S. 23:291

§ 291. Disclosure of employment related information; presumptions; causes of action; definitions


A. Any employer that, upon request by a prospective employer or a current or former employee, provides accurate information about a current or former employee’s job performance or reasons for separation shall be immune from civil liability and other consequences of such disclosure provided such employer is not acting in bad faith. An employer shall be considered to be acting in bad faith only if it can be shown by a preponderance of the evidence that the information disclosed was knowingly false and deliberately misleading.

B. Any prospective employer who reasonably relies on information pertaining to an employee’s job performance or reasons for separation, disclosed by a former employer, shall be immune from civil liability including liability for negligent hiring, negligent retention, and other causes of action related to the hiring of said employee, based upon such reasonable reliance, unless further investigation, including but not limited to a criminal background check, is required by law.

C. As used in this Section, the following words and phrases shall have the meanings contained herein unless the context clearly requires otherwise:

(1) “Employer” means any person, firm, or corporation, including the state and its political subdivisions, and their agents, that has one or more employees, or individuals performing services under any contract of hire or service, expressed or implied, oral or written.

(2) “Employee” means any person, paid or unpaid, in the service of an employer.

(3) “Prospective employer” means any “employer”, as defined herein, to which a prospective employee has made application, either oral or written, or forwarded a resume or other correspondence expressing an interest in employment.

(4) “Prospective employee” means any person who has made an application, either oral or written, or has sent a resume or other correspondence indicating an interest in employment.

(5) “Job performance” includes, but is not limited to, attendance, attitude, awards, demotions, duties, effort, evaluations, knowledge, skills, promotions, and disciplinary actions.

D. (1) Any employer who has conducted a background check of an employee or prospective employee after having obtained written consent from the employee or prospective employee or at the request of the owner or operator of any facility where the employer performs or may perform all or part of its work shall be immune from civil liability for any and all claims arising out of the disclosure of the background information obtained. This limitation of liability shall extend to all claims of the employee based upon a failure to hire, wrongful termination, and invasion of privacy, as well as all claims of any owner, operator, or any third person for claims of negligent hiring or negligent retention.

(2) The term “background check” shall mean research by any lawful means, including electronic means, into the background of a “prospective employee” or “employee” as defined in Section C of this Subsection, including research into state or federal criminal history repositories, social security status or verification, and research conducted pursuant to the U.S.A. Patriot Act, 31 U.S.C. 5318l, regarding politically exposed persons, including known or suspected terrorists, money launderers, drug kingpins, and persons debarred from conducting business with the United States government, as well as any permissible purposes under the Fair Credit Reporting Act, 15 U.S.C. 1681.

(3) The term “owner” shall mean any person, firm, or legal entity that is engaged in the production of goods or services and who may engage in contractual relations with contractors to perform any type of work on any leased or owned premises of the owner.[i]

To assist employers and attorneys looking for the statutory law on NON-COMPETE agreements in Louisiana, LSA R.S. 23:921 states:

§ 921. Restraint of business prohibited; restraint on forum prohibited; competing business; contracts against engaging in; provisions for

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. However, every contract or agreement, or provision thereof, which meets the exceptions as provided in this Section, shall be enforceable.

(2) The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other person or entity includes a choice of forum clause or choice of law clause in an employee’s contract of employment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clause in any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action.

B. Any person, including a corporation and the individual shareholders of such corporation, who sells the goodwill of a business may agree with the buyer that the seller or other interested party in the transaction, will refrain from carrying on or engaging in a business similar to the business being sold or from soliciting customers of the business being sold within a specified parish or parishes, or municipality or municipalities, or parts thereof, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, not to exceed a period of two years from the date of sale.

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.

E. Upon or in anticipation of a dissolution of the partnership, the partnership and the individual partners, including a corporation and the individual shareholders if the corporation is a partner, may agree that none of the partners will carry on a similar business within the same parish or parishes, or municipality or municipalities, or within specified parts thereof, where the partnership business has been transacted, not to exceed a period of two years from the date of dissolution.

F. (1) Parties to a franchise may agree that:

(a) The franchisor shall refrain from selling, distributing, or granting additional franchises to sell or distribute, within defined geographic territory, those products or services which are the subject of the franchise.

(b) The franchisee shall:

(i) During the term of the franchise, refrain from competing with the franchisor or other franchisees of the franchisor or engaging in any other business similar to that which is the subject of the franchise.

(ii) For a period not to exceed two years following severance of the franchise relationship, refrain from engaging in any other business similar to that which is the subject of the franchise and from competing with or soliciting the customers of the franchisor or other franchisees of the franchisor.

(c) The employee if employed by a franchisor shall:

(i) During the term of his employment by the franchisor, refrain from competing with his employer or any of the franchisees of his employer or engaging in any other business similar to that which is the subject of the franchise.

(ii) For a period not to exceed two years following severance of the employment relationship between the franchisor and the employee, refrain from engaging in any other business similar to that which is the subject of the franchise between the franchisor and its franchisees and from competing with or soliciting the customers of his employer or the franchisees of his employer.

(2) As used in this Subsection:

(a) “Franchise” means any continuing commercial relationship created by any arrangement or arrangements as defined in 16 Code of Federal Regulations 436.2(a).

(b) “Franchisee” means any person who participates in a franchise relationship as a franchisee, partner, shareholder with at least a ten percent interest in the franchisee, executive officer of the franchisee, or a person to whom an interest in a franchise is sold, as defined in 16 Code of Federal Regulations 436.2(d), provided that no person shall be included in this definition unless he has signed an agreement expressly binding him to the provisions thereof.

(c) “Franchisor” means any person who participates in a franchise relationship as a franchisor as defined in 16 Code of Federal Regulations 436.2(c).

G. (1) An employee may at any time enter into an agreement with his employer that, for a period not to exceed two years from the date of the termination of employment, he will refrain from engaging in any work or activity to design, write, modify, or implement any computer program that directly competes with any confidential computer program owned, licensed, or marketed by the employer, and to which the employee had direct access during the term of his employment or services.

(2) As used in this Subsection, “confidential” means that which:

(a) Is not generally known to and not readily ascertainable by other persons.

(b) Is the subject of reasonable efforts under the circumstances to maintain its secrecy.

(3) As used in this Subsection, “computer program” means a plan, routine, or set of statements or instructions, including any subset, subroutine, or portion of instructions, regardless of format or medium, which are capable, when incorporated into a machine-readable medium, of causing a computer to perform a particular task or function or achieve a particular result.

(4) As used in this Subsection, “employee” shall mean any individual, corporation, partnership, or any other entity which contracts or agrees with an employer to perform, provide, or furnish any services to, for, or on behalf of such employer.

H. Any agreement covered by Subsection B, C, E, F, G, J, K, or L of this Section shall be considered an obligation not to do, and failure to perform may entitle the obligee to recover damages for the loss sustained and the profit of which he has been deprived. In addition, 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. Any agreement covered by Subsection J, K, or L of this Section shall be null and void if it is determined that members of the agreement were engaged in ultra vires acts. Nothing in Subsection J, K, or L of this Section shall prohibit the transfer, sale, or purchase of stock or interest in publicly traded entities.

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.

J. A corporation and the individual shareholders of such corporation may agree that such shareholders will refrain from carrying on or engaging in a business similar to that of the corporation and from soliciting customers of the corporation within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the corporation carries on a similar business therein, not to exceed a period of two years from the date such shareholder ceases to be a shareholder of the corporation. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section.

K. A partnership and the individual partners of such partnership may agree that such partners will refrain from carrying on or engaging in a business similar to that of the partnership and from soliciting customers of the partnership within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the partnership carries on a similar business therein, not to exceed a period of two years from the date such partner ceases to be a partner. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section.

L. A limited liability company and the individual members of such limited liability company may agree that such members will refrain from carrying on or engaging in a business similar to that of the limited liability company and from soliciting customers of the limited liability company within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the limited liability company carries on a similar business therein, not to exceed a period of two years from the date such member ceases to be a member. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section.

 #truckingdefense, #westlaw, #hiring, #backgroundcheck, #employer


[i]2014 House Bill 505 seeks to amend the EMPLOYER IMMUNITY statute by adding R.S. 23:291(E)

E.(1) Any employer, general contractor, premises owner, or other third party shall not be subject to a cause of action for negligent hiring of or failing to adequately supervise an employee or independent contractor due to damages or injury caused by that employee or independent contractor solely because that employee or independent contractor has been previously convicted of a criminal offense.

(2) The provisions of Paragraph (1) of this Subsection shall not apply to any of the following:

(a) Acts of the employee arising out of the course and scope of his employment that give rise to damages or injury when the act is substantially related to the nature of the crime for which the employee was convicted and the employer, general contractor, premises owner, or other third party knew or should have known of the conviction.

(b) Acts of an employee who has been previously convicted of any crime of violence as enumerated in R.S. 14:2(B) or any sex offense as enumerated in R.S. 15:541 and the employer, general contractor, premises owner, or other third party knew or should have known of the conviction.

(3) Nothing in this Subsection shall be construed to prohibit or create a cause of action for negligent hiring or inadequate supervision in situations not covered by this Subsection. Furthermore, nothing in this Subsection shall be construed to supplant the immunity from civil liability provided for in R.S. 23:1032 [worker’s compensation immunity statute].

(4) Nothing in this Subsection shall affect the employer’s vicarious liability pursuant to Civil Code Article 2320.
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