KUHN, J.
Plaintiff-appellant, Lance P. Lemoine, appeals the trial court's declaratory judgment, granting a motion for summary judgment filed by defendants-appellees, Baton Rouge Physical Therapy, LLP (BRPT) and BRPT-Lake Rehabilitation Centers, LLC (BRPT-Lake), declaring valid provisions in a partnership agreement, which expressly preclude Lemoine from engaging in his profession providing rehabilitative services and from competing through employment with a competitor for a period of two years in specified parishes; sustaining a peremptory exception objecting on the basis of Lemoine's failure to state a cause of action on his claim for damages as a result of alleged unfair trade practices by BRPT; and finding moot a dilatory exception raising the objection of prematurity. For the reasons that follow, we affirm.
Lemoine is a physical therapist who worked for BRPT for more than 25 years. In 1993, Lemoine became a partner and entered into a partnership agreement with BRPT. As a partner of BRPT, Lemoine was an employee of BRPT-Lake. In January 2012, Lemoine and BRPT ended their relationship.
On June 8, 2012, Lemoine filed this lawsuit for declaratory relief, naming BRPT and BRPT-Lake as defendants. Attached to the petition is a copy of the partnership agreement entered into by the parties on January 1, 2005,
BRPT filed both a peremptory exception raising the objection of no cause of action and, in the alternative, a dilatory exception objecting on the basis of prematurity directed at the LUTPA claim. BRPT-Lake answered the lawsuit. The parties subsequently filed cross motions for summary judgment, averring that as a matter of law each was entitled to relief.
A hearing was held on the exceptions and the cross motions for summary judgment. The trial court denied Lemoine's motion and granted the joint cross motion of BRPT and BRPT-Lake. A judgment issued which specifically found that the non-competition provisions were valid, and that Lemoine was, therefore, precluded from providing rehabilitative services, as defined in the partnership agreement, or engaging in a similar business in the parishes of East Baton Rouge, Ascension, and Livingston for period of two years from the date of termination of his interest in BRPT. In the judgment, the trial court sustained BRPT's exception of no cause of action and denied as moot the exception of prematurity as to Lemoine's LUTPA claim. Lemoine appeals.
La. C.C.P. art. 1871 authorizes the judicial declaration of "rights, status, and other legal relations whether or not further relief is or could be claimed." A declaratory judgment is one which simply establishes the rights of the parties or expresses the opinion of the court on a question of law, without ordering anything to be done, and its distinctive characteristic is that the declaration stands by itself with no executory process following as a matter of course, so that it is distinguished from a direct action in that it does not seek execution or performance from the defendant or the opposing litigants. Appellate courts review a trial court's decision to grant or deny a declaratory judgment using the abuse of discretion standard. Olde Nawlins Cookery, L.L.C. v. Edwards, 2009-1189 (La.App. 1st Cir.5/3/10), 38 So.3d 1012, 1015.
Louisiana has historically had a strong public policy against any employment contract that prohibits an employee from competing with a former employer. See Louisiana Smoked Products, Inc. v. Savoie's Sausage and Food Products, Inc., 96-1716 (La.7/1/97), 696 So.2d 1373, 1379. This policy of restricting non-competition agreements was based on an underlying desire to prevent an individual from contractually depriving himself of the ability to support himself and consequently becoming a public burden. See McAlpine v. McAlpine, 94-1594 (La.9/5/96), 679 So.2d 85, 91. Thus, because such agreements were considered to have been in derogation of the
In SWAT 24, the Louisiana Supreme Court examined the provisions of La. R.S. 23:921, which at the time provided in relevant part:
The SWAT 24 court held that the legislature intended a non-competition agreement restraining an employee from carrying on or engaging in his own business might be valid, provided certain conditions were met; but that conversely, an agreement that restrained an employee from carrying on or engaging in a competing business as the employee of another would not fall within the exception set forth in that subsection and, instead, would be null and void pursuant to Subsection A. 808 So.2d at 306-07.
Without modifying the provisions of Subsection C, by 2003 La. Acts, No. 428, § 1, the legislature added Subsection D to La. R.S. 23:921.
Thus, the SWAT 24 court's holding was legislatively overruled. See Green Clinic, L.L.C. v. Finley, 45,141 (La.App.2d Cir.1/27/10), 30 So.3d 1094, 1098.
By 2010 La. Acts, No. 164, § 1, La. R.S. 23:921A(1) was amended to add a second sentence. The State's present policy is set forth in La. R.S. 23:921, which states:
Over the years, a number of exceptions to La. R.S. 23:921A(1) have been enacted in other subsections of the statute. Today exceptions exist for employer/employee relationships, corporation/shareholder relationships, partnership/partner relationships, and franchise/franchisee relationships. The statute defines the situations under which a non-competition clause may be valid in the context of each of these
Section 9E of the partnership agreement sets forth the non-competition provisions, stating in part:
Thus, as a terminating partner, Lemoine contractually agreed that for a period of two years after his termination, he would not directly or indirectly engage in the business of rehabilitative services as either an employee of or through an equity interest in any entity that engages in rehabilitative services within the specified parishes.
By his participation in the partnership agreement, in Section 3, Lemoine as a partner expressly agreed that the business of BRPT was "the ownership of a 67% membership interest in [BRPT-Lake]," and additionally that BRPT may, among other things:
In Section 4, Lemoine also agreed as a partner that he:
Therefore, by the contractual provisions to which Lemoine agreed to bind himself, a partner of BRPT is contractually defined as "an employee of BRPT-Lake."
Lemoine requested a declaration that as a terminating partner he be permitted to provide outpatient or alternatively home health physical therapy and/or inpatient services at any location he determines, which services fall within the ambit of the
Preliminarily we note that on appeal, the parties have expended much argument over the effect of an application of the provisions of Subsection K of La. R.S. 23:921, which creates an express exception to the general rule of Subsection A insofar as the enforceability of noncompetition agreements in the context of partnerships. But it is the provisions of La. R.S. 23:921 in effect at the time the agreement was executed that are applicable in determining whether a noncompetition agreement is enforceable. Walker v. Louisiana Health Mgmt. Co., 94-1396 (La.App. 1st Cir.12/15/95), 666 So.2d 415, 426, writ denied, 96-0571 (La.4/19/96), 671 So.2d 922. And the version of the partnership agreement the parties have attached to their pleadings was that which was entered into on January 1, 2005, prior to the enactment of Subsection K by 2008 La. Acts, No. 399, § 1, effective August 15, 2008. Thus, because we are bound by the jurisprudence that we apply the version of La. R.S. 23:921 in effect on the date the non-competition provisions were executed, we turn our attention to an application of the provisions of Subsection C, which was enacted by 1990 La. Acts, No. 201, § 1, effective as of September 7, 1990, and the post-SWAT 24 enactment of the provisions of Subsection D by 2003 La. Acts, No. 428, § 1, effective on August 15, 2003.
Lemoine asserts the noncompetition provisions do not fall within the ambit of the exception set forth in La. R.S. 23:921C because he agreed with BRPT, the partnership, rather than BRPT-Lake, whom he describes as his actual "employer." Thus, Lemoine reasons, his consent to not engage directly or indirectly in the business of rehabilitative services was not "with his former employer." We disagree.
As we have already pointed out, Lemoine agreed with the partnership as a partner of BRPT to contractually define himself as "an employee of BRPT-Lake." Thus, his agreement to devote his entire time and attention to rehabilitative services as an employee of BRPT-Lake is a partnership obligation. See La. C.C. art. 2808 (each partner owes the partnership all that he has agreed to contribute to it). In addition to engaging in rehabilitative services, BRPT was the majority interest owner of BRPT-Lake. Although the noncompetition provisions were contained in the partnership agreement, in light of Lemoine's partnership obligation as an employee of BRPT-Lake, through his consent with BRPT — the undisputed majority interest owner of BRPT-Lake — Lemoine
In brief and at oral argument, Lemoine acknowledged that he has no LUTPA claim unless the non-competition agreement is unenforceable. Because we have found the non-competition provisions are enforceable, we find no error in the trial court's actions, sustaining the peremptory exception raising the objection of no cause of action and dismissing as moot the dilatory exception objecting on the basis of prematurity as to Lemoine's LUTPA claim.
For these reasons, the trial court's judgment, denying Lemoine's motion for summary judgment seeking declaratory relief and granting that of BRPT and BRPT-Lake, expressly finding that the non-competition provisions of the BRPT partnership agreement entered into with Lemoine are valid; and dismissing Lemoine's LUTPA claim is affirmed. Appeal costs are assessed against plaintiff-appellant, Lance P. Lemoine, Jr.