Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

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Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 38 of 139 court’s ruling on Bell’s Common Stock Purchase Agreement and held that the noncompetition clause in that Agreement was invalid and unenforceable. On March 25, 2008, the Louisiana Fifth Circuit Court of Appeal affirmed the trial court’s decision that Louisiana law applied to the parties’ agreements and that the Texas forum-selection and choice-of-law clauses and the noncompetition and nonsolicitation covenants in the Employment Agreement were unenforceable. Bell v. Rimkus Consulting Group, Inc. of La., 07-996 (La. App. 5 Cir. 3/25/08); 983 So. 2d 927. In holding that Louisiana law applied to the 1996 Employment Agreement despite the Texas choice-of-law clause, the Louisiana Court of Appeal stated: Forum selection clauses will be upheld unless they contravene strong public policy of the forum in which the suit is brought. LA. C.C. art. 3450. LA. R.S. 23:921 A(2), a provision which was added by the legislature in 1999, is an expression of strong Louisiana public policy concerning forum selection clauses. . . . . . . Louisiana law expressly provides that conventional obligations are governed by the law of the state whose policies would be most seriously impaired if its law were not applied to the issue. Further, issues of conventional obligations may be governed by law chosen by the parties, except to the extent that law contravenes the public policy of the state whose law would be applicable under La. C.C. art 3537. As previously stated herein, Louisiana has a longstanding public policy to prohibit or severely restrict non-competition provisions in employment agreements which curtail an employee’s right to [] earn his livelihood. These agreements are in derogation of the common right, and they must be strictly construed against the party seeking their enforcement. Application of Texas law to this dispute would thwart Louisiana’s longstanding public policy and interest in this type 38
Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 39 of 139 of matter. According to well established Louisiana law and jurisprudence, the forum selection and choice of law provisions contained in the 1995 and 1996 employment contracts are null and void. Thus, the agreements in this case are governed by Louisiana law. Id. at pp. 9–10; 983 So.2d at 932–33 (citations omitted). 26 On March 17, 2008, the 26 Article 3540 of the Louisiana Civil Code states: LA. CIV. CODE art. 3540. All other issues of conventional obligations are governed by the law expressly chosen or clearly relied upon by the parties, except to the extent that law contravenes the public policy of the state whose law would otherwise be applicable under Article 3537. Article 3537 of the Louisiana Civil Code states: LA. CIV. CODE art. 3557. Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue. That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other. Section 921(A) of the Louisiana Revised Statutes states: 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. (2) The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other 39
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Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

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