Articles Posted in Business Dispute

For quite some time, courts across the country have expressly disfavored the use of non-compete agreements (“NCA”s). On June 5, 2015, the Louisiana First Circuit Court of Appeal ruled consistently with this sentiment. The court ruled against a company attempting to attain injunctive relief and damages against one of its employees for an alleged violation of an employment agreement.

On August 4, 2008, an employment agreement was signed between a sand and gravel company, Southern Aggregates, LLC (“Southern”), and an employee, Marcus D. Dyess. The contract contained, among other provisions, a non-compete agreement. The NCA, of course, functioned to prevent Dyess from leasing land to other companies/entities for mining purposes (in competition against Southern). Further, the NCA was subject to two limitations: (1) it would run for two years and (2) it would be specific to a geographical area of eighteen listed parishes in Louisiana. In addition to the NCA, the contract included a right of first refusal (“RFR”) to prevent Dyess from entering into business with another party without first making an offer to Southern. The RFR had the same geographical limitations as the NCA, in addition to a five-yeaar term.

Following the execution of the agreement, on February 8, 2010, Dyess left his employment with Southern. At around this point, Southern filed a petition in the court alleging violation of the employment agreement between it and Dyess. Southern alleged that Dyess wrongfully leased property for mining purposes in one of the areas limited by the agreement.  In reaction to this lawsuit Dyess filed a perepmtory exception of no cause action.  In this filing Dyess claimed that the right of first refusal was null and void pursuant to Louisiana Revised Statute 23:921.  23:921 statute says all contracts that restrain a person from competing are null and void unless one of the exceptions applies.  Dyess further argued that none of the exceptions within that statute applied to the contract in dispute.  The trial court agreed with Dyess and an appeal followed.

Arbitration agreements are becoming more and more prevalent in modern business dealings. In theory, arbitration provides a means to quickly, quietly, and fairly remedy disputes between parties, especially when the dispute pertains to a niche field or complex issue. However, as a developing legal remedy, arbitration can still create unexpected outcomes for the parties involved. One such arbitration proceeding, regarding an owner/operator relationship at the Lake Salvador field in Jefferson and St. Charles Parishes, resulted in an award in excess of the original submission of audited damages.

Mack Energy had entered into a contract with ExPert Oil and Gas in order to exercise their mineral rights and drill for oil. Under their agreement, ExPert Oil was to act as an operator, which would oversee the drilling and production of oil while deducting the costs against Mack Energy’s revenue. After a dispute arose over the operations of the field, Mack Energy ordered an audit of ExPert Oil’s operations in which the auditor discovered approximately $1,400,000 dollars in unsubstantiated charges. Pursuant to their original contract, the two parties attempted to settle their dispute through mediation but could not agree on the proper resolution. See La. R.S. 9:4201.  At the end of mediation, Mack Energy submitted an arbitration claim to ExPert which stated that fifty-two unsubstantiated charges remained open to dispute and these charges amounted to $977,598.44. In turn, ExPert acquiesced to the arbitration claim and the parties created a procedural agreement as to how the arbitration would be completed.The arbitrator, an accountant for the Council of Petroleum Accountants Societies, awarded Mack with $1,596,269 instead of the original amount in the arbitration claim. This amount was based on not only the original audit, but employment documents which had been requested fairly late in the arbitration process.

Because of the discrepancy between the amount in the claim and the amount for the award, ExPert sought to have the award vacated. ExPert claimed that the arbitrator had acted beyond his scope of power in considering the employment documents and, in doing so, awarded more than was allowed by his authority. In considering ExPert’s claims, the Supreme Court of Louisiana considered the procedural nature of the arbitration agreement and the amount of deference that should be given to arbitrators. See National Tea Co. v. Richmond, 548 So.2d 930, 932 (La. 1989).

When a person feels wronged, they tend to turn to the judicial system in hopes to find a solution. An important part of making sure an appropriate solution is reached, is that both parties have a chance to plead their case. In a matter involving the sale of a painting, the defendants did not respond to a lawsuit brought against them but were still successful in having a judgment rendered against them annulled.

Amanda Winstead, is the owner Amanda Winstead Fine Art (AWFA), a fine art appraiser, consultant, and a broker. She has been buying and selling paintings from collectors in the New Orleans area since 1996. Stephanie Kenyon, is the president of an auction house located in Maryland, Kenyon & Associates, and Sloans & Kenyon.

In February of 2013, Ms. Winstead purchased an oil painting on canvas after winning the bid she submitted by telephone at an auction held by Sloans & Kenyon. Ms. Winstead forwarded a check to Sloans & Kenyon for the total cost of $21,500.00 via U.S. Priority Mail. The painting was never delivered to Ms. Winstead, and Sloans & Kenyon claimed to have misplaced it somewhere in the auction house.