Maritech Commercial, Inc. v. Quddus et al

Filing 46

ORDER granting 34 Motion to Dismiss for Failure to State a Claim. Plaintiff's claim is dismissed only insofar as it pertains to the non-compete clause of the employment agreement. Signed by Judge Jay C. Zainey. (jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARITECH COMMERCIAL, INC.

CIVIL ACTION

VERSUS

NO: 13-0613

HASAN QUDDUS AND AI MARINE
SURVEYORS, INC.

SECTION: "A" (2)

ORDER AND REASONS
Before the Court is a Motion to Dismiss (Doc. 34) filed by
Defendants Hasan Quddus and AI Marine Surveyors. Plaintiff MARiTECH
Commercial, Inc. opposes the motion. The motion, scheduled for
submission on April 23, 2014, is before the Court on the briefs
without oral argument.1

For the reasons that follow, the motion is

GRANTED.
I.

Background
This

case

arises

out

of

an

employment

dispute

between

Defendant Hasan Quddus and Plaintiff MARiTECH Commercial, Inc.
June

2007,

Plaintiff

and

Quddus

entered

into

an

In

employment

agreement under which Quddus agreed to work for Plaintiff as a
marine surveyor.

Quddus was employed by Plaintiff until he

voluntarily terminated his employment in August 2012.
On February 19, 2013, Plaintiff filed this lawsuit against

1

The Court notes the parties' request for oral argument, but
determines that it is not necessary in light of the issues
presented.

Quddus and AI Marine Surveyors.

The allegations in Plaintiff's

complaint include the following: (1) Quddus breached the employment
agreement by establishing and working for AI Marine, a competitor
of Plaintiff, during his employment with Plaintiff; (2) Quddus
breached

the

employment

agreement's

non-compete

clause

by

conducting work for AI Marine in Louisiana and Texas within two
years of the termination of his employment with Plaintiff; (3)
Quddus engaged in actions during and after his employment with
Plaintiff that violated the Louisiana Unfair Trade Practices and
Consumer Protection Law.
Defendants have filed the instant motion, in which they assert
that Plaintiff has failed to state a claim relative to Quddus'
breach of the non-compete clause found in the employment agreement.
Defendants argue that the non-compete clause is unenforceable
because it does not comply with Louisiana law.

More specifically,

Defendants argue that the non-compete clause is overly broad by
failing to specify the parishes or municipalities in which Quddus
would be prohibited from competing with Plaintiff.
II.

Discussion
When considering a motion to dismiss under Federal Rule of

Civil Procedure Rule 12(b)(6), the court must accept as true all
well-pleaded facts and must draw all reasonable inferences from

2

those allegations in the plaintiff’s favor.2

In order to survive

a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough
facts to state a claim to relief that is plausible on its face.”3
“Factual allegations must be enough to raise a right to relief
above the speculative level on the assumption that all allegations
in the complaint are true (even if doubtful in fact).”4

Plausible

grounds “simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence” to support the
claim.5

“However,

conclusory

allegations

or

legal

conclusions

masquerading as factual conclusions will not suffice to prevent a
motion to dismiss.”6

Nevertheless, a motion to dismiss under Rule

12(b)(6) is viewed with “disfavor and is rarely granted.”7
The parties agree that Louisiana law governs the provisions of
the

employment

agreement

and

applies

to

this

dispute.

The

Louisiana Supreme Court has recognized a strong public policy

2

Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).

3

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007).

4

Id. at 555. (parenthetical in original) (quotations,
citations, and footnote omitted).
5

Id. at 545.

6

Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284
(5th Cir. 1993).
7

Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 164 (5th
Cir. 1999) (quoting Kaiser Aluminum & Chem. Sales v. Avondale
Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982)).
3

restricting

non-compete

agreements,

which

is

based

upon

"an

underlying state desire to prevent an individual from contractually
depriving

himself

of

the

ability

to

consequently becoming a public burden."8

support

himself

and

Because non-compete

agreements are in derogation of the common right, they must be
strictly construed against the party seeking their enforcement.9
Non-compete agreements are governed by Louisiana Revised
Statute § 23:921, which provides that contracts or agreements
restraining anyone's “lawful profession, trade, or business of any
kind ... shall be null and void” unless one of the enumerated
statutory exceptions applies.10

The relevant exception here is

found at Louisiana Revised Statute § 23:921(C), which provides:
Any person ... 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.11

8

SWAT 24 Shreveport Bossier, Inc. v. Bond, No. 00-1695, pg.
5 (La. 6/29/01); 808 So.2d 294, 298 (citing McAlpine v. McAlpine,
94-1595, pg. 11 (La. 9/5/96), 679 So.2d 85, 91).
9

Id. (citing Hirsh v. Miller, 249 La. 489, 187 So.2d 709,
714 (1966); Turner Professional Services, Ltd. v. Broussard,
99-2838, pg. 3 (La. App. 1 Cir. 5/12/00), 762 So.2d 184, 185).
10

La. Rev. Stat. Ann. § 23:921(A)(1).

11

La. Rev. Stat. Ann. § 23:921(C).
4

The non-compete clause at issue is found in paragraph seven of
the employment agreement, which states the following in pertinent
part:
7. Non-Compete. Should [Quddus], in his discretion,
elect to terminate this Agreement for any reason, and
then he shall not perform duties as a marine cargo
surveyor in Louisiana, Texas, Mississippi, and Florida
for a period of two years from the date this agreement is
terminated.12
The terms of the non-compete clause do not specifically
identify those parishes or municipalities where Plaintiff conducts
business and where Quddus would be prohibited from competing.
Rather, the agreement names generally four different states. These
geographical limitations are overly broad and do not comply with
the requirements of the statute.
Plaintiff argues that the employment agreement's severability
clause allows the Court to strike any unenforceable clauses and
permit the remainder of the agreement to exist.

However, as

Defendants point out, severing the offending provisions of the noncompete clause would eliminate the identities of the states and
leave the clause with no geographical scope. The Court sees no use
of the severability clause that would render the non-compete clause
enforceable.

12

Rec. Doc. 1-1, pg. 7 at ¶ 7.
5

In Team Environmental Services, Inc. v. Addison, the Fifth
Circuit analyzed a non-compete agreement under Louisiana law,
finding that it was overly broad in failing to specify the parishes
to which it applied.13 Regarding the need for such specificity, the
Fifth Circuit reasoned that an employee barred from plying his
trade within an overly expansive territory would be far more
hesitant to leave his job than if the proscription affected a
substantially

smaller

area.14

The

employee's

bargaining

relationship with his current employer would be adversely impacted
as a result.15

Therefore, enforcing overly broad non-compete

agreements, even if only to the extent the law allows, would allow
employers "to routinely present employees with grossly overbroad
covenants not to compete."16
An enforceable non-compete agreement requires a geographic
term which substantially conforms to the statute by identifying
with

reasonable

certainty

those

areas

lawfully may prohibit competition.

in

which

the

employer

As the instant non-compete

agreement does not satisfy this standard, it is unenforceable as a
matter of law.
13

Team Envtl. Servs., Inc. v. Addison, 2 F.3d 124, 127 (5th
Cir. 1993)
14

Id.

15

Id.

16

Id.
6

Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion to Dismiss (Doc. 34) filed by
Defendants

Hasan

Quddus

and

AI

Marine

Surveyors

is

GRANTED.

Plaintiff's claim is dismissed only insofar as it pertains to the
non-compete clause of the employment agreement.
June 12, 2014

JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

7