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:
- Emergency Staffing Solutions, Inc. v. Morehouse Parish Hosp. Service Dist. No. 1 2011 WL 1337371, (W.D.La 2011),
- Arthur J. Gallagher & Co. v. Babcock 2011 WL 121891, (E.D.La. 2011),
- Arthur J. Gallagher Risk Management Services, Inc. v. Todd 2010 WL 2179753, (La.App. 3 Cir. 2010)
- 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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