Herff Jones, Inc. v. Nettie Sue Girouard

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-0393

HERFF JONES, INC. AND
GRADUATE SUPPLY, INC.

VERSUS

NETTIE SUE GIROUARD, JAMES RABB,
WARREN RABB AND THE GRAD SHOPPE, INC.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT,
PARISH OF LAFAYETTE, NO. 2006-4331
HONORABLE HERMAN C. CLAUSE, DISTRICT JUDGE

************

JIMMIE C. PETERS
JUDGE

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Court composed of Jimmie C. Peters, Glenn B. Gremillion, and J. David Painter,
Judges.

REVERSED AND REMANDED.

John P. Wolff, III
Tiffany N. Thornton
Keogh, Cox & Wilson, Ltd.
Post Office Box 1151
Baton Rouge, LA 70821
(225) 383-3796
COUNSEL FOR PLAINTIFF/APPELLEE:
Herff Jones, Inc.

John Dale Powers
Neil Mixon

Powers, Hightower & Sellers, L.L.P.
Post Office Box 15948
Baton Rouge, LA 70895
(225) 928-1951
COUNSEL FOR PLAINTIFF/APPELLEE:
Graduate Supply, Inc.

Jean Ouellet
Perrin, Landry, deLaunay, Dartez & Ouellet
Post Office Box 53597
Lafayette, LA 70505-3597
(337) 233-5832
COUNSEL FOR DEFENDANT/APPELLANT:
Nettie Sue Girouard

PETERS, J.

The defendant, Nettie Sue Girouard, appeals the trial court’s grant of a

preliminary injunction prohibiting her from violating contractual covenants not to

compete with the plaintiffs, Herff Jones, Inc. and Graduate Supply, Inc., in their

business. For the following reasons, we reverse the trial court judgment and remand

the matter to the trial court for further proceedings.

DISCUSSION OF THE RECORD

Herff Jones, Inc. (Herff) has, for a number of years, been in the business of

manufacturing and selling graduation class rings, robes, medals, diplomas, caps and

gowns, and similar products to graduates, parents, and schools throughout Louisiana.

In 1993, Ms. Girouard became associated with Herff as an independent

contractor/sales representative. This litigation arises from the specifics of three

agreements entered into between Ms. Girouard and Herff, one in 1993 and the other

two in 2004.

In initially entering into the business relationship with Herff, Ms. Girouard

executed a written contract designated as a “Herff Jones Sales Representative

Agreement” (1993 Agreement), which provided in part that under certain conditions

expressed in the contract, she would not compete with Herff in a specific territory

after terminating the relationship created by the contract. Eleven years later, when

she did terminate the relationship with Herff, she entered into a second contract

entitled “Sales Representative Special Agreement” (2004 Agreement), wherein she

agreed to maintain the noncompetition covenant of the 1993 Agreement, but in a

modified form. Ancillary to that agreement, Ms. Girouard entered into an

employment agreement with Graduate Supply, Inc. (Graduate Supply), a new Herff

affiliate.

Ms. Girouard then maintained the modified relationship with Herff for another

two years. However, in 2006, she terminated her relationship with Herff and

commenced working for The Grad Shoppe, Inc. (The Grad Shoppe). The Grad

Shoppe, which is owned by Warren and James Rabb, is a direct competitor with Herff

and sells and distributes similar products throughout Louisiana. The relationship

between The Grad Shoppe and Ms. Girouard formed the basis of the plaintiffs’ suit

for injunctive relief.

Herff and Graduate Supply filed suit on August 15, 2006, seeking an

injunction and damages for violations of the 1993 and the 2004 agreements not to

compete. In filing suit, they named as defendants Ms. Girourad, The Grad Shoppe,

Warren Rabb, and James Rabb.1 At the October 16, 2006 hearing on the request for

a preliminary injunction, the plaintiffs offered the written contracts to which Ms.

Girouard was a party; the depositions of Ms. Girouard and Kirk Shryoc, Herff’s vice-

president for sales; and the affidavit of Steve Dykes, who works for Graduate Supply.

The defendants countered this offering with affidavits from Ms. Girouard and Warren

Rabb. Considering the record, there exists little dispute regarding the content of the

written agreements at issue.

The 1993 Agreement

Ms. Girouard executed the 1993 Agreement on July 1 of that year. Under its

terms, she became Herff’s sales representative in a territory described in the

1
The petition and amending petitions also pleaded a violation of the Uniform Trade Secrets
Act contained in La.R.S. 51:1341 et seq., a breach of her fiduciary duty by Ms. Girouard, and a
conspiracy to commit an intentional tort of conversion by all defendants. However, there was no
ruling on the demands asserted against the other defendants, nor was there any ruling against Ms.
Girouard on the other grounds asserted in the plaintiffs’ petitions. The only judgment rendered by
the trial court was a preliminary injunction issued against Ms. Girouard on the ground that the
plaintiffs had demonstrated that Ms. Girouard was in violation of the agreements not to compete.
Therefore, the appeal now before us is limited to that issue.

2

agreement as Section B, consisting of all schools in thirteen named parishes as well

as specifically named schools in three additional parishes. The agreement, which was

a standard form agreement prepared and provided by Herff, was clear in establishing

that Ms. Girouard was an independent contractor and not Herff’s employee. In that

regard, it stated that “[n]othing herein shall be construed to ascribe unto [Ms.

Girouard] a status other than that of an independent contractor.” The agreement

provided that Ms. Girouard would be compensated on a commission basis and that

the relationship created was terminable by either party by sixty days’ written notice

to the other party. It further provided that on termination of the agreement by either

party, Herff had the option to buy the business from Ms. Girouard based on a formula

of “Territory Commission Splits” over a period of three years following the date of

termination. Specifically, in exchange for the commission splits envisioned by the

formula, Herff was to receive the goodwill developed by Ms. Girouard through her

sales activities. In order to preserve that goodwill, Ms. Girourad agreed to continue

to render services to Herff which might be necessary for the orderly transfer of her

business, and agreed not to compete with Herff in the business. However, the

agreement also provided that in the event Herff chose not to exercise the option to

purchase, the noncompetition provision would not be applicable.

The covenant not to compete stated the following:

In consideration of Company’s purchase of Representative’s
Business (and the payment of Territory Commission Splits),
Representative covenants that during the period of time Representative
shall receive Territory Commission Splits as set forth above and for a
period of one (1) year thereafter, Representative will not compete,
directly or indirectly (nor receive, in any form, benefit from a competitor
of the Company) in the Territory against Company, any of its sales
representatives, employees or other authorized agents, or any of its
subsidiaries or affiliates. In addition, Representative agrees not to
compete, directly or indirectly, against Company, its sales

3

representatives, employees or other authorized agents, its affiliates or its
subsidiaries by selling, marketing, manufacturing, creating, servicing,
leasing or purchasing Products and /or Related Company Products (or
products that are similar in form or function to such Products and/or
Related Company Products) in the Territory during the period of time
Representative shall receive Territory Commission Splits and for a
period on [sic] one year thereafter. To “compete” as used herein shall
include, among other things, the servicing of accounts, soliciting of sales
from customers, supervision of such sales, the recommendation of
suppliers of Products and/or Related Company Products other than
Company or in any manner contributing to the diminution of Company’s
goodwill with customers.

In July of 2004, Ms. Girouard informed Herff by letter that she would terminate

the contractual relationship in sixty days. In response, Herff informed her that it

intended to exercise its option to purchase her business interest pursuant to the terms

of the 1993 Agreement. This action gave rise to the execution of the 2004

Agreement, which the parties executed on August 2, 2004.

The 2004 Agreement

This two-page document stated that its purpose was to implement Herff’s

option to purchase provided for in the 1993 Agreement. However, despite this

declared purpose, which makes no mention of an employment relationship, and

despite the language of the 1993 Agreement specifically asserting that no

employment relationship had been created between Ms. Girouard and Herff, the

injunction petition filed by the plaintiffs described the 2004 Agreement as follows:

Herff Jones, Inc. and Girouard set forth terms for the sale of the business
as well as terms of their continuing employment relationship.
Specifically, Herff Jones exercised its first right to purchase and
designated Graduate Supply as the replacement representative. In
addition, Girouard and Herff Jones agreed on the following provisions
for her continued employment with Herff Jones:

(Emphasis added).

4

These allegations are incorrect because the 2004 Agreement did not create an

employment relationship. The 2004 Agreement did provide, however, that Ms.

Girouard would comply with any reasonable request for assistance from Herff and its

new sales representative in effecting the transfer of sales and the maintenance of

favorable customer relations. Specifically, she was “to help the new representative/s

become established in the territory.” She agreed to do so through June 30, 2008.

Also, the parties adopted a modified version of the noncompetition covenant of the

1993 Agreement. The modification expanded the period of time the noncompetition

agreement would be in effect, extending it from July 1, 2004 through June 30, 2009.

The 2004 Agreement incorporated Ms. Girouard’s obligation to perform services

pursuant to the commission splits formula found in the 1993 Agreement. With regard

to her compensation under the 2004 Agreement, Ms. Girouard was to receive a

commission split of fifty percent, limited to sales to customers from whom she had

obtained orders during the twelve months preceding the termination date of the 1993

Agreement.

The 2004 Employment Agreement

As previously stated, Graduate Supply is a Herff affiliate. It was incorporated

on August 2, 2004, the same day as the execution of the 2004 Agreement.

Immediately upon its incorporation, it was designated by Herff as its new sales

representative for Ms. Girouard’s territory.

Four days after executing the 2004 Agreement, Ms. Girouard entered into a

written contract with Graduate Supply. The contract was prepared by Herff, was

entitled “Employment Agreement,” was terminable at will, and identified the territory

covered to be “[a]s determined by [Graduate Supply].” With regard to compensation

5

for her services, the Employment Agreement provided that Ms. Girouard would be

compensated at a rate “[a]s determined by [Graduate Supply]” but that the

compensation “may be amended from time to time.” Emphasizing that the duties Ms.

Girouard owed to Graduate Supply would directly benefit Herff, the Employment

Agreement bound Ms. Girouard to do for Graduate Supply exactly what she had

agreed to do for Herff, i.e., help assimilate the new sales representative into the

business. The Employment Agreement contained a noncompetition clause wherein

Ms. Girouard agreed not to compete with Herff or Graduate Supply in the sale of

Herff products “for a period of one year after Employee’s relationship with Sales

Representative is terminated and after Employee ceases selling Herff Jones Products.”

Remaining Evidence

Mr. Shryoc testified that when Herff purchased Ms. Girouard’s business in the

2004 Agreement, the main part of the purchase was goodwill, and that the

simultaneous creation of Graduate Supply as a business entity created a situation

where it was incumbent on all three parties to work together for their mutual benefit.

The other deposition and affidavit testimony establishes that less than two years after

executing the Employment Agreement Ms. Girouard left Graduate Supply and began

working for The Grad Shoppe. In fact, she signed a sales representative contract with

The Grad Shoppe on June 19, 2006.

The trial court heard evidence on the preliminary injunction on October 16,

2006, and thereafter issued the preliminary injunction that is the subject of this

appeal. Relying on the provisions of La.Code Civ.P. art. 3612(B), which provides

that an appeal may be taken as a matter of right from an order or judgment relating

to a preliminary injunction, Ms. Girouard perfected this appeal.

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The only issue before us is whether the preliminary injunction was properly

granted. Ms. Girouard asserts that the trial court erred in granting the preliminary

injunction because the noncompetition language of the 1993 Agreement was null,

void, and unenforceable in that it violated La.R.S. 23:921(C) as that subsection read

at that time. Further, relying on La.R.S. 23:921(B), she contends that because the

noncompetition language in the 2004 Agreement and its ancillary Employment

Agreement related to the sale of the goodwill of her business, it was no longer

enforceable by an injunction under La.R.S. 23:921(B) because two years had elapsed

between the date of the sale and the preliminary injunction hearing on October 16,

2006.

STANDARD OF REVIEW

The issuance of a preliminary injunction will not be disturbed on appeal absent

a clear abuse of discretion. Vartech Sys., Inc. v. Hayden, 05-2499 (La.App. 1 Cir.

12/20/06), 951 So.2d 247. But where the trial court’s decision is based on an

erroneous interpretation or application of law, rather than a valid exercise of

discretion, such an incorrect decision is not entitled to deference by the reviewing

court. Hooper v. Hooper, 06-825 (La.App. 3 Cir. 11/2/06), 941 So.2d 726, writ

denied, 06-2823 (La. 1/26/07), 948 So.2d 177; Kem Search, Inc. v. Sheffield, 434

So.2d 1067 (La.1983). Here, the underlying issues, whether the noncompetition

agreements on which the trial court based its grant of the preliminary injunction were

valid and in effect at the time of the hearing on the motion, are questions of law

which we will review de novo.

OPINION

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A valid noncompetition agreement “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.” La.R.S. 23:921(H).

Additionally, “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.” Id. In determining whether

the obligee has met his burden of proof, the courts will consider the validity and

enforceability of the agreement sought to be enforced. Vartech, 951 So.2d 247.

It is well settled that parties are free to contract except for those instances

where the government places restrictions for reasons of public policy. La. Smoked

Prods., Inc. v. Savoie's Sausage and Food Prods., Inc., 96-1716, 96-1727 (La.

7/1/97), 696 So.2d 1373. The public policy with regard to noncompetition

agreements is set forth in La.R.S. 23:921(A)(1), which states that “[e]very 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.” Thus, there exists a strong public policy disfavoring such

agreements, which is “based upon an underlying state desire to prevent an individual

from contractually depriving himself of the ability to support himself and

consequently becoming a public burden.” SWAT 24 Shreveport Bossier, Inc. v. Bond,

00-1695, p. 5 (La. 6/29/01), 808 So.2d 294, 298. The effect of this longstanding

policy has been to prohibit or severely restrict such agreements. Furthermore,

because such covenants are in derogation of the common right, they must be strictly

construed against the party seeking their enforcement. Id. The rule of strict

construction applies “whether the agreement is in the form of restrictions on

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competition by a former employee, restrictions on competition by the seller of a

business, or some other variation which has the effect of limiting competition.”

Boswell v. Iem, 37,713, p. 5 (La.App. 2 Cir. 10/31/03), 859 So.2d 944, 947.

Despite this longstanding policy, La.R.S. 23:921(B) allows an exception to the

prohibition against noncompetition covenants for the sale of the goodwill of a

business,2 and La.R.S. 23:921(C)3 allows a similar exception in cases involving

employees and independent contractors. Thus, in analyzing the issue before us, we

must first consider if any of these exceptions apply in the three contracts at issue.

In first considering the 1993 Agreement, we note that the agreement clearly

identified Ms. Girouard as an independent contractor. However, the exception in

La.R.S. 23:921(C) relating to independent contractors was added by 1995 La. Acts

No. 937, § 1. In the absence of contrary legislative expression, substantive laws

2
Louisiana Revised Statute 23:921(B) provides (emphasis added):

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.

3
Louisiana Revised Statute 23:921(C) provides (emphasis added):

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.

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apply prospectively only. La.Civ.Code art. 6. Because the 1995 amendment

established a new rule, it is substantive and has prospective application only. See

Sola Commc’ns, Inc. v. Bailey, 03-905 (La.App. 3 Cir. 12/10/03), 861 So.2d 822, writ

denied, 04-107 (La. 3/19/04), 869 So.2d 858. “A contract is an agreement by two or

more parties whereby obligations are created, modified or extinguished.”

La.Civ.Code art. 1906. “Obligations of parties to a contract are fixed at the time the

contract is entered into.” La. Smoked Prods., Inc., 696 So.2d at 1378. Thus, only the

provisions of La.R.S. 23:921 in effect at the time that the agreement was entered into

were applicable in determining whether this agreement was enforceable. Clear

Channel Broad., Inc. v. Brown, 04-133 (La.App. 4 Cir. 3/30/05), 901 So.2d 553.

Therefore, the noncompetition provision of the 1993 Agreement was null and void

when it was entered into because it did not fall within any of the then-existing

exceptions to the prohibition against noncompetition covenants.

Given our conclusion that the noncompetition provision of the 1993 Agreement

was null and void at the time it was entered into, we find that the trial court clearly

abused its discretion in granting the preliminary injunction based on the 1993

Agreement. However, the fact that the noncompetition provision was unenforceable

did not render the 1993 Agreement totally void because it contained a severability

clause. That being the case, we must still consider the effect of the agreement after

severing the noncompetition language. See SWAT 24, 808 So.2d 294. Additionally,

the parties agreed in the 2004 Agreement that:

All provisions of the Sales Representative Agreement between the
parties hereto dated July 1, 1993 and previously executed special
agreements remain in full force and effect except those provisions that

10

are specifically superseded by mutual consent by the Special
Agreement.4

Therefore, the 1993 grant of the option to purchase Ms. Girouard’s business and

goodwill, including the option to enter into a new agreement, was enforceable, was

exercised, and will be given effect.

We turn now to the noncompetition provisions contained in the 2004

Agreement and the Employment Agreement. In determining the validity and

enforceability of the two 2004 noncompetition provisions, we need to identify the two

2004 agreements, then test their efficacy under the strict standards of La.R.S.

23:921(B) and (C).

The record is clear that Herff’s option to purchase related primarily to the

customer goodwill generated by Ms. Girouard during her years of association with

the company, as that basically comprised her entire business. Mr. Shryoc testified

that “a substantial portion of the sale in August 2004 [was] a sale of goodwill” with

the remainder being described as a “transfer of her territory.” We interpret the latter

to be nothing more than the goodwill of her efforts within that territory. It was this

goodwill that Herff in turn conveyed to Graduate Supply.

Goodwill has been recognized in our jurisprudence as an incidental property

right connected with a commercial business and capable of sale and transfer from one

owner to the other. Godwin v. Godwin, 533 So.2d 1009 (La.App. 1 Cir. 1988), writ

denied, 537 So.2d 1165 (La.1989). It has also been defined as the probability that the

customers of the old establishment will continue their patronage. Simpson v.

4
The “previously executed special agreements” mentioned in this quotation were those
confected simultaneously with the 1993 Agreement and are not relevant to the present dispute.
There is no substantial difference between what the 2004 Agreement noncompetition clause sought
to accomplish and the literal application of the 1993 provision. Both sought to bind Ms. Girouard
not to compete for as long as she received Territory Commission Splits and for one year thereafter.

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Restructure Petroleum Mktg. Servs., Inc., 36,508 (La.App. 2 Cir. 10/23/02), 830

So.2d 480. While La.R.S. 23:921(B) provides that the sale of the goodwill of a

business may include a noncompetition clause, the period of noncompetition cannot

“exceed a period of two years from the date of sale.” In the matter before us, the sale

occurred in August of 2004, but the noncompetition term extended through June 30,

2009.

Herff and Graduate Supply assert on appeal that the 2004 Agreement

“explicitly provides that June 30, 2008, is the date of sale” and that the two-year

noncompetition limitation provided for in La.R.S. 23:921(B) did not begin to run

until then. But such a provision cannot be found in the 2004 Agreement either

explicitly or by implication. Additionally, this appears to be a argument presented for

the first time on appeal, as their petition specifically asserts that the sale occurred on

August 2, 2004.5

We find that the assertions of the petition are correct, not the assertion on

appeal. The parties agreed on the thing and the price on August 2, 2004. This court

in Blalock v. Lord, 05-939 (La.App. 3 Cir. 2/1/06), 927 So.2d 1142, writ denied, 06-

1624 (La. 9/26/06), 937 So.2d 847, citing La.Civ.Code art. 2456, pointed out that

Louisiana does not recognize the common law conditional sales contract; rather, once

the parties have agreed on the thing and the price, the sale is complete. Accordingly,

the effective date of the sale was August 2, 2004.

Because the 2004 Agreement was a sale of the goodwill of a business, its

noncompetition provision was governed by La.R.S. 23:921(B). That being the case,

the duration of the noncompetition provision is limited by statute to two years from

5
Admissible evidence at the hearing on an application for a preliminary injunction includes
the verified pleadings. La.Code Civ.P. art. 3609.

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the date of sale, or until August 2, 2006, and the attempt in the 2004 Agreement to

bind Ms. Girouard to noncompetition for a period of nearly five years was void on its

face. Whether or not the covenant in the 2004 Agreement could be or was reformed,

in the circumstances of this case, to a two year limitation is a question we are not

called upon to decide. As we previously stated, the only issue before us on this

appeal is whether the preliminary injunction was properly granted. And even if the

covenant in the 2004 Agreement was valid for two years, it expired on August 2,

2006. Thus, the trial court clearly abused its discretion in granting the preliminary

injunction on the basis of the noncompetition covenant in the 2004 Agreement.

We turn finally to a consideration of the Employment Agreement signed four

days after the 2004 Agreement. It contained a one-year noncompetition agreement,

and by its language Graduate Supply became Ms. Girouard’s nominal employer.

Because La.R.S. 23:921(C) permits an employee to agree to a noncompetition

provision for a period not exceeding two years from the date work is performed under

a written contract, we must consider this agreement in light of that exception.

The noncompetition provision in the 2004 Agreement would have been lifted

on August 2, 2006, two years from the date of sale. However, if we give effect to the

noncompetition clause found in the Employment Agreement, the competition

prohibition would be extended for an additional year, until August 2, 2007. We

decline to give that clause any effect.

As pointed out by the trial court, Herff’s objective in both of the 2004 contracts

was that of “holding on to its clients.” The goodwill purchase from Ms. Girouard by

Herff and her “employment” agreement with Graduate Supply were to effect that

same result. To construe her “employment” agreement as suggested by the plaintiffs

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would create an arrangement that could perpetuate the noncompetition covenant

beyond the statutory limitation of two years, effectively placing Ms. Girouard in a

position of being obligated for some indeterminate period of time under stacked

contractual prohibitions against competition. The petitions, the contracts, the

depositions, the declarations of Herff and Graduate Supply in their briefs, and the

manifest understanding of the trial court and all parties establish that the Employment

Agreement was incidental and ancillary to the sale by Ms. Girouard of her goodwill

and its “orderly transition” to Herff.

When we place the Employment Agreement between Graduate Supply and Ms.

Girouard in its proper perspective vis-a-vis the 2004 Agreement, we see that the

Employment Agreement was not truly a separate contract that would be

independently subject to the duration provisions of La.R.S. 23:921(C). There were

no terms and conditions of actual employment. Ms. Girouard’s compensation came

from Herff, her duties and responsibilities were owed to Herff, and the entire

relationship was under Herff’s guidance and control. The so-called employment was

inseparably coupled with the sale of her business Ms. Girouard and Herff

accomplished through the 2004 Agreement. Herff and Graduate Supply never argued

that there was a genuine employment. In their appellate briefs, relying on the law that

noncompetition covenants in conjunction with the sale of the goodwill of a business

are enforceable, the appellees write that “the various covenants not to compete she

signed were executed in conjunction with the sale of a business.” They assert that

“the covenant not to compete and independent obligations to assist and promote the

business of Herff Jones are ancillary to the sale of Girouard’s business to Herff

Jones.” Their arguments to the trial court and their briefs before us attached no

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significance to the Employment Agreement other than for its repetition of a

noncompetition covenant. Similarly, the trial court in its reasons for judgment

discussed only the 1993 Agreement and the 2004 Agreement, never mentioning the

Employment Agreement as an independent contract containing separate rights and

obligations. The court below and the parties regarded the Employment Agreement

as merely ancillary to the “buyout” of the business by Herff. Even if the stacking of

noncompetition periods could be tolerated under the strict construction rules of

La.R.S. 23:921, that did not occur in this case. The noncompetition provision of the

Employment Agreement was not an enforceable one.

We conclude that whatever obligation Ms. Girouard owed not to compete

terminated on August 2, 2006. The preliminary injunction hearing took place on

October 16, 2006. On that date there was no noncompetition agreement in effect, and

therefore no legal basis for the granting of an injunction. The trial court clearly

abused its discretion in granting the judgment of preliminary injunction.

DISPOSITION

For the foregoing reasons, we reverse and set aside the judgment granting the

preliminary injunction. We remand the matter to the trial court for further

proceedings. We assess all costs of this appeal to Herff Jones, Inc. and Graduate

Supply, Inc.

REVERSED AND REMANDED.

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