MOLD—THE NEW TOXIC TORT
The insurance industry is presently assessing the magnitude of the mold problem and the present and future impact of this newest toxic tort. Some say that mold is the next asbestos, while others argue, for a variety of reasons, that while the problem may be serious, it will never reach the level seen in the asbestos litigation.
Once mold is found in a building, a series of events is triggered. First, the owner of the building will look to see who is responsible for the presence of the mold and who should therefore be responsible for its remediation and removal. Possible candidates include the architect, contractor, subcontractors and material vendors. The owner of the building will also look to his first-party property insurance policy to pay for the remediation and repair, while the contractors, etc. will be looking to their liability carriers, or possibly their bonding companies, to fund the costs associated with the removal of the mold.
Removing unsightly mold, however, is only part of the problem. Occupants of a building who have been exposed to the mold may experience both allergic and/or toxigenic effects. This can trigger third-party bodily injury claims by these individuals against both the owner of the building and other parties responsible for its design and construction. On top of this, employees might have claims for worker’s compensation benefits if, in fact, they can demonstrate a disease under the Worker’s Compensation Act related to mold exposure.
There has been a good deal of legal activity in this field in states with humid climates, since there is generally no mold without moisture. Louisiana certainly qualifies in this regard.
Any individual or company who is brought into a mold case should immediately notify its insurers of the problem. In spite of protestations from insurers, it may well be that the asserted claim is covered by either a first party or third party liability policy. Many insurance companies are setting up teams of experts to control mold problems before they become major events. The ability to act proactively with regard to mold will, in all likelihood, prevent it from becoming “the next asbestos.”
Large verdicts have been awarded in some mold cases, and for that reason they should not be taken lightly. While the toxic effects of mold have not been definitely established, there are experts who believe that mold has not only allergic but also toxicological effects which can cause certain types of injuries, making the presence of mold unacceptable and requiring removal and remediation. A cooperative effort among those parties against whom a mold claim is brought will be necessary to minimize the effects of this new legal problem.
HOLIDAY CHEER
In previous years the firm has adopted families in the New Orleans community for Christmas. Items have been purchased ranging from coats to baby dolls, pajamas and slippers, boom boxes and cd players, as well as gift certificates for grocery items to help families provide a Christmas dinner. SPS&R has set aside time this year to purchase, wrap and deliver gifts in time for Christmas. This year the firm will continue with this holiday tradition of giving and has decided to adopt two families. Both are single-parent families with children ranging in age from 4 to 7 years old. The firm will deliver these gifts in time to help spread Christmas cheer to our New Orleans community.
MEETING SPS&R’S AGENDA
The firm is continually working to benefit the lives of Louisiana’s children. This year SPS&R is proud to sponsor the Agenda for Children’s benefit production of Fiddler on the Roof. The event took place December 11, 2001, 8:00PM at the Saenger Theatre.
The Agenda for Children’s mission is to make Louisiana a state in which all children can grow, receive the basic life necessities and be nurtured in a safe and positive environment. This process begins by working with children in the early developmental years and combating racism and oppression.
Agenda for Children works to insure that Louisiana’s government is proactively working to benefit the lives of Louisiana’s youth by keeping track of laws, policies and decisions that affect children. Agenda for Children also works closely with individual children and families, organizations and institutions, service providers and the media to promote the well being of Louisiana’s youth.
For more information about Agenda for Children, please call 504-586-8509.
SPS&R JOINS LAW PROJECT
The firm is proud to participate in this year’s New Orleans Law Project, which is a federally funded worker-training program to place workers in entry-level jobs within area law firms.
Upon completing the on-hands training, and if all requirements are completed by the apprentice, he or she can become a full-time employee of the firm. Apprentices in this program learn general office duties such as filing, copying and using the fax machine, but the project’s goal is to begin a lifetime of learning for these individuals.
Judy Perry Martinez, partner at SPS&R, believes that all area businesses should become involved with worker-training programs such as the New Orleans Law Project. Her hope is that this project will encourage other industries to support work training programs throughout Louisiana.
SPSR offered to apprentice one person for the fall of 2001. Sue Hughes and Ashley Shappard from SPSR’s Special Projects Section are currently working with intern, Faye Braddy. Upon graduation from the program, SPSR has offered Ms. Braddy a full-time position with the firm. It was a unanimous decision within the firm to bring Ms. Braddy on board as an employee.
“Faye has been wonderful to work with, she has a great attitude and the qualities we need in our employees,” said Ms. Hughes. “She wholly dedicates herself to projects and we are really fortunate to have Faye on board.”
SPS&R would like to congratulate Ms. Braddy on her upcoming graduation from Delgado and wish her success with the firm.
SPS&R WELCOMES NEW ASSOCIATE
SPS&R announces the addition of James R. Guidry as a new associate with the firm. A native of New Orleans, Mr. Guidry received his bachelor of arts degree from the University of New Orleans in 1993. He received his Juris Doctor from the Louisiana State University Paul M. Hebert Law Center in 1999. Mr. Guidry practices primarily in the areas of general civil litigation, products liability and toxic tort defense.
Mr. Guidry is admitted to practice in all Louisiana state courts and the United States District Court for the Eastern District of Louisiana.
The knowledge and skills of new associates will help SPS&R continue to provide superior legal services to clients. Welcome aboard, Mr. Guidry.
IS THERE A COMPETITOR LURKING IN YOUR BREAKROOM?
Throughout the last several years, numerous clients have requested advice regarding non-competition agreements. In a non-competition agreement, usually contained in an employment contract, an employee agrees with his or her 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. The justification for such restraints on an employee’s ability to exercise a lawful profession, trade or business is the public interest in protecting business from competitive disadvantage by an employee exploiting skills, knowledge or information acquired while working for the former employer.
Parties to a non-competition agreement must be aware, however, that Louisiana courts consistently recognize that our state has a strong public policy disfavoring non-competition agreements. Louisiana’s policy restricting these types of agreements is based upon an underlying desire to prevent individuals from contractually depriving themselves of the ability to be self-supportive and consequently becoming a public burden. Because non-competition agreements go against the common right to compete in the business arena, courts strictly construe the agreements against employers and in favor of employees, often finding the terms of the agreement too broad or overly vague to prohibit the employee from competing with his or her former employer.
Thus, the question becomes: What makes for a valid and enforceable non-competition agreement?
At the outset, employers must consider the scope of competitive activity statutorily allowed to be curtailed by non-competition agreements. Louisiana Revised Statute 23:921, the state’s non-competition statute, provides that an employee may contractually agree to refrain from “engaging in a business similar to that of the employer.” In the past, a few Louisiana circuit courts broadly interpreted this statutory language to mean that non-competition agreements could preclude former employees from working for businesses in competition with the previous employer. Most recently, however, the Louisiana Supreme Court in SWAT 24 Shreveport Bossier, Inc. v. Bond held that a non-competition agreement, which prohibited employment in any capacity, with any direct or indirect competitor, went beyond what is allowed by Louisiana law, and was thus unenforceable. Nonetheless, the SWAT court noted that a provision prohibiting the employee from engaging in competition by forming his or her own competing business would be valid and enforceable under the Louisiana non-competition statute.
Under the Louisiana Supreme Court’s recent holding, an employee whose non-competition agreement comports with the requirements of the statute may be validly restricted from carrying on or engaging in his or her own competing business and from soliciting customers of the previous employer for his or her own competing business or the business of another. The SWAT decision represents a significant constraint on the employer’s ability to restrain its employees’ participation in post-employment competition. Indeed, the Court’s interpretation of Louisiana’s non-competition statute appears to limit the efficacy of non-competition provisions to those which provide that an employee cannot engage in his or her own competing business, or solicit customers of the employer under any circumstances.
A non-competition clause must specify the geographical limitations on an employee’s ability to compete. The Louisiana circuit courts are split, however, as to how detailed the geographical specification must be. For example, the Third Circuit Court of Appeal in Petroleum Helicopters, Inc. v. Untereker held that a non-competition agreement, which did not specifically identify by name the parishes in which the employee could not compete, was still enforceable because the parishes in which the employer conducted business were identifiable, and the employee was certainly aware of the restricted parishes. Conversely, the First Circuit Court of Appeal recently held in Kimball M.D. v. Anesthesia Specialists of Baton Rouge, Inc. that where a non-competition clause in an employment contract failed to specify the geographical limitations on competition, i.e. where it failed to name or spell out the restricted parishes, the clause was unenforceable. Simply put, some circuit courts look beyond the contract language to ascertain the geographical limitations, while other courts are not willing to read more into the agreement than what is actually spelled out on paper. Therefore, there remains a question of how detailed the geographical specification must be to pass judicial scrutiny.
Under Louisiana Revised Statute 23:921(C), a non-competition clause cannot prohibit competition for a time period longer than two years past termination of employment. Thus, there is no question that a non-competition agreement that restrains an employee from competing with the employer for an indefinite period of time, or for a time period longer than two years past the last date of employment, is unenforceable.
Overall, an employer must be aware that its ability to restrain post-employment competition is highly limited, and a non-competition agreement must be drafted with great precision and care in order that it may serve its intended purpose.
Should you have any questions regarding this issue, please contact your attorney.
COMMUNITY MINDED
Several of the attorneys at SPS&R were recently honored by local non-profit organizations. Judy Perry Martinez was named by the YWCA as a Role Model for 2001 as well as an honoree at a recent luncheon sponsored by the YWCA.
Partner Tom Hamrick was also honored for his work with a New Orleans community organization. He has been elected to the Board of Directors of Save Our Cemeteries, a local preservationist organization whose mission is to preserve the unique cemeteries of New Orleans.
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