Louisiana Law Precludes Claim for Tortious Interference with Contract Against Employee Who is Not a Corporate Officer
Case: Gulf Engineering Company, LLC v. Allison Kuhn
Louisiana Fourth Circuit Court of Appeal
2016 La. App. LEXIS 2322, 16-425 (La. App. 5th Cir. 12/21/16)
This case involves a claim by Gulf Engineering Company, LLC (“Gulf”) against a Dow Chemical company (“Dow”), employee, Allison Kuhn. Gulf alleged it had a contract with Dow to inspect, verify, track and test equipment at various Dow facilities in Louisiana, including its facility in St. Charles Parish. After the initial term, the contract was renewed on April 1, 2014, for an additional four years. The contract contained provisions for either party to terminate the contract.
Gulf alleged in its Petition that Dow persistently failed to timely or appropriately schedule various third-party contractors needed prior to Gulf’s performance of its duties, causing a significant backlog of required regulatory inspections and testing at Dow’s facilities. Dow assigned its employee, Allison Kuhn, to more efficiently organize the third-party assignments and to address other deficiencies. Gulf alleged, however, that Ms. Kuhn was unable to cure deficiencies but instead began to interfere with Gulf’s relationship with Dow, including dictating Gulf’s relationships with its own employees, allowing third-party contractors to solicit Gulf employees contrary to Dow policy and sharing confidential Gulf information. According to Gulf, Ms. Kuhn’s action impacted Gulf’s ability to perform its contractual obligation and a mere five months after its contract was renewed, the contract was terminated by Dow. Gulf alleged termination of the contract with Dow resulted in loss of revenue and loss of its entire nondestructive testing division. Gulf contended Ms. Kuhn acted with malice and intent to make Gulf's obligations under the contract more burdensome and/or impossible and to induce a breach of the contract.
In response to the suit, Ms. Kuhn filed an exception of no cause of action, alleging that a suit for intentional interference with a contract could only be maintained against a corporate officer or someone who functions in a manner similar to a corporate officer. The trial court sustained her exception but allowed Gulf to amend its Petition. Gulf did so, and in its First Supplemental and Amended Petition alleged that Kuhn was charged with the same duties, authority and responsibility as a corporate officer of Dow, and in the alternative, Kuhn was charged with the same duties, authority and responsibilities of a corporate “official” of Dow as defined in 925 Fashions, Inc. v. Spurney, 538 So.2d 228, 234 (La. 1989), which rendered her position completely indistinguishable from that of a corporate officer of Dow. Gulf further alleged that “wielding the same duties, authority and responsibilities as an officer and/or official of Dow, Kuhn’s actions and omissions cited… constituted a breach of the duties of such an officer and/or official.”
Thereafter, Ms. Kuhn filed a second exception of no cause of action which was also granted by the trial court, and Gulf’s suit was dismissed with prejudice. On appeal, Gulf argued the trial court erred in finding the cause of action for intentional interference with a contract was limited to defendants who are corporate officers and did not extend to defendants who were non-officer corporate “officials.” Gulf also challenged the trial court’s finding that Ms. Kuhn was not a de facto corporate officer.
The appellate court found, citing the Louisiana Supreme Court’s 925 Fashions decision, that although Louisiana law recognized the limited cause of action for tortious interference with contractual relationships, such cause of action applies only to a corporate officer interfering with his employer's contractual relations with third persons. In the case before it, Ms. Kuhn clearly was not a corporate officer of Dow and therefore, on its face, the Petition failed to state a cause of action. These appellate court further distinguished prior cases involving Board Members, who were not otherwise officers of a corporation, where there was a fiduciary duty owed to the corporation, such that the alleged tortious interference with contract would constitute a breach of that duty. In the end, the court declined to extend the cause of action set forth in 925 Fashions to employees, even those in a supervisory capacity, for intentionally interfering with contracts between their employer and a third party.