June 21, 2023
Berman Fink Van Horn PC
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In a recent decision, the Georgia Court of Appeals clarified two central issues of the Georgian Restrictive Covenants Act.
- Whether a provision restricting the solicitation, recruitment or hiring of employees of a company must have scope; And
- Whether the power to “amend” a contract allows a court to add terms that do not exist, or whether the courts limit themselves to succinct language that makes the contract too broad.
More specifically, in North American Senior Benefits, LLC v. Wimmer, 2023 WL 3963931 (Ga. App. June 13, 2023), the Georgia Circuit Court of Appeals ruled that hiring and non-hiring agreements require a territory to be enforceable. While this has already been stated by a number of courts, this is the first appellate decision on the subject. Employers should review and revise their restrictive contractual agreements to ensure compliance with the law, otherwise they risk their agreements being unenforceable.
In the same decision, the Court of Appeal noted that courts may “blue pencil” overly broad agreements by deleting offensive language, but may not write in terms where none exist. For example, courts cannot write in a territory where no territory is listed in the agreement. This is also an important clarification of the non-compete clause in Georgia.
We will provide more details on the decision and its implications shortly.
The content of this article is intended to provide a general guide to the topic. Professional advice should be sought as to your specific circumstances.
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