For many of us, summer vacation is over, the kids are back in school, and it's a good time to take stock of what's left on our to-do list. For Georgia employers who have non-compete agreements with their employees, one of those items should be to review the non-solicitation clauses in their employment contracts.
Earlier this summer, the Georgia Court of Appeals issued a decision in North American Senior Benefits v. Wimmer that will likely make it much harder for employers to enforce non-solicitation agreements. In that case, under Georgia's Restrictive Covenants Act, OCGA § 13-8-50 et seq., it was held that a non-compete agreement that extends beyond the end of an individual's employment and prohibits the individual from soliciting former employees is unenforceable unless it contains an explicit geographic restriction.
The most important statutory provision for the court was OCGA § 13-8-53(a), which allows enforcement of non-compete agreements only “so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities.” The statute provides only two exceptions to the geographic restriction requirement: (a) restrictions on efforts to solicit customers of a former employer (OCGA § 13-8-53(b)) and (b) restrictions on trade secrets (OCGA § 13-8-53(e)). As the court held, the statute “does not provide an exception for restrictions on soliciting employees of a former employer. Thus, it is not within our jurisdiction to create one.”
In light of the Court's decision, Georgia employers should review their non-solicitation clauses in both existing contracts and forms for future contracts. If such provisions do not include geographic restrictions, employers should consider amending the provisions to reflect them. If the contracts do not include a provision allowing for potentially overbroad clauses to be revised to a more enforceable form, that should also be added, as such provisions are applicable under Georgia law. For existing employees, continued employment in Georgia is sufficient consideration for a new or amended employment contract.
