Non-Compete Agreements in Atlanta, Georgia
It is not uncommon for Georgia employers to include non-compete provisions, also known as covenants not to compete, in employment agreements dealing with such specialized industries as medicine, dentistry, software, engineering and advertising. Non-compete provisions act to restrict an employee’s work upon the termination of employment. Two competing interests must be balanced in considering the reasonableness of non-compete agreements: “first, the employee’s right to earn a living and his ability to determine with certainty the prohibited territory; second, the employer’s interest in customer relationships created or furthered by its former employee on its behalf and its right to protect itself from the former employee’s possible unfair appropriation of contacts developed while working for the employer.” Sysco Food Svcs. v. Chupp, 225 Ga. App. 584, 586 (1) (1997).
Courts looks to three principles when deciding whether a non-compete restriction is reasonable:
1) time duration;
2) territorial coverage; and
3) scope of activity.
There are no hard and fast rules for the three principles, so the validity of a non-compete provision will always comes down to a determination on the facts of each individual case. Courts are generally concerned with how broadly the non-compete provision restricts the employee’s actions. Below are some illustrations of when courts have chosen to enforce and to strike down covenants not to compete.
Reasonable and upheld by court: a non-compete provision where a 13-year shareholder of an accounting company was not allowed to perform “accounting services” in any capacity for two years in seven metro-Atlanta counties: Fulton, DeKalb, Clayton, Gwinnett, Cobb, Fayette and Douglas. (Habif, Arogeti & Wynne, P.C., 231 Ga. App. 289).
Unreasonable and struck down by court: covenant where a software maintenance and support technician was not allowed to provide software services for any product supplied by his former employer anywhere in the United States. (Am. Software United States v. Moore, 264 Ga. 480). In that case, the territorial limitation was found to be too restrictive.
Reasonable and upheld by court: covenant not to compete which restricted a surgeon from practicing medicine or surgery for 2 years in ten counties: Coweta, Fayette, Fulton, Heard, Merriwether, Carroll, Clayton, Spalding, Troup and Pike. However, the surgeon was allowed to continue treating patients from his time with the restrictive employer so long as treatment was not done in the ten specified counties. (McAlpin v. Coweta Fayette Surgical Assocs. P.C., 217 Ga. App. 669).
Keep in mind that the courts in these cases upheld or struck down a covenant not to compete based on the specific facts of the case presented. For a detailed assessment of the enforceability of your restrictive covenant, be sure to meet with an experienced business lawyer.
