[ad_1]
Previous to the enactment of Georgia’s Restrictive Covenant Act (“RCA”) in Could 2011, Georgia courts uniformly held void and unenforceable “in any capability” non-compete provisions within the employer-employee context. “In any capability” non-competes are these provisions that prohibit an worker from working for a competitor in any capability and never restricted to the kinds of duties that the worker carried out for his present employer. And below Georgia’s prior frequent legislation, a courtroom was not allowed to revise an in any other case void and unenforceable provision to render it enforceable.
Beneath the RCA, nevertheless, the courtroom is expressly allowed — however not required — to “modify” an overbroad non-compete to render it enforceable. There have been some circumstances because the enactment of the RCA which have tried to outline what “modify” means below the RCA.
With this backdrop, in mid-December 2022, in Amspec, LLC v. Calhoun et al, a federal courtroom within the Southern District of Georgia addressed a non-compete provision which acknowledged, amongst different issues, that the worker couldn’t, “as an worker, employer, proprietor, operator …” work for “an entity engaged in the identical or comparable enterprise as AmSpec …” the place he “contribute[d] his data” to that aggressive firm.
After a prolonged dialogue of what “contributing his data” meant, the courtroom moved to “the janitor rule,” i.e., the worker’s argument that the supply, as drafted, prohibits the worker “from working in any capability [for a competitor] … even when the work is just not aggressive with [Amspec’s] enterprise – together with, for instance, working as a secretary or janitor.” The courtroom agreed that it was an “in any capability” non-compete.
Counting on a 2022 Georgia Court docket of Appeals choice, Burbach v. Motorsports of Conyers, LLC, the AmSpec courtroom then held that “in any capability” non-compete provisions are void and unenforceable. The courtroom then exercised its discretion to say no to switch the settlement to make it enforceable. In doing so, it reasoned that AmSpec didn’t supply a extra slender interpretation of the non-compete that would cut it to ban the worker from performing comparable providers to these he carried out on behalf of AmSpec and, thus, it could not supply extra slender language for Amspec.
It’s value noting that the Burbach courtroom (on which the Amspec courtroom relied), in reaching its choice, adhered to Georgia frequent legislation that preceded the RCA’s enactment. Additionally it is value noting that on December 20, 2022, the Georgia Supreme Court docket agreed to listen to an enchantment of the Burbach choice.
Backside Line: Beneath Amspec and Burbach – not less than whereas it’s being appealed – corporations could be sensible to overview their Georgia restrictive covenant agreements and be sure that any non-compete provisions include, amongst different issues, a limitation on the kinds of duties that an worker is prohibited from acting on behalf of a competitor.
[ad_2]
Source link
