Total Articles: 32
Noncompete News: Georgia Court uses Restrictive Covenant Act to Blue Pencil Nonsolicit Agreement
Executive Summary: In one of the first (if not the first) published decision applying Georgia's new Restrictive Covenants Act ("RCA"), the federal district court for the Northern District of Georgia "blue penciled" or modified an otherwise overbroad nonsolicitation of customers provision.
Governor Signs New Georgia Noncompete Law
The Georgia Restrictive Covenants Act (RCA) is finally in effect. O.C.G.A. § 13-8-50, et seq. It has been a long time coming. During the 2009 legislative session, the General Assembly passed H.B. 173, which would significantly change the law of restrictive covenants in Georgia. The effective date of the bill, if at all, was contingent upon the passage of an amendment to the Georgia Constitution authorizing legislation to uphold reasonable restrictive covenants.
Noncompete News: Georgia's Restrictive Covenants Act Effective May 11, 2011
On May 11, 2011, Governor Deal signed into law House Bill 30. House Bill 30 was introduced primarily to clarify when the Restrictive Covenants Act ("RCA") would be effective.
Georgia Governor Signs Restrictive Covenant Law
On May 11, 2011, Georgia Governor Nathan Deal signed into law House Bill 30 (“H.B. 30”), drafted to resolve a debate surrounding the validity and effective date of an earlier law expanding the enforceability of employment-related restrictive covenants. That law, House Bill 173 ("H.B. 173"), provided guidelines for determining the reasonableness of restrictive covenants and established more lenient court review of such covenants by courts. Some of the more significant changes H.B. 73 ushered in included:
Governor Signs New Georgia Noncompete Law
The Georgia Restrictive Covenants Act (RCA) is finally in effect. O.C.G.A. § 13-8-50, et seq. It has been a long time coming. During the 2009 legislative session, the General Assembly passed H.B. 173, which would significantly change the law of restrictive covenants in Georgia. The effective date of the bill, if at all, was contingent upon the passage of an amendment to the Georgia Constitution authorizing legislation to uphold reasonable restrictive covenants.
Georgia Governor Signs New Immigration Law
On May 13, 2011, Georgia Governor Nathan Deal signed The Illegal Immigration Reform and Enforcement Act of 2011. The law, which goes into effect on July 1, 2011, requires public employers to obtain affidavits from contractors (and any subcontractors and sub-subcontractors) stating that they are enrolled in and use E-Verify or, in the case of a contractor, subcontractor, or sub-subcontractor who has no employees and does not intend to hire employees during the term of the contract, to provide a copy of a state-issued driver's license or ID card issued by a U.S. state that verifies lawful immigration status before issuing that document.
Georgia Governor Signs Sweeping Immigration Bill
Fulfilling a campaign promise, Georgia Governor Nathan Deal has signed into law a sweeping immigration bill that will affect companies in Georgia that employ more than 10 full-time employees. The law, HB87, requires companies to register with the federal E-Verify program and check the legal status of new hires. It also creates the offense of “aggravated identity theft” for the use of false information. In addition, it allows the police to question individuals about their immigration status and mandates sanctions for those who harbor or transport undocumented migrants.
Georgia's New Non-Compete Statute – What a Long Strange Trip It's Been
On May 11, 2011, Georgia Governor Nathan Deal signed House Bill 30, Georgia's new restrictive covenants statute. The signing by Governor Deal brings to a close a process that is accurately summarized by the words of the Grateful Dead – "what a long strange trip it's been!"
The Second Time is the Charm: Georgia Governor Signs New Restrictive Covenant Law
Last November, voters in Georgia approved a constitutional amendment to allow a new restrictive covenant law to take effect. There were several uncertainties regarding the enforcement and application of the new law. When the Georgia legislature opened in January 2011, new restrictive covenant legislation was introduced to fix these problems. That legislation was passed by the House and the Senate, and signed by Governor Nathan Deal on May 11, 2011. It governs restrictive covenant agreements signed after that date. An updated summary of the new law follows.
It’s Official! Georgia’s Restrictive Covenant Act Signed by Governor Deal
On May 11, 2011, Governor Deal signed House Bill 30, Georgia’s Restrictive Covenant Act. For those that have been following this issue, you understand “what a long strange trip it’s been.” If you are late to the game, please see prior posts to get up to speed.
Almost There - Georgia’s Restrictive Covenant Act on Governor’s Desk
The enactment of Georgia’s Restrictive Covenant Act is inching closer to a reality. As many have widely observed, the statutory framework that everyone thought was going to be effective after the election in November of 2010 has been clouded with uncertainty because of an effective date issue.
Noncompete News: Uncertainty Remains Regarding Georgia Noncompete Laws
On November 3, 2010, Georgia voters approved a constitutional amendment giving effect to the Georgia Restrictive Covenants Act ("RCA"). What we do know is that the RCA constitutes a monumental change to existing Georgia "noncompete" law. What we do not know is when the RCA will take effect.
One Down, Two to Go – Georgia’s Restrictive Covenant Act Moves Closer to Certainty.
As we have written previously, the enactment of Georgia’s Restrictive Covenant Act has been stained with uncertainty as to its effective date. While Georgia voters overwhelmingly passed a constitutional amendment in November of 2010 which was intended to pave the way for the Act to become effective the day after the election, glitches in the framework of the amendment caused doubt to set in as to whether the Act would be effective on January 1, 2011 – or ever.
Georgia Non-Compete Statute: House of Representatives Aims to End Debate Over Effective Date.
As discussed in an earlier post, the effective date of Georgias recently enacted non-compete legislation is in doubt. Some believe that it was not and never can be effective. Others believe that it was effective as of January 1, 2011, and that it would survive constitutional challenges.
Debate Brewing on Effective Date of Georgia's New Non-Compete Law.
Even though Georgias voter-approved constitutional amendment for a sweeping new restrictive covenant law said it would take effect upon ratification, a debate has been developing in the state over whether that is the effective date. (For more information on the new law, see our article, Georgia Voters Approve New, Employer-Friendly Non-Compete Law.)
Noncompete News: Georgia's New Restrictive Covenants Act.
On November 3, 2010, Georgia voters approved a constitutional amendment giving effect to a restrictive covenant statute passed in 2009. It appears that this statute will become effective on January 1, 2011. The statute, known as the Restrictive Covenants Act ("RCA"), represents a significant change to existing Georgia law. Restrictive covenant agreements entered into prior to January 1, 2011, are controlled by pre-existing Georgia law.
Important Notification Regarding the Effective Date of the New Georgia Restrictive Covenant Statute
Employers should be aware of the following important issue regarding the new Georgia restrictive covenant statute (O.C.G.A. 13-8-50 et seq.). On November 10, 2010, the Chairman of the Georgia House Judiciary Committee published an article in the Fulton County Daily Report recognizing concerns with certain issues surrounding the effective date of this new statute. As noted in our previous Georgia eAuthority, the restrictive covenant statute expressly states that it was to become effective the day following the November 2, 2010 ratification vote and that it was to apply to all restrictive covenant agreements entered into on or after that date. However, since then, issues have been raised regarding the nature of the wording of the House Resolution, the Constitutional Amendment and the Georgia Constitution in regard to the effective date of the constitutional amendment and thus, the statute. As a result, it is possible that this new statute actually will not become effective until January 1, 2011. If this happens, restrictive covenants executed between November 2, 2010 and January 2, 2011 will still be governed by the former common law.
Georgia Voters Approve New, Employer-Friendly Non-Compete Law
This Election Day, joining the majority of states, Georgia became a state where restrictive covenants should be regularly enforced. Voters in Georgia approved a constitutional amendment permitting a new restrictive covenant law to take effect immediately. The new law is a sweeping change for the state. For the first time, Georgia has a law that identifies specific language necessary for enforceability, identifies the types of individuals and entities that can be parties to covenants, allows courts to blue pencil covenants, creates an undue hardship exception to the enforcement of covenants, and removes time restrictions on the protection of confidential information.
Georgia's New Non-Compete Law: Growing Questions Emerge
As noted in an earlier post, in the election on November 2, 2010, Georgia voters overwhelmingly passed a constitutional amendment authorizing a new statutory framework for enforcement of restrictive covenants. But a question has quickly emerged as to when the new law is effective.
Georgia Voters Approve Dramatic Changes To Employment Restrictive Covenant Laws
The long-awaited and often debated results are in! On Tuesday, November 2, 2010, Georgia voters decided (quite convincingly) to amend the Georgia Constitution, which allowed for the previously passed House Bill 173 to become law (now O.C.G.A. 13-8-50, et seq.). This new statute dramatically alters the law as it pertains to employee non-compete, customer non-solicitation, confidential information and similar contractual provisions between Georgia employers and their employees. The new law became effective on November 3, 2010 and as such, is deserving of prompt attention by Georgia employers.
Georgians Vote to Make Restrictive Covenants Easier to Enforce
On November 2, 2010, Georgia voters overwhelmingly ratified an amendment to the state constitution that drastically alters Georgia law concerning agreements restricting the rights of employees to compete with their present and former employers. Before this vote, the enforceability of such agreements, which include agreements not to compete and not to solicit customers, depended upon their strict compliance with complex rules developed by Georgia courts. These rules generally were hostile to restrictive covenants and often rendered them completely unenforceable. Moreover, the rules almost always precluded courts from blue penciling (i.e., modifying) restrictive covenants to be enforceable.
A New Day Dawns For Georgia Non-Compete Law
In a landslide victory with 68% of the votes, the constitutional amendment authorizing a new statutory framework for enforcement of restrictive covenants in Georgia was passed by Georgia voters on November 2, 2010. The new framework goes into effect immediately, but it will only be applied to restrictive covenants that are signed today (November 3, 2010) or hereafter.
Federal Appeals Court Upholds Broad Non-competition Covenant Signed in Sale of a Business in Georgia
While Georgias appellate courts generally disapprove of restrictive covenant agreements, the Eleventh Circuit Court of Appeals has reminded potential business buyers that Georgia courts will enforce broad restrictive covenant agreements when they are entered into ancillary to the sale of a business. Mohr et al. v. BNY Mellon, No. 10-11890 (11th Cir. 2010).
Eleventh Circuit Reaffirms Distinction Between Noncompete Provisions and Nonsolicitation of Customers Provisions in Georgia.
In a recent decision, H&R Block Eastern Enterprises, Inc. v. Morris, the Eleventh Circuit Court of Appeals reversed a trial court's decision holding certain restrictive covenants unenforceable under Georgia law. After H&R Block informed Ms. Morris that she was ineligible for rehire, she started a competitive tax service and began preparing returns for former H&R Block clients that she had serviced. H&R Block sought to enjoin Ms. Morris from violating the noncompete and nonsolicitation provisions of her employment agreement.
Noncompete News: Georgia Supreme Court Reverses Injunction On Unenforceable Noncompete, But Upholds Injunction Based On Trade Secrets Protection.
In this edition of Noncompete News, we remind our readers that Georgia affords companies trade secret protection, even in the absence of an enforceable agreement. Earlier this month, the Georgia Supreme Court addressed an injunction entered against an employee that prohibited him from marketing certain software in competition with his former employer. On appeal, the employee contended that the lower court erred in enforcing the noncompete clause that was contained in a software development agreement into which he entered with his former employer.
Dose of Sugar and Spice: Georgia Court Reminds Businesses How They Can Guard Against Unfair Competition
Georgia law has become somewhat notorious in the area of non-compete, non-solicit, non-recruitment, and confidentiality agreements - generally referred to as restrictive covenants. The nuisances from various court decisions over the years has made Georgia a tough, but not impossible, place to get restrictive covenants enforced.
Noncompete News: HB 173: Potential Sea Change to Georgia's Noncompete Law.
On April 29, 2009, Governor Sonny Perdue signed House Bill 173 (HB 173), to amend Georgia law relating to the enforcement of employment contracts that restrict or prohibit competition. HB 173 becomes effective only if Georgia's voting public passes a corresponding amendment to the Georgia Constitution, allowing for the Georgia legislature to propound the new law.
Noncompete News: No Recovery of Compensation Tied to Unenforceable Noncompete.
In this edition of Noncompete News, we tackle two issues under Georgia law: (a) whether an employer can recover compensation paid to its employee in return for a restrictive covenant that is held to be unenforceable; and (2) whether an employer can recover salary it paid its employee if the employee violates its fiduciary duty or duty of loyalty owed to his employer during his employment. The Georgia Court of Appeals had an opportunity to address both of these issues recently in the insurance brokerage context.
Georgia Court Limits Non-Solicitation Agreements.
A recent decision by the Georgia Court of Appeals concerning restrictive covenant agreements (such as non-compete agreements and non-solicitation of customer agreements), may make enforcement of even recently drafted agreements much more difficult. In light of this decision, it may be wise to consider revising your restrictive covenant agreements which apply to Georgia employees.
Georgia Court of Appeals Reiterates Narrow Scope of Non-Solicitation Clauses.
In a recent opinion, the Georgia Court of Appeals reversed a trial courts decision to uphold the validity of non-solicitation and non-compete clauses in an employment agreement. The appellate courts reversal of the trial court decision was premised on a strict reading of Georgia case law that delineates the permissible scope of non-solicitation clauses.
Georgia Court Rules On Enforceability Of Non-Compete.
The Georgia Court of Appeals recently held that a covenant not to compete included in an employment agreement was unenforceable because it failed to specifically identify the post-employment activities in which the former employee could not engage. The court ruled that another provision of the employment agreement prohibiting the employee from terminating her employment for one year was valid, however, even though the agreement also specified that her employment was at-will. Avion Systems, Inc. v. Thompson, No. A07A1488, Georgia Court of Appeals (July 10, 2007).
Georgia Supreme Court Clarifies Standard for Nonsolicitation of Customers Agreements
The Georgia Supreme Court has held that a nonsolicitation of customers provision in an employment agreement is not required to be limited to solicitation of customers served within a specific period of time before the employee's termination to be enforceable. The Court's decision in this case represents a departure from a line of recent cases that have refused to enforce nonsolicitation of customers provisions unless they are limited for a period of time before termination of employment (for example prohibit the employee from soliciting customers served during the two years preceding termination).
