/>iLast summer, as discussed in this blog, the Georgia Court of Appeals issued a decision in N. Amer. Senior Benefits, LLC v. Wimmer that presented potential challenges for employers seeking to enforce employee non-solicitation provisions.
That case held, pursuant to Georgia’s Restrictive Covenants Act, OCGA § 13-8-50 et seq., that a restrictive covenant extending beyond the end of an individual’s employment, and undertaking to prohibit the individual from soliciting former coworkers, is unenforceable if it lacks an explicit geographic limitation.
In a September 4, 2024 Opinion, the Georgia Supreme Court overruled that decision. The relevant statutory provision in both cases is OCGA § 13-8-53(a), which permits enforcement of restrictive covenants “so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities.” The Supreme Court held that “nothing in the text of subsection (a) mandates that a restrictive covenant contain an explicit geographic term, nor does subsection (a) prohibit a covenant’s geographic area from being expressed in implied terms.”
The Supreme Court continued: “In short, the plain text of subsection (a) requires with respect to geographic restrictions on competition that any such restriction be reasonable, regardless of whether the restriction is expressly stated or implied.” The Court also noted that its reading of OCGA § 13-8-53(a) comports with the Restrictive Covenants Act’s “more permissive and flexible approach to restrictive covenants.”
To be sure, the Georgia Supreme Court’s Opinion is a boon to employers seeking to enforce employee non-solicitation provisions, but it does not mean such provisions are always enforceable. Indeed, in remanding the case to the trial court, the Supreme Court reminded that court of the applicable standard: the geographic scope of employee non-solicitation provisions must be assessed for reasonableness “in light of the totality of the circumstances including, but not limited to, the total geographic area encompassed by the provision, the business interests justifying the restrictive covenant, the nature of the business involved, and the time and scope limitations of the covenant.”
