canada africa partner reservation Validity of non-solicitation agreements for employees in Georgia

Validity of non-solicitation agreements for employees in Georgia

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Validity of non-solicitation agreements for employees in Georgia

For many of us, the summer holidays are over, the kids are back to school and it’s a good time to take stock of the slow things on our to-do list. For employers who have restrictive contractual agreements with employees in Georgia, one of these tasks should be to review the employee non-solicitation provisions in their employment contracts.

Earlier this summer, the Georgia Court of Appeals ruled in North American Senior Benefits v. In this case, under Georgia’s Restrictive Covenants Act, OCGA § 13-8-50 et seq., it was held that a restrictive covenant extends beyond the termination of an individual’s employment and requires the individual to prohibit the individual from recruiting former colleagues is unenforceable absent an explicit geographic restriction.

The key statutory provision before the court was OCGA § 13-8-53(a), which permits the enforcement of restrictive covenants only “so long as such restrictions are reasonable in time, geography, and the scope of the prohibited activities.” The law provides only two exceptions to the geographic restriction requirement: (a) restrictions on efforts to solicit customers from a former employer (OCGA § 13-8-53(b)) and (b) on trade secrets (OCGA § 13 -8- 53(e)). As the court noted, the law “does not provide an exception for restricting the hiring of employees of a former employer.” So it is not within our authority to create one.”

In light of the Court’s ruling, employers operating in Georgia should review their employee non-solicitation provisions, both in existing agreements and in forms for future agreements. If such provisions do not include geographic restrictions, employers should consider amending the provisions to include them. To the extent that the agreements do not contain a provision allowing potentially overbroad clauses to be converted into a more enforceable form, this should also be added, as such provisions are enforceable under Georgian law. For existing employees, continued employment in Georgia is sufficient consideration for a new or amended employment contract.