Recent Georgia Case Upholds Non-Compete and Non-Solicitation Agreements
Non compete clauses or non-solicitation clauses are governed by O.C.G.A. 13-8-50 to 59. Under Georgia law, restrictive covenants in employment agreements are subject to strict scrutiny and will be enforced only if they are reasonable as to the duration, territorial coverage, and scope of activity of the covenant.
In H&R Block v. Morris, No. 09-11184 (11th Cir. 2010), the Eleventh Circuit addressed a dispute between the well-known tax services company and a former employee who allegedly violated the terms of her employment agreement. The employment agreement contained two restrictive covenants--a non-competition clause and non-solicitation clause. A restrictive covenant in an employment contract, whether a non-solicitation covenant or a non-competition covenant, is considered to be in partial restraint of trade and will be enforced only if it (1) is reasonable, (2) is supported by consideration, (3) is reasonably necessary to protect the restraining party’s interest, and (4) does not unduly prejudice the interests of the public.
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