December 13, 2018

December 13, 2018

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December 12, 2018

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December 11, 2018

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Georgia Court of Appeals Confirms Non-Solicitation of Employees Covenant Need Not Have Geographic or Material Contact Language

As previously noted, Georgia adopted legislation governing restrictive covenant agreements entered into on or after May 11, 2011. This law, however, does not address employee non-solicitation (i.e., anti-pirating) covenants, leaving courts to apply common law to such restrictions.  Georgia common law can be confusing and even contradictory on certain issues, such as whether an anti-pirating covenant must be limited to a specific geographic territory or to employees with whom the covenanting employee had contact.  The Georgia Court of Appeals for the Fourth Division addressed both issues in a recent decision, CMGRP, Inc. v. Gallant, No. A17A1168 (Ga. Ct. App. Oct. 4, 2017).

Gallant began working for a unit of CMGRP in October 2008.  On October 7, 2008, she executed an employment agreement prohibiting her from “recruiting or hiring any employee of [CMGRP] for a period of one year following her resignation.” Notably, this anti-pirating covenant was not limited to a particular geographic territory or to employees of CMGRP with whom Gallant had any contact or relationship.

The trial court initially rejected the anti-pirating covenant because it was not limited to employees with whom Gallant had established relationships at CMGRP.  The Court of Appeals reversed the trial court’s order, however, based on prior holdings in which it “repeatedly upheld employee non-recruitment provisions that were not limited to employees with whom the former employee had an established relationship.”  Notably, the Court acknowledged a seemingly contradictory decision in which it criticized a non-solicitation covenant for prohibiting the solicitation of employees with whom the employee had no prior contact. The Court explained that the matter at issue in that case was actually a separate non-compete covenant, and its discussion of the non-solicitation covenant was merely “dicta” that “lack[ed] the force of an adjudication.”

In addition to challenging the anti-pirating covenant’s application to employees with whom she had no established relationship, Gallant also argued the pirating covenant was unenforceable because it lacked a geographic territory.  Though she ultimately abandoned that argument, the Court of Appeals found it “worth noting that this Court has upheld employee non-recruitment provisions that lacked a geographic limitation.”

This is a pro-employer decision, as the Court was clear that an anti-pirating covenant need not be limited to a particular geographic territory or to employees with whom the soliciting employee had material contact.  Moreover, because Georgia’s recent restrictive covenant legislation does not apply to anti-pirating covenants, the Gallant decision is instructive in all cases involving such covenants, regardless of the date of the agreement.  Employers should be aware, however, that other courts of appeals in Georgia have issued conflicting holdings, and those courts are not bound by the ruling in Gallant

Jackson Lewis P.C. © 2018

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About this Author

Adriana Scott, Employment Litigation, Jackson Lewis Law Firm
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Adriana R. Midence is a Principal in the Atlanta, Georgia, office of Jackson Lewis P.C. Her practice covers a wide spectrum of employment litigation, including both state and federal claims.

Ms. Midence has handled cases involving claims of race, national origin, age, disability and sex discrimination, as well as sexual harassment, retaliatory discharge, and wage and hour issues. She also has extensive experience drafting and enforcing restrictive covenants for employers in numerous states throughout the United States. She frequently provides advice to...

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Colin Thakkar Non-Competes Unfair Competition attorney Jacksonville, FL  Jackson Lewis law firm
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Colin Thakkar is an Associate in the Jacksonville, Florida, office of Jackson Lewis P.C. Mr. Thakkar represents and counsels small and large businesses on all aspects of employment-related issues.

He has represented employers in federal and state disputes and litigation involving allegations of discrimination, wage and hour claims, ERISA claims, non-compete, non-solicitation, non-disclosure agreements and various employment-related common law claims. Mr. Thakkar also has significant experience representing and advising employers regarding traditional labor law issues, including labor arbitrations, unfair labor practice charges, and the interpretation of collective bargaining agreements.

Mr. Thakkar’s previous practice similarly focused on a broad spectrum of labor and employment matters.

Colin Thakkar is the Knowledge Management (“KM”) Attorney for Jackson Lewis P.C.’s Non-Competes and Protection Against Unfair Competition Practice Group, and is based in the Jacksonville, Florida, office. In his role, Mr. Thakkar serves as a subject-matter expert on restrictive covenant agreements and unfair competition litigation; creates and manages legal and electronic resources and materials to provide innovative client services; serves as a resource for other practice group members; monitors and analyzes regulatory and case law developments; and contributes to the firm’s blogs and legal updates.

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