District courts are divided as to whether there is a private right of action under the Computer Fraud and Abuse Act (CFAA) for persons whose computer service is not interrupted but who nevertheless incur costs (a) responding to a CFAA offense, (b) conducting a damage assessment, or (c) restoring computerized data or programs as they were prior to the offense. … Continue Reading
Notwithstanding a forum-selection provision in the parties’ consulting agreement designating the Northern District of Georgia as the place for litigating non-competition and non-solicitation covenants disputes, a Georgia federal judge transferred covenant violation litigation to the Middle District of Florida. Also, the judge explained why he thought that an arbitration clause was unenforceable, but he said that the Florida court should … Continue Reading
Three years ago last week, Georgia voters overwhelmingly approved a constitutional amendment that substantially altered Georgia’s public policy on restrictive covenants.
Prior to enactment of the amendment, Georgia’s public policy was actively hostile to restrictive covenants in employment agreements — so much so that a provision of the state constitution enshrined the state’s … Continue Reading
Summary. Marguerite and her two daughters were the members and managers of an LLC. On behalf of the LLC, Marguerite negotiated and executed a contract to sell its assets to N&N Holdings. The contract contained a covenant providing that “neither Seller nor its agents” would compete with, or solicit customers or employees of, the buyer during specified periods in a … Continue Reading
Please join us for our sixth trade secrets webinar of the year entitled Trade Secrets and Non-Compete Legislative Update.
The webinar will be September 20, 2012 from noon to 1:00 p.m. central.
The past year has seen significant statutory changes to several jurisdictions’ laws regarding trade secrets and restrictive covenants and pending legislation proposed in additional jurisdictions. As trade secrets … Continue Reading
By Daniel Hart and Bob Stevens
Friday, May 11, 2012 marked the one-year anniversary of Georgia’s new Restrictive Covenant Act ("New Act"). As we have written on this blog before (here and here), passage of the New Act marked a dramatic change in Georgia’s public policy regarding restrictive covenants in employment agreements. Prior to passage of the New … Continue Reading
Thanks to a recent decision of the Georgia Supreme Court, the assignee of confidential and proprietary information has found itself in a Catch 22 dilemma, precluded from suing under the state’s trade secrets statute because the information did not qualify as trade secrets but prohibited by that statute from bringing related common law claims. Robbins v. Supermarket Equipment Sales, LLC, … Continue Reading
As we have discussed on this blog before, on May 11, 2011, Georgia reissued its new Restrictive Covenant Act (the “New Act”). The New Act reflected a fundamental change in Georgia’s law regarding restrictive covenants because it permitted Georgia courts to “blue pencil” (i.e., partially enforce) restrictive covenants that otherwise would be overbroad and, … Continue Reading
By Dan Hart
As we have written on this blog before, on May 11, 2011 Georgia reissued its new Restrictive Covenant Act (“New Act”) in order to resolve concerns about the constitutionality and effectiveness of a nearly identical statute that the state’s legislature had previously enacted in 2009. The 2009 version of the statute was contingent on voters’ approval … Continue Reading
By Dan Hart, Atlanta
Following Georgia Governor Nathan Deal’s signing of House Bill 30 (“H.B. 30”) on May 11, Georgia’s Restrictive Covenant Act is now law, effective immediately. The Governor’s signing of the bill caps months of debate and speculation about the effective date of a nearly identical bill that the Legislature enacted in 2009. That legislation, H.B. 173, … Continue Reading
Aimed at eliminating a potential issue regarding the effective date of the earlier statute and to fix certain drafting anomalies identified after previous passage, Georgia’s Restrictive Covenant Act (version 2011), is now law, as the Governor signed the bill as passed by the House and Senate late this afternoon (May 11, 2011).
The legislature made clear that the impetus … Continue Reading
As we have noted in an earlier blog posting, many have raised questions about the effective date of Georgia’s new Restrictive Covenant Act. The questions derive from inconsistencies in the effective dates between the amendment that gave life to the statute and the statute itself. To cure this potential issue, Rep. Wendell Willard, Vice Chairman of the … Continue Reading
The question has been raised: What is the effective date of Georgia’s new non-compete statute, O.C.G.A. § 13-8-50 et seq.?
The statute provides that it goes into effect on the day after the passage of an enabling Constitutional amendment.
This Act shall become effective on the day following the ratification at the time of the 2010 general election of an amendment to … Continue Reading
What does the new law do? Although the changes are extensive, and the effect of those changes will differ depending on the circumstances, we reviewed the statute when it was passed in 2009 and published an overview in the Georgia Bar Journal. We also published a technology article, focusing on its effects on technology companies.
As we noted … Continue Reading
The law is not retroactive, so it does not affect existing contracts. However, for many businesses who have learned that their agreements are not enforceable under Georgia law as it existed previously, now is the … Continue Reading
On August 19, 2010, the Eleventh Circuit Court of Appeals reversed a district court’s denial of a motion for injunctive relief regarding enforcement of an employer’s non-compete and non-solicitation provisions. Mohr v. Bank of New York Mellon Corp., No. 10-11890, 2010 WL 3273059 (11th Cir. Aug. 19, 2010). Applying Georgia law, the Court found the non-compete agreement to … Continue Reading
The Georgia Court of Appeals issued two decisions in July addressing restrictive covenants in Georgia. In both instances, the Court of Appeals upheld trial court findings that the covenants were unenforceable under existing Georgia law.
In Peachtree Fayette Women’s Specialists, LLC, v. Turner, the Court of Appeals agreed with Superior Court Judge Tommy Hankinson of the Griffin Judicial Circuit that … Continue Reading
Georgia moved one step closer this week to amending its Constitution to allow the General Assembly to enact legislation regarding commercially applicable (non-real estate) restrictive covenants. HR 178 passed out of the House (158 yeas – 12 nays) on Monday, March 22, 2010 and is headed to the Senate. Word is that it is expected to pass without problem. The House … Continue Reading
Because the laws of various states regarding non-compete clauses differ significantly, cases involving these provisions often entail fights at the outset as to the proper venue. The Eastern District of Pennsylvania recently faced just such an issue in CertainTeed Corp. v. Nichiha USA, Inc., Civil Case No. 09-CV-3932-LS, 2009 WL 3540796 (E.D. Pa. Oct. 29, 2009). In that matter, CertainTeed contested with … Continue Reading
A recent trial court decision from Superior Court Judge Tommy Hankinson of the Griffin Judicial Circuit illustrates one of the many difficulties of enforcing a non-compete provision in Georgia. Specifically, the case – Turner v. Peachtree Fayette Women’s Specialists, LLC, Civil Action File No. 2009V-0746, slip op. (2009) – illustrates that when an employer drafts the geographic scope of a non-compete … Continue Reading
In Atlanta Bread Co. Int’l, Inc. v. Lupton-Smith, S08G1815, 2009 WL 1834215 (Ga. Jun. 29, 2009), the Georgia Supreme Court today confirmed that in-term restrictive covenants are subject to the same strict scrutiny standard applied to post-term covenants and the same reasonableness standards of time, territory, and scope.
The question presented in Atlanta Bread Company was whether the in-term … Continue Reading
On April 29, 2009, Governor Sonny Perdue signed HB 173, legislation intended to revamp the way that non-compete, non-solicit and non-disclosure agreements are enforced in Georgia.
On April 1, 2009, the Georgia Senate passed HB 173 on restrictive covenants. The vote tally was 45 in favor and 2 opposed. The legislation will now await Governor Sonny Perdue’s signature.… Continue Reading
In Azzouz v. Prime Pediatrics, P.C., Case No. A08A2340, 2009 WL 619189 (Ga. App. Mar. 12, 2009), the Georgia Court of Appeals upheld a trial court’s grant of an interlocutory injunction on behalf of Prime Pediatrics, P.C. against Dr. Rami Azzouz. Dr. Azzouz entered into a detailed non-competition provision upon the commencement of his employment with Prime. The provision is as follows:… Continue Reading