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 be enforceable, despite the fact that it forbid two employees from working within 50 miles of 27 cities in Georgia and South Carolina and 16 cities in 12 other states. The agreement was signed as part of the sale of a business, a situation that is afforded the most latitude under Georgia restrictive covenant law.
The Court supported its decision by citing mostly other Georgia decisions that involved a single city. The Court did not consider whether the employees had contacts within each of the 43 cities, but rather focused on the Bank’s business territory. Because the agreement was entered into as part of the sale of a business, the Court only considered the employer’s contacts and not the employees’.
The Court held that a preliminary injunction should have been issued to enforce the non-compete because, without the injunction, the Bank would be deprived of the benefit of its bargain in buying the business.
The Court’s decision indicates a new willingness to enforce a geographically expansive non-compete under Georgia law. The effect of this decision on future litigation is unknown, but will certainly be interesting to watch.