Employment Law Alert

In October 2014, the Georgia Court of Appeals highlighted two important principles regarding non-compete provisions in employment contracts:  1) reasonableness and 2) blue-penciling.  The case revolved around an employer who filed a claim against a former employee, with the employer arguing that the former employee had breached a non-compete provision that was included in his employment contract with the employer.

Importantly, the Court held that the non-compete provision at issue was unreasonable because the “covenant prohibit[ed] not only solicitation of [the employer’s] former clients, but also the acceptance of business from unsolicited former clients, regardless of who initiated the contact.”  Equally important, the Court ultimately ruled the entire employment contract was void because, at the time the contract was signed, Georgia law required that such a contract be voided, even if only one provision of the contract was deemed unenforceable.  Current Georgia law allows for “blue-penciling” in such situations, whereby a court has the discretion to “blue pencil” or strike an unenforceable provision of an employment contract without voiding the entire contract.

Please contact Madeline S. Wirt or one of our other attorneys if we can help you or your business with employment contracts or general employment issues.

This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.  Case:  Vulcan Steel Structures, Inc. v. McCarty, 764 SE 2d 458 (Ga. App. 2014).