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To protect their businesses, employers often seek to contractually prohibit employees from soliciting customers after employment ends.  Georgia's appellate courts have long frowned upon covenants in employment agreements that purport to restrict competition. 

In striking a customer non-solicitation provision in an employment agreement because it prohibits a former employee from “merely accepting business, without solicitation,” the Georgia Court of Appeals in Fine v. Communication Trends, Inc., 2010 Ga. App. LEXIS 711 (2010), continues to adopt this stance.  Restrictive covenants in employment agreements must be carefully and narrowly drafted to remain enforceable in Georgia.

Current Law

A customer non-solicitation covenant is unenforceable if it prohibits the mere acceptance of business. “While a prohibition involving some affirmative act on the part of the former employee, such as solicitation, diversion, or contact of clients, may be reasonable, a covenant prohibiting a former employee from merely accepting business, without any solicitation, is not reasonable.” Waldeck v. Curtis 1000, Inc., 261 Ga. App. 590, 592 (2003).

Provision Struck

The non-solicitation covenant in Fine between Communication Trends, Inc. (“CTI”) and its former employee provided, in pertinent part:

4. Nonsolicitation of Clients. The Employee hereby also agrees and covenants with [CTI] that throughout the period of his employment and for a period of two (2) years immediately following cessation of Employee’s employment with [CTI], the Employee shall not solicit advertising media placement business similar to [CTI] on behalf of any persons or entity other than [CTI], either directly or indirectly, whether as a shareholder, partner, joint venturer, consultant, employee, officer, agent or otherwise, from any person or entity (or otherwise contact, call upon, communicate with or attempt to communicate with any such person or entity with a view to providing advertising media placement services competitive or potentially competitive with [CTI][.])

Emphasis supplied.

This provision, on its face, does not prohibit the mere acceptance of business.  The Court of Appeals, however, construed the italicized language as prohibiting the former employee from “otherwise” communicating with former clients to accept business not solicited by the former employee and regardless of who initiated contact.  Thus, the Court held this covenant void and unenforceable.

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Jackson Lewis

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