The Georgia Court of Appeals recently limited Georgia employers' ability to enforce employee non-solicitation agreements. In North American Senior Benefits, LLC v. Wimmer, No. A23A0162, 2023 WL 3963931 (Ga. Ct. App. June 13, 2023), the Court held that employee non-solicitation provisions must include a geographic limitation to be enforceable. Of course, many (if not most) such provisions prohibit the solicitation of any employees; they rarely limit themselves to particular lines on a map.
The Court held that the requirements outlined in Georgia's Restrictive Covenants Act (RCA), which requires any restriction to be reasonable in time, geographic area, and scope of prohibited activities, apply to restrictive covenants that prohibit solicitation of employees. Although the Court recognized that Georgia law does carve out certain exceptions for post-employment restrictive covenants that prohibit solicitation of an employer's customers and trade secrets, it held that these carve-outs do not apply to employee non-solicitation agreements. Importantly, the Court also declined the invitation to "blue-pencil" or modify the restrictive covenant to cure the lack of a geographic limitation. Rather, it affirmed the lower court's holding that such an approach would "add a material term instead of simply narrowing or severing impermissible language or terms."
Although it is possible that the Georgia Supreme Court could overrule this decision or that the Georgia Legislature will amend the RCA to address the issue identified in Wimmer, unless and until that occurs, employers with a presence in Georgia should ensure that all new employment agreements with employee non-solicitation agreements have both a reasonable time and geographic limitation. Given the uncertainty, Georgia employers should also consider revising their existing non-solicitation of employee provisions to include appropriate geographic limitations.
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