Protz v. Bock & Clark Corp., Civil Action No: 1:13-cv-1281-JEC, 2013 WL1898142 (N.D. Ga. May 7, 2013), involves the validity of a forum selection clause in an employment agreement containing restrictive covenants. Steven Protz was employed by Bock & Clark. His employment agreement with Bock & Clark contained a broad non-competition covenant. After Mr. Protz was terminated from Bock & Clark and was offered an opportunity with another employer, Mr. Protz filed a lawsuit in the Fulton County Superior Court seeking a declaratory judgment that his non-competition covenant was unenforceable.
Bock & Clark removed the action to federal court. Bock & Clark then filed a motion to dismiss based on a forum selection clause in Mr. Protz’s employment agreement which mandated that any legal action concerning the agreement be brought in the Summit County, Ohio Court of County Pleas. The employment agreement also contained an Ohio choice of law provision.
In responding to Bock & Clark’s motion to dismiss, Mr. Protz primarily relied on Georgia cases holding that Georgia courts will disregard choice of law provisions in agreements containing over broad non-competition covenants. Therefore, according to Mr. Protz, because a Georgia court would not enforce the restrictive covenants, it would contravene Georgia public policy to force him to litigate the action in Ohio. Bock & Clark countered by arguing that Mr. Protz had failed to show that the Ohio court would likely ignore Georgia law in determining whether to enforce the restrictive covenants.
The Court felt that the parties’ briefing on the issue of the enforceability of the forum selection clause was inadequate, stating that the issues “will require more briefing and analysis than plaintiff has thus far presented in his limited brief on this topic.” The Court explained the need for further briefing and why Mr. Protz’s focus on the enforceability of the choice of law provision was not determinative of the validity of the forum selection clause. The Court therefore ordered the parties to provide further briefing on issues such as Ohio’s conflict of law rules and how an Ohio state court would determine which state’s substantive law should apply (i.e., would an Ohio court give deference to the Ohio choice of law provision or would it give deference to Georgia law and its former public policy disfavoring unreasonable covenants in employment contracts?). The Court further guided the parties on the additional issues to address, stating that Mr. Protz should attempt to identify cases that will support his argument that Ohio would ignore the Georgia law disfavoring restrictive covenants and Bock and Clark should “explore the area to support its argument that Ohio would defer to Georgia law in this area.”
Protz thus demonstrates that Georgia state courts and federal courts analyze the enforceability of forum selection clauses in employment agreements containing restrictive covenants somewhat differently. Compare Crump Ins. Servs. v. All Risks, Ltd., 315 Ga. App. 490, 727 S.E.2d 131 (2012) (enforcing forum selection clause where parties had not demonstrated that a Maryland court would enforce the covenants).
Neal Weinrich knows noncompetes and trade secrets inside and out. A shareholder at Berman Fink Van Horn, Neal counsels clients in all industries on matters involving restrictive covenants, trade secrets and other competition-related issues.
