Today, I had the pleasure of attending and speaking at the annual Georgia Restrictive Covenants and Trade Secrets Continuing Legal Education (CLE). Following are some useful pieces of information I learned:
- For better or for worse, there are still no Georgia appellate decisions interpreting Georgia’s Restrictive Covenant Act, which went into effect in 2011. There are a handful of unpublished federal district court opinions applying the Restrictive Covenants Act (RCA). While these cases do not have precedential value, they shed some light on how judges are handling different types of noncompete situations.
- Does the RCA allow blue-penciling? Judicial modification/reformation? We still do not have a definitive answer. Two of the federal district court opinions mentioned above disagree on the scope of courts’ modification authority under the statute.
- When drafting (and litigating) non-competes, don’t forget to evaluate whether the employee who will be subject to the non-compete is an “employee” as defined by the RCA. In a recent decision, Judge Batten concluded that a bakery sales representative was not an “employee” within the meaning of the RCA.
- O.C.G.A. section 9-2-46 is a tool practitioners should remember to utilize when they are involved in multi-jurisdictional litigation over a non-compete. If there is a declaratory judgment action in Georgia and an out-of-state enforcement action, this statute can be used to obtain a quick ruling on the declaratory judgment.
- When you have an employee that leaves your company, quickly engage a forensic expert. A good forensic expert can quickly tell you a tremendous amount of information about your departing employee’s activities leading up to his or her departure.
- In trade secrets cases, consider retaining an industry expert to bolster the claim that the information at issue is trade secret (or if you are representing a defendant, to dispute that the information is a trade secret).
As always, please contact me with any questions.