The Georgia Court of Appeals is on a roll with respect to the Restrictive Covenants Act.\u00a0 After nearly eight years of no decisions on the substance of the statute, the Court has issued a third opinion since October regarding the statute.\u00a0<\/p>\n
In Blair v. Pantera Enterprises Inc<\/em>., 2019 WL 033594 (March 5, 2019), the Court of Appeals tackled one part of the definition of \u201ckey employee\u201d under the statute.<\/p>\n Given that the case involved an injunction to enforce a noncompete against a backhoe operator, it is not surprising that the Court found the employee was not a key employee under the statute and that the trial court\u2019s injunction was therefore improper; however, the Court’s analysis is still instructive for understanding how the courts are applying and interpreting the statute.<\/p>\n Here are some of the key facts from the case:<\/p>\n The former employer filed suit and obtained an injunction prohibiting the employee from operating a backhoe for Norfolk Southern in the relevant territory for the two-year period provided in the noncompete. The employee appealed.<\/p>\n Not surprisingly, the Court of Appeals held that to interpret O.C.G.A. \u00a7 13-8-51(8) (the definition of a \u201ckey employee\u201d) to include this individual \u201cwould create an unintended restriction on trade and run counter to the balance the legislature sought to create by limiting the application of the act<\/em>.”\u00a0 The Court of Appeals also held that the phrase \u201ckey employee\u201d in O.C.G.A. \u00a7 13-8-53(a)(4) \u201cwas not in intended to include every employee<\/em>.\u201d\u00a0<\/p>\n After conducting an analysis of the language of the statute and the intent of the legislature, the Court held that both sentences of O.C.G.A. \u00a7 13-8-51(8) must apply for an employee to be a \u201ckey employee.\u201d\u00a0<\/p>\n The Court specifically found that the legislature’s intent to limit the application of the Act to certain employees would be frustrated if the Court were to construe O.C.G.A. \u00a7 13-8-51(8) to mean that any person defined as an employee pursuant to O.C.G.A. \u00a7 13-8-51(5) as a result of being in possession of selective or specialized skills, learning, or abilities obtained by reason of having worked for an employer is automatically considered a \u201ckey employee.\u201d\u00a0<\/p>\n Applying its analysis of the statute to the specific facts in the case, the Court held that even if the employee was in possession of selective or specialized skills that he obtained by reason of having worked for the former employer, he must also meet the definition in the first sentence of O.C.G.A. \u00a7 13-8-51(8) to qualify as a \u201ckey employee\u201d for purposes of the Act.\u00a0 Thus, the Court held, even if the employee’s good reputation with one customer was sufficient for him to have a \u201chigh level of notoriety, fame, reputation, or public persona as the employer’s representative,” he would be a key employee only if his \u201chigh level of notoriety, fame, reputation, or public persona as the employer\u2019s representative” was gained \u201cby reason of<\/em> \u00a0the employer\u2019s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors, or other business relationships during the course of the employee’s employment with the employer.\u201d O.C.G.A. \u00a7 13-8-51(8).\u00a0<\/p>\n The Court noted that while the employee was Norfolk Southern’s preferred backhoe operator, because of his positive attitude, reliability and proficiency, he gained his good reputation with Norfolk Southern due to his work ethic and personal attributes not by reason of his former employer’s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors or other business relationships during the course of his employment with the employer.\u00a0 Therefore, he was not a \u201ckey employee\u201d as that term is defined in O.C.G.A. \u00a7 13-8-51(8) and the Court held that the trial court erred in issuing injunctive relief to the former employer.<\/p>\n\n