{"id":621,"date":"2011-11-11T20:56:48","date_gmt":"2011-11-11T20:56:48","guid":{"rendered":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/"},"modified":"2011-11-11T20:56:48","modified_gmt":"2011-11-11T20:56:48","slug":"georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/","title":{"rendered":"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny"},"content":{"rendered":"<p>In <span>Paragon Technologies, Inc. v. InfoSmart Technologies, Inc.,<\/span> \u2014S.E.2d \u2014, 2011 5382035 (Ga. App. Nov. 9, 2011), the Georgia Court of Appeals confirmed that strict scrutiny applies to restrictive covenants in independent contractor agreements.<\/p>\n<p>InfoSmart Technologies, Inc. (\u201cInfoSmart\u201d) had entered into an independent contractor agreement with Paragon Technologies, Inc. (\u201cParagon\u201d).\u00a0 Under the agreement, InfoSmart agreed to provide employees for staffing in the information technology industry to a specific client of Paragon.\u00a0 The agreement contained a restrictive covenant which stated in pertinent part that \u201cContractor and its employees and agents agree that it will not interfere with Company\u2019s on-going business relationship with its Client and will not accept directly or indirectly an offer to provide further services to that Client \u2026 for a period of twelve (12) months following completion of the project or other termination of the project \u2026\u201d.\u00a0 The agreement was signed in March of 2007 and was therefore governed by the Georgia common law existing prior to Georgia\u2019s new Restrictive Covenants Act taking effect.<\/p>\n<p>InfoSmart accepted the project with Paragon\u2019s client on January 30, 2008 and provided services under the agreement through April 5, 2010.\u00a0 InfoSmart then began providing services directly to the client.\u00a0 Paragon subsequently refused to pay InfoSmart for unpaid invoices for the staffing InfoSmart had provided.<\/p>\n<p>InfoSmart brought suit on the unpaid invoices.\u00a0 Paragon counterclaimed for, among other things, breach of contract based on the restrictive covenant in the agreement.\u00a0 The trial court granted summary judgment to InfoSmart on Paragon\u2019s counterclaim finding that the restrictive covenant was unenforceable.<\/p>\n<p>On appeal, both parties acknowledged that the restrictive covenant would fail strict scrutiny if that standard of scrutiny applied.\u00a0 However, Paragon argued that the covenant should not be subjected to strict scrutiny because it was entered into by two independent corporations with equal bargaining power.\u00a0 That is, it was not between an employer and an employee and therefore lesser scrutiny was appropriate, according to Paragon.<\/p>\n<p>The Georgia Court of Appeals rejected Paragon\u2019s argument, noting that the Georgia Supreme Court has held that restrictive covenants in contracts for services by independent contractors should be treated like restrictive covenants ancillary to employment contracts.\u00a0 The Georgia Court of Appeals therefore found that \u201cbecause the restrictive covenant at issue in this case was included in the independent contractor agreement, it is subject to strict scrutiny.\u201d<\/p>\n<p>As the covenant precluded InfoSmart from accepting unsolicited work, under strict scrutiny it was unreasonable and unenforceable.\u00a0 The Court of Appeals therefore affirmed the grant of summary judgment in InfoSmart\u2019s favor.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In Paragon Technologies, Inc. v. InfoSmart Technologies, Inc., \u2014S.E.2d \u2014, 2011 5382035 (Ga. App. Nov. 9, 2011), the Georgia Court of Appeals confirmed that strict scrutiny applies to restrictive covenants in independent contractor agreements. InfoSmart Technologies, Inc. (\u201cInfoSmart\u201d) had entered into an independent contractor agreement with Paragon Technologies, Inc. (\u201cParagon\u201d).\u00a0 Under the agreement, InfoSmart agreed [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[25,22],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"In Paragon Technologies, Inc. v. InfoSmart Technologies, Inc., \u2014S.E.2d \u2014, 2011 5382035 (Ga. App. Nov. 9, 2011), the Georgia Court of Appeals confirmed that strict scrutiny applies to restrictive covenants in independent contractor agreements. InfoSmart Technologies, Inc. (\u201cInfoSmart\u201d) had entered into an independent contractor agreement with Paragon Technologies, Inc. (\u201cParagon\u201d).\u00a0 Under the agreement, InfoSmart agreed [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/\" \/>\n<meta property=\"og:site_name\" content=\"Berman Fink Van Horn P.C.\" \/>\n<meta property=\"article:published_time\" content=\"2011-11-11T20:56:48+00:00\" \/>\n<meta name=\"author\" content=\"Neal Weinrich\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Neal Weinrich\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/\",\"url\":\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/\",\"name\":\"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.\",\"isPartOf\":{\"@id\":\"https:\/\/www.bfvlaw.com\/#website\"},\"datePublished\":\"2011-11-11T20:56:48+00:00\",\"dateModified\":\"2011-11-11T20:56:48+00:00\",\"author\":{\"@id\":\"https:\/\/www.bfvlaw.com\/#\/schema\/person\/1141d79d36ea2384c3448fa7502738c1\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.bfvlaw.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.bfvlaw.com\/#website\",\"url\":\"https:\/\/www.bfvlaw.com\/\",\"name\":\"Berman Fink Van Horn P.C.\",\"description\":\"A Business Law Firm In Atlanta\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.bfvlaw.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.bfvlaw.com\/#\/schema\/person\/1141d79d36ea2384c3448fa7502738c1\",\"name\":\"Neal Weinrich\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.bfvlaw.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g\",\"caption\":\"Neal Weinrich\"},\"url\":\"https:\/\/www.bfvlaw.com\/author\/neal-weinrich\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/","og_locale":"en_US","og_type":"article","og_title":"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.","og_description":"In Paragon Technologies, Inc. v. InfoSmart Technologies, Inc., \u2014S.E.2d \u2014, 2011 5382035 (Ga. App. Nov. 9, 2011), the Georgia Court of Appeals confirmed that strict scrutiny applies to restrictive covenants in independent contractor agreements. InfoSmart Technologies, Inc. (\u201cInfoSmart\u201d) had entered into an independent contractor agreement with Paragon Technologies, Inc. (\u201cParagon\u201d).\u00a0 Under the agreement, InfoSmart agreed [&hellip;]","og_url":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/","og_site_name":"Berman Fink Van Horn P.C.","article_published_time":"2011-11-11T20:56:48+00:00","author":"Neal Weinrich","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Neal Weinrich","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/","url":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/","name":"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny - Berman Fink Van Horn P.C.","isPartOf":{"@id":"https:\/\/www.bfvlaw.com\/#website"},"datePublished":"2011-11-11T20:56:48+00:00","dateModified":"2011-11-11T20:56:48+00:00","author":{"@id":"https:\/\/www.bfvlaw.com\/#\/schema\/person\/1141d79d36ea2384c3448fa7502738c1"},"breadcrumb":{"@id":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.bfvlaw.com\/georgia-court-of-appeals-confirms-restrictive-covenants-in-independent-contractor-agreements-are-subject-to-strict-scrutiny\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.bfvlaw.com\/"},{"@type":"ListItem","position":2,"name":"Georgia Court of Appeals Confirms Restrictive Covenants in Independent Contractor Agreements are Subject to Strict Scrutiny"}]},{"@type":"WebSite","@id":"https:\/\/www.bfvlaw.com\/#website","url":"https:\/\/www.bfvlaw.com\/","name":"Berman Fink Van Horn P.C.","description":"A Business Law Firm In Atlanta","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.bfvlaw.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.bfvlaw.com\/#\/schema\/person\/1141d79d36ea2384c3448fa7502738c1","name":"Neal Weinrich","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.bfvlaw.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","caption":"Neal Weinrich"},"url":"https:\/\/www.bfvlaw.com\/author\/neal-weinrich\/"}]}},"_links":{"self":[{"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/posts\/621"}],"collection":[{"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/comments?post=621"}],"version-history":[{"count":0,"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/posts\/621\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/media?parent=621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/categories?post=621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bfvlaw.com\/wp-json\/wp\/v2\/tags?post=621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}