{"id":651,"date":"2013-06-21T12:53:03","date_gmt":"2013-06-21T12:53:03","guid":{"rendered":"https:\/\/www.bfvlaw.com\/atlantic-pacific-illustrates-impact-of-georgias-new-restrictive-covenants-law-on-forum-and-venue-selection-considerations\/"},"modified":"2013-06-21T12:53:03","modified_gmt":"2013-06-21T12:53:03","slug":"atlantic-pacific-illustrates-impact-of-georgias-new-restrictive-covenants-law-on-forum-and-venue-selection-considerations","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/atlantic-pacific-illustrates-impact-of-georgias-new-restrictive-covenants-law-on-forum-and-venue-selection-considerations\/","title":{"rendered":"Atlantic Pacific Illustrates Impact of Georgia\u2019s New Restrictive Covenants Law on Forum and Venue Selection Considerations"},"content":{"rendered":"

Under Georgia\u2019s old employee-friendly restrictive covenants law, employees often viewed Georgia courts as a preferred forum.\u00a0 Atlantic Pacific Equipment, Inc. v. William Dale Graham<\/em> illustrates how that tide has shifted.\u00a0 2013 WL 48906 (N.D. Ga., February 8, 2013).<\/p>\n

Defendant William Dale Graham (\u201cGraham\u201d) was an employee of Atlantic Pacific Equipment, Inc. (\u201cAPE\u201d).\u00a0 The parties executed an employment agreement containing restrictive covenants when Graham was hired in 2010.\u00a0 In 2012, APE learned that Graham was considering leaving for another company.\u00a0 To induce Graham to stay, APE offered him a promotion with better pay and asked him to enter into a new restrictive covenant (the \u201c2012 Agreement\u201d).\u00a0 Graham accepted this offer, executed the 2012 Agreement, and remained at APE.\u00a0 The 2012 Agreement specified, among other things, that Georgia law governed and that the State of Georgia would have exclusive jurisdiction over any dispute.\u00a0 Because of when it was signed, the restrictive covenants in the 2012 Agreement, in contrast to the 2010 agreement, were governed by Georgia\u2019s new employer-friendly restrictive covenant statute.<\/p>\n

Approximately one month after executing the 2012 Agreement, Graham resigned from APE.\u00a0 Soon after, APE learned that Graham was soliciting sales from one of APE\u2019s largest customers on behalf of a competitor.\u00a0 Through counsel, APE sent a cease-and-desist letter to Graham\u2019s counsel.\u00a0 In response, two weeks later, Graham filed a complaint seeking a declaratory judgment and a temporary restraining order in state court in Texas.\u00a0 APE removed the action to the United States District Court for the Southern District of Texas and moved to dismiss based on the forum selection clause in the 2012 Agreement.\u00a0 The Southern District of Texas granted APE\u2019s motion to dismiss, concluding that the forum selection clause in the 2012 Agreement required that the case be litigated in Georgia.<\/p>\n

APE filed its own complaint alleging breach of the 2012 Agreement against Graham in the Superior Court of Cobb County, Georgia, and the case was removed to the Northern District of Georgia shortly thereafter.\u00a0 In response to the complaint from APE, Graham moved to dismiss, arguing that APE had failed to allege that Graham was subject to personal jurisdiction in Georgia.\u00a0 Graham argued that the forum selection clause in the 2012 Agreement was invalid and unenforceable and that APE had failed to allege any other grounds on which he could be subjected to personal jurisdiction in Georgia.<\/p>\n

The Northern District of Georgia denied Graham\u2019s motion, finding that the enforceability of the forum selection clause in the 2012 Agreement had already been litigated and decided in the Southern District of Texas.\u00a0 Accordingly, the doctrine of collateral estoppel prohibited Graham from arguing the same point a second time.<\/p>\n

The Northern District of Georgia applied the following standard:<\/p>\n

To claim the benefit of collateral estoppel, the party relying on the doctrine must show that: (1) the issue at stake is identical to the one involved in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the determination of the issue in the prior litigation must have been \u201ca critical and necessary part\u201d of the judgment in the first action; and (4) the party against whom collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue in the prior proceeding.\u00a0 Id.<\/em> at *8.<\/p>\n

The issue decided by of the Southern District of Texas met this standard.\u00a0 The Southern District of Texas had addressed exactly the same issue \u2013 the enforceability of the forum selection clause in the 2012 Agreement was litigated in that prior proceeding and the determination of that issue was a critical and necessary part of the judgment.\u00a0 Finally, Graham had had a full and fair opportunity to litigate on this point in the Southern District of Texas.<\/p>\n

Accordingly, the forum selection clause in the 2012 Agreement was held to be valid and enforceable.\u00a0 Because the complaint in APE\u2019s suit against Graham referred to and attached a copy of the 2012 Agreement, the Northern District of Georgia found that the complaint adequately alleged that Graham was subject to personal jurisdiction in Georgia.<\/p>\n

Atlantic Pacific<\/em> thus illustrates how strategies relating to venue and forum selection in the restrictive covenant context are being materially affected by the change in Georgia law.<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

Under Georgia\u2019s old employee-friendly restrictive covenants law, employees often viewed Georgia courts as a preferred forum.\u00a0 Atlantic Pacific Equipment, Inc. v. William Dale Graham illustrates how that tide has shifted.\u00a0 2013 WL 48906 (N.D. Ga., February 8, 2013). Defendant William Dale Graham (\u201cGraham\u201d) was an employee of Atlantic Pacific Equipment, Inc. (\u201cAPE\u201d).\u00a0 The parties executed […]<\/p>\n","protected":false},"author":3,"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":[27,20,16,22],"acf":[],"yoast_head":"\nAtlantic Pacific Illustrates Impact of Georgia\u2019s New Restrictive Covenants Law on Forum and Venue Selection Considerations - 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\/atlantic-pacific-illustrates-impact-of-georgias-new-restrictive-covenants-law-on-forum-and-venue-selection-considerations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Atlantic Pacific Illustrates Impact of Georgia\u2019s New Restrictive Covenants Law on Forum and Venue Selection Considerations - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"Under Georgia\u2019s old employee-friendly restrictive covenants law, employees often viewed Georgia courts as a preferred forum.\u00a0 Atlantic Pacific Equipment, Inc. v. 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