Are non-compete agreements enforceable against former employees in Georgia?

§ 13-8-53. Enforcement of covenants; writing requirement; determining competitive status; effect of failure to comply; time and geographic limitations

(a) Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted. However, enforcement of contracts that restrict competition after the term of employment, as distinguished from a customer nonsolicitation provision, as described in subsection (b) of this Code section, or a nondisclosure of confidential information provision, as described in subsection (e) of this Code section, shall not be permitted against any employee who does not, in the course of his or her employment:

(1) Customarily and regularly solicit for the employer customers or prospective customers;

(2) Customarily and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others;

(3) Perform the following duties:

(A) Have a primary duty of managing the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;

(B) Customarily and regularly direct the work of two or more other employees; and

(C) Have the authority to hire or fire other employees or have particular weight given to suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or

(4) Perform the duties of a key employee or of a professional.

(b) Notwithstanding any other provision of this chapter, an employee may agree in writing for the benefit of an employer to refrain, for a stated period of time following termination, from soliciting, or attempting to solicit, directly or by assisting others, any business from any of such employer's customers, including actively seeking prospective customers, with whom the employee had material contact during his or her employment for purposes of providing products or services that are competitive with those provided by the employer's business. No express reference to geographic area or the types of products or services considered to be competitive shall be required in order for the restraint to be enforceable. Any reference to a prohibition against "soliciting or attempting to solicit business from customers" or similar language shall be adequate for such purpose and narrowly construed to apply only to:

(1) such of the employer's customers, including actively sought prospective customers, with whom the employee had material contact; and

(2) products or services that are competitive with those provided by the employer's business.

(c)

(1) Activities, products, or services that are competitive with the activities, products, or services of an employer shall include activities, products, or services that are the same as or similar to the activities, products, or services of the employer. Whenever a description of activities, products, or services, or geographic areas, is required by this Code section, any description that provides fair notice of the maximum reasonable scope of the restraint shall satisfy such requirement, even if the description is generalized or could possibly be stated more narrowly to exclude extraneous matters. In case of a post-employment covenant entered into prior to termination, any good faith estimate of the activities, products, or services, or geographic areas, that may be applicable at the time of termination shall also satisfy such requirement, even if such estimate is capable of including or ultimately proves to include extraneous activities, products, or services, or geographic areas. The post-employment covenant shall be construed ultimately to cover only so much of such estimate as relates to the activities actually conducted, the products or services actually offered, or the geographic areas actually involved within a reasonable period of time prior to termination.

(2) Activities, products, or services shall be considered sufficiently described if a reference to the activities, products, or services is provided and qualified by the phrase "of the type conducted, authorized, offered, or provided within two years prior to termination" or similar language containing the same or a lesser time period. The phrase "the territory where the employee is working at the time of termination" or similar language shall be considered sufficient as a description of geographic areas if the person or entity bound by the restraint can reasonably determine the maximum reasonable scope of the restraint at the time of termination.

(d) Any restrictive covenant not in compliance with the provisions of this article is unlawful and is void and unenforceable; provided, however, that a court may modify a covenant that is otherwise void and unenforceable so long as the modification does not render the covenant more restrictive with regard to the employee than as originally drafted by the parties.

(e) Nothing in this article shall be construed to limit the period of time for which a party may agree to maintain information as confidential or as a trade secret, or to limit the geographic area within which such information must be kept confidential or as a trade secret, for so long as the information or material remains confidential or a trade secret, as applicable.

§ 13-8-55. Requirements of person seeking enforcement of covenants

The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant. If a person seeking enforcement of the restrictive covenant establishes by prima-facie evidence that the restraint is in compliance with the provisions of Code Section 13-8-53, then any person opposing enforcement has the burden of establishing that the contractually specified restraint does not comply with such requirements or that such covenant is unreasonable.

§ 13-8-56. Reasonableness determinations restricting competition; presumptions

In determining the reasonableness of a restrictive covenant that limits or restricts competition during or after the term of an employment or business relationship, the court shall make the following presumptions:

(1) During the term of the relationship, a time period equal to or measured by duration of the parties' business or commercial relationship is reasonable, provided that the reasonableness of a time period after a term of employment shall be as provided for in Code Section 13-8-57;

(2) A geographic territory which includes the areas in which the employer does business at any time during the parties' relationship, even if not known at the time of entry into the restrictive covenant, is reasonable, provided that:

(A) The total distance encompassed by the provisions of the covenant also is reasonable;

(B) The agreement contains a list of particular competitors as prohibited employers for a limited period of time after the term of employment or a business or commercial relationship; or

(C) Both subparagraphs (A) and (B) of this paragraph;

(3) The scope of competition restricted is measured by the business of the employer or other person or entity in whose favor the restrictive covenant is given; provided, however, that a court shall not refuse to enforce the provisions of a restrictive covenant because the person seeking enforcement establishes evidence that a restrictive covenant has been violated but has not proven that the covenant has been violated as to the entire scope of the prohibited activities of the person seeking enforcement or as to the entire geographic area of the covenant; and

(4) Any restriction that operates during the term of an employment relationship, agency relationship, independent contractor relationship, partnership, franchise, distributorship, license, ownership of a stake in a business entity, or other ongoing business relationship shall not be considered unreasonable because it lacks any specific limitation upon scope of activity, duration, or geographic area so long as it promotes or protects the purpose or subject matter of the agreement or relationship or deters any potential conflict of interest.

§ 13-8-57. Reasonableness determinations restricting time; presumptions

(a) In determining the reasonableness in time of a restrictive covenant sought to be enforced after a term of employment, a court shall apply the rebuttable presumptions provided in this Code section.

(b) In the case of a restrictive covenant sought to be enforced against a former employee and not associated with the sale or ownership of all or a material part of:

(1) The assets of a business, professional practice, or other commercial enterprise;

(2) The shares of a corporation;

(3) A partnership interest;

(4) A limited liability company membership; or

(5) An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

a court shall presume to be reasonable in time any restraint two years or less in duration and shall presume to be unreasonable in time any restraint more than two years in duration, measured from the date of the termination of the business relationship.

(c) In the case of a restrictive covenant sought to be enforced against a current or former distributor, dealer, franchisee, lessee of real or personal property, or licensee of a trademark, trade dress, or service mark and not associated with the sale of all or a part of:

(1) The assets of a business, professional practice, or other commercial enterprise;

(2) The shares of a corporation;

(3) A partnership interest;

(4) A limited liability company membership; or

(5) An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

a court shall presume to be reasonable in time any restraint three years or less in duration and shall presume to be unreasonable in time any restraint more than three years in duration, measured from the date of termination of the business relationship.

(d) In the case of a restrictive covenant sought to be enforced against the owner or seller of all or a material part of:

(1) The assets of a business, professional practice, or other commercial enterprise;

(2) The shares of a corporation;

(3) A partnership interest;

(4) A limited liability company membership; or

(5) An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

a court shall presume to be reasonable in time any restraint the longer of five years or less in duration or equal to the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this subsection and shall presume to be unreasonable in time any restraint more than the longer of five years in duration or the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this

1. "While a contract in general restraint of trade or which tends to lessen competition is against public policy and is void (1983 Ga. Const., Art. III, Sec. VI, Par. V(c); OCGA § 13-8-2) a restrictive covenant contained in an employment contract is considered to be in partial restraint of trade and will be upheld 'if the restraint imposed is not unreasonable, is founded on a valuable consideration, and is reasonably necessary to protect the interest of the party in whose favor it is imposed, and does not unduly prejudice the interests of the public.' [217 Ga.App. 672] [Cit.] Whether the restraint imposed by the employment contract is reasonable is a question of law for determination by the court [Cit.], which considers ' "the nature and extent of the trade or business, the situation of the parties, and all the other circumstances." [Cits.]' [Cit.] ... A three-element test of duration, territorial coverage, and scope of activity has evolved as a 'helpful tool' in examining the reasonableness of the particular factual setting to which it is applied. [Cit.]" W.R. Grace & Co. v. Mouyal, 262 Ga. 464, 465(1), 422 S.E.2d 529 (1992).

2. As initially set out in Rash v. Toccoa Clinic Medical Assn., 253 Ga. 322, 320 S.E.2d 170 (1984), there is a distinction between consideration of restrictive covenants in employer/employee situations as opposed to a partnership situation, with the former requiring a stricter scrutiny in determining the reasonableness of the restrictions. Roberts v. Tifton Medical Clinic, 206 Ga.App. 612, 615, 426 S.E.2d 188 (1992).

So evaluating the clause at issue, we consider McAlpin's contention[217 Ga.App. 673] that the ten-county geographical restriction is overbroad and not intended to protect Coweta's interests, but, instead, meant only to stifle competition. We disagree. As reflected above, Coweta had patients in all ten counties, although the bulk of its patients were from Coweta and Fayette counties. As fully explained by Walker, there was a newly approved hospital which he believed would expand Coweta's opportunities and patient base. As stated in McMurray v. Bateman, 221 Ga. 240, 255(4), 144 S.E.2d 345 (1965), "[t]he territorial limitation of the covenant was, according to precedents set by this court, not too broad if the territory included was that throughout which the plaintiff generally practiced, although not necessarily in every part of the area included [Cit.], including territory over which he had reasonable prospects of extending his practice. [Cits.]" There, the Supreme Court approved the restriction of medicine and surgery by a former doctor/employee within a 50-mile radius of Forest Park, Georgia, for a three-year period.

Similarly, in Raiford v. Kramer, 231 Ga. 757, 204 S.E.2d 171 (1974), the court approved of a covenant restricting the practice of ophthalmology by a former doctor/employee in the five-county metropolitan Atlanta area of Fulton, Clayton, Cobb, DeKalb, and Gwinnett counties for two years after termination of the contract.

Further supporting the conclusion of reasonableness here is the fact that McAlpin is not prevented from treating the entire patient base of Coweta, which was the failure of the covenant disapproved in Dougherty, etc., v. Greenwald, etc., 213 Ga.App. 891, 893(2a), 447 S.E.2d 94 (1994), where employee/accountants of a CPA firm were precluded from contacting any former client of the professional corporation and there was no geographical limit. Id. at 894(2c), 447 S.E.2d 94.

Also, as specifically explained to him before he signed the contract, McAlpin could practice in the metropolitan area in counties not listed, such as Cobb, DeKalb, and Gwinnett, which had a larger population base than the ten-county area from which he was restricted. Compare Osta v. Moran, 208 Ga.App. 544, 546(2), 430 S.E.2d 837 (1993), with Smith v. HBT, Inc., 213 Ga.App. 560, 562(2), 445 S.E.2d 315 (1994).

Pittman v. Harbin Clinic Professional Assn., 210 Ga.App. 767, 771(4), 437 S.E.2d 619 (1993), relied upon by McAlpin, is distinguishable. There, this court upheld a one-year restriction within a 30-mile radius of the clinic's location by former partners of a 50-doctor practice. It struck, however, the restriction as to former employee/doctors, because the radius was 50 miles, instead of 30, and the relative bargaining positions were not equal. Treating employees more harshly than partners was properly found unreasonable.

We believe the situation here is more comparable to that in Dominy v. Nat. Emergency Svcs., 215 Ga.App. 537(2), 451 S.E.2d [217 Ga.App. 674] 472 (1994). There, Dominy was an employee/doctor of the corporation, which contracted with hospitals to provide emergency room physicians. Dominy was assigned to Memorial Hospital and Manor in Bainbridge. His contract restricted him, for a period of two years after termination of the contract, from performing similar services at any hospital where he had worked for the corporation. The clause was found reasonable because "[h]e is not precluded from all practice of medicine, ... nor is he prohibited from providing emergency medical services ... to other hospitals in the immediate vicinity."

Page 503

Similarly, here, McAlpin is not restricted from practicing medicine or surgery in other counties in the metropolitan area, nor is he precluded in treating patients he saw while with Coweta as long as that is done in counties other than the ten specified.

We conclude that the clause was properly found reasonable by the court below.

Under Georgia's Restrictive Covenants Act, OCGA § 13-8-50 et seq., a non-compete covenant is valid only if supported by a legitimate business interest. See OCGA § 13-8-55. Here, Health Services's non-compete covenants were supported by its legitimate business interests in protecting its patient relationships and patient goodwill associated with its ongoing medical practice. See OCGA § 13-8-51 (9) (C), (D) (i) (legitimate business interests include, but are not limited to, substantial relationships with specific prospective or existing patients, and patient goodwill associated with an ongoing professional practice). See Heartland Payment Systems v. Stockwell , 446 F. Supp.3d 1275, 1283 (III) (D) (2) (N. D. Ga. 2020) (company had legitimate business interest under Georgia law to protect, among other things, its client relationship and goodwill); Kennedy v. Shave Barber Co. , 348 Ga. App. 298, 305 1, 822 S.E.2d 606 2018 (noting that company's "non-compete provision was supported by legitimate business interests in that it had devoted considerable resources to developing its name recognition and customer base").

Indeed, in seeking summary judgment, Dr. Wanna did not contend that Health Services failed to show a legitimate business interest in prohibiting him from assisting Coliseum in developing a competing cardiothoracic surgery program. Rather, Dr. Wanna argued that Health Services should not be able to use its non-compete covenants to restrict him from providing [on] call coverage at Coliseum because "it should be against public policy to prohibit a physician from providing call coverage in an Emergency Department." But Dr. Wanna cited no legal authority, and we have found none, that would require a hospital to allow a physician to provide on call coverage at another hospital, where that hospital otherwise falls within the ambit of a restrictive covenant supported by legitimate

[357 Ga.App. 162]

business interests, as is the case here when the evidence is construed in favor of Health Services as the non-movant.¹³

Consequently, for these reasons, the trial court committed no error in denying Dr. Wanna's motion for summary judgment on Health Services's counterclaims alleging that he violated the non-compete covenants in the Physician Agreement and the Asset Purchase Agreement by providing on call coverage at Coliseum.

In CarpetCare Multiservices v. Carle, 347 Ga.App. 497 (819 S.E.2d 894) (2018) (physical precedent only), we addressed the enforceability of a non-compete covenant that, like the non-solicitation-of-employees restrictive covenant before us today, was governed by OCGA § 13-8-53 (a). The non-compete covenant before us in CarpetCare did not contain a geographic limitation. We held that a geographic limitation is required by OCGA § 13-8-53 (a). So we concluded that the covenant was unenforceable.

Mindful of our duty "to afford the statutory text its plain and ordinary meaning," CarpetCare, 347 Ga.App. at 499 (citation and punctuation omitted), and noting that "this same geographic restriction was excluded from OCGA § 13-8-53 (b) pertaining to [restrictive covenants for the] non-solicitation [of business from an

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employer's customers]," id., we reasoned that covenants governed by OCGA § 13-853 (a) must set out some kind of geographic limitation. Id. at 500. We held that "[b]ecause the non-compete covenant [at issue] did not contain any reference to a geographic area limitation, it failed to comply with OCGA § 13-8-53 (a), and thus . . . was void and unenforceable." Id.

The version of Court of Appeals Rule 33.2 (a) then in effect provided that, because one judge dissented, CarpetCare was physical precedent rather than binding precedent. But we find its reasoning persuasive and now adopt it.

Our conclusion that covenants governed by OCGA § 13-8-53 (a) must set out some kind of geographic limitation is reinforced - at least as it relates to covenants prohibiting post-termination conduct - by language elsewhere in OCGA § 13-8-53.

Subsection OCGA § 13-8-53 (c) (1) makes clear that subsection (a) does require a description of geographic areas. It states that "[w]henever a description of . . . geographic areas . . . is required by this Code section, any description that provides fair notice of the maximum reasonable scope of the restraint shall satisfy such requirement, even if the description is generalized or could possibly be stated more narrowly to exclude extraneous matters." (Emphasis added.)

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Subsection (c) (1) must be read to indicate that a description of geographic areas is required of restrictive covenants governed by OCGA § 13-8-53 (a). That is because subsection (a) is the only subsection of "this Code section," that is of OCGA § 13-8-53, that can be read to require a description of a geographic area. Subsection (b) does not; it specifies a context in which description of a geographic area is expressly not required; it provides that "[n]o express reference to geographic area" is required of covenants not to solicit a former "employer's customers." Subsection (c) is discussed above. Subsection (d) provides that any restrictive covenant that does not comply with the Act is unenforceable. Subsection (e) exempts agreements to maintain confidential information and trade secrets from the requirement of a geographic-area limit. So that leaves only subsection (a) as the subsection that could require restrictive covenants to include a geographic location. And subsection (a) applies to the restrictive covenant here.

More generally, this conclusion comports with "two well-known and related principles of statutory construction: expressio unius est exclusio alterius (expression of one thing implies exclusion of another) and expressum facit cessare tacitum (if some things are expressly mentioned, the inference is stronger that those not

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mentioned were intended to be excluded)." Hammock v. State, 277 Ga. 612, 615 (3) (592 S.E.2d 415) (2004) (italics in original).

And the General Assembly goes on in OCGA § 13-8-56 (4) to provide that "[a]ny restriction that operates during the term of an employment relationship . . . shall not be considered unreasonable because it lacks any specific limitation upon scope of . . . geographic area ...." (Emphasis added.) But OCGA § 13-8-53 (a), which applies to restrictions that operate outside the term of employment, contains no such exemption from the requirement of a specific limitation of geographic scope. It follows that the General Assembly intended that restrictions that operate outside the term of an employment relationship must include a specific limitation upon the scope of geographic area.

Our Supreme Court's analysis in Hammock, 277 Ga. at 615 (3) is instructive. There the court construed the defense of habitation statute, OCGA § 16-3-23. One subsection of that statute expressly excludes the application of the defense between members of the same family or household. The other two subsections do not contain such an exclusion. So the court held that those two subsections must be read to allow application of the defense, even between members of the same family or household.

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NASB would have us adopt the reasoning of the dissent to CarpetCare, 347 Ga.App. at 497. It argues that a restrictive covenant that focuses on people instead of places does not need an explicitly stated geographic limitation. The dissent in CarpetCare reasoned that "the lack of a geographic area restriction [was] of no consequence" to the enforceability of the restrictive covenant at issue there because the covenant was "limited in that it applie[d] just to customers with whom the [a]ppellee ha[d] previously worked[.]" CarpetCare Multiservices, 347 Ga.App. at 501. (Ray, J., dissenting). NASB similarly argues that the Wimmers' restrictive covenant implicitly has a reasonable geographic limitation: because the restrictive covenant prohibits the Wimmers from soliciting NASB agents, and those agents only operate in the United States, the restrictive covenant has a geographic limitation - the United States - which is reasonable, given that NASB's business is nationwide.

The majority rejected such an argument in CarpetCare. 347 Ga.App. at 497.

There, the appellant argued that "the term 'geographic area' [in OCGA § 13-8-53 (a)] should not be interpreted literally, and [that] the limitation as to the type of customer [the appellee] could not have contact with under the non-compete covenant should satisfy the geographic area requirement." Id. at 500. But we held that "this interpretation is inconsistent with the language in both OCGA §§ 13-8-53 and 13-8-56

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and would not afford the statutory text its plain and ordinary meaning." Id. (punctuation omitted).

The restrictive covenant here "does not contain a geographic limitation. Under its terms, [the Wimmers] would be prohibited from [hiring or soliciting] any [NASB employee] anywhere in the world. Such a result is clearly unreasonable under the statute, rendering the [covenant] void and unenforceable." Lifebrite Laboratories v. Cooksey, No. 1:15-CV-4309-TWT (III) (A) (2), 2016 U.S. Dist. LEXIS 181823, at *14 (N.D.Ga. Dec. 9, 2016). Thus, we conclude that "the trial court correctly determined that [the covenant] was void and unenforceable." CarpetCare, 347 Ga.App. at 500. Accord Automotive Assur. Group v. Giddens, No. 1:20-CV-03356-ELR (III) (B) (1) (a), 2020 U.S. Dist. LEXIS 256272, at *12 (N.D.Ga. Dec. 16, 2020) ("[B]ecause the plain text of the non-compete covenant contains no geographic limitation (by reference or otherwise), it fails as a matter of Georgia law.") (citing CarpetCare, 247 Ga.App. at 497). See also OCGA §§ 13-8-53 (d) ("[a]ny restrictive covenant not in compliance with [OCGA §§ 13-8-50 through 13-8-59] is unlawful and is void and unenforceable"); OCGA § 13-8-54 (b) ("[i]n any action concerning enforcement of a restrictive covenant, a court shall not enforce a restrictive covenant unless it is in compliance with the provisions of Code Section 13-8-53"). Because the

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covenant "at issue on appeal [is] unenforceable, [the Wimmers] cannot be held liable for interfering with [it]." American Plumbing Professionals v. Servestar, 363 Ga.App. 392, 394 (870 S.E.2d 518) (2022).

The dissent here observes that "non-recruitment restrictions do not fall neatly into" OCGA § 13-8-53 and on that basis shifts to discussions of policy in case law that predates the Act and in a well-regarded treatise. That's not our role. "[I]f the statutory text is 'clear and unambiguous,' we attribute to the statute its plain meaning, and our search for statutory meaning is at an end." Deal v. Coleman, 294 Ga. 170, 173 (1) (751 S.E.2d 337) (2013).

The statutory text before us is clear and unambiguous. As detailed above, the Act declares unenforceable restrictive covenants that operate after the end of the parties' business relationship and that lack a geographic limitation. OCGA §§ 13-8-53 (a), (d).

It is true that the statute directs that geographic descriptions be read forgivingly. It provides, "Whenever a description of activities, products, or services, or geographic areas, is required by this Code section, any description that provides fair notice of the maximum reasonable scope of the restraint shall satisfy such requirement, even if the description is generalized or could possibly be stated more

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narrowly to exclude extraneous matters." OCGA § 13-8-53 (c) (1) (emphasis added). The plain meaning of that statutory text is that descriptions will be read forgivingly, but descriptions are required. That text does not authorize courts to infer implied descriptions where, as here, the restrictive covenant provides no description.

The statute provides two exceptions to the requirement of a geographic limitation: restrictions on solicitation of customers and protection of trade secrets. OCGA §§ 13-8-53 (b), (e). But those exceptions are not applicable here.

It is of no consequence that there are strong policy arguments for a different rule or that those policy arguments had been adopted in judicial decisions that preceded the Act.

[W]e should refrain from proclaiming the existence of public policy provisions that our legislature has chosen not to enact and that run contrary to our precedent. Here, by its enactment of [the Act], the General Assembly has declared the public policy of the state with respect to those contracts that should not be enforced by the courts. . . . It is fundamental that matters of public policy are entrusted to the General Assembly, and not this court. It is equally fundamental that it is not for this Court to expand or contract the scope of the General Assembly's legislative enactments, unless the policy choices it makes by enacting statutes exceed its constitutional authority. No constitutional claim has been made in this case, and under the circumstances present

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here, there is no justification for interfering with the public policy choices made by the General Assembly.

BPG Inspection, LLC v. Omstead, 367 Ga.App. 128, 135-136 (1) (883 S.E.2d 593) (2023) (citations and punctuation omitted).

In ruling on the motion for declaratory judgment on Count 2, the trial court considered the restrictive covenant set forth in subparagraph (a) of the "non-compete" language. The covenant set forth in subparagraph (a) provides that the former Lapolla employees shall not

engage in or have any interest in any activity that directly or indirectly competes with the business of [Lapolla] or any of its affiliates as conducted at any time during the Employment Period, including without limitation, accepting employment from or providing consulting services to any such

[325 Ga.App. 264]

competitor, owning any interest in or being a partner, shareholder or owner of any such competitor.

This language contains no reasonable limit on the kind, character, or scope of work restricted and effectively restricts the former employees from working for a Lapolla competitor in any capacity. A non-compete covenant is too broad and indefinite to be enforceable where it contains no limit on the work restricted and effectively prohibits an employee from working for a competitor in any capacity. McNease v. Nat. Motor Club of America, Inc., 238 Ga. 53, 56, 231 S.E.2d 58 (1976) ; Howard Schultz & Assoc., etc., Inc. v. Broniec, 239 Ga. 181, 184, 236 S.E.2d 265 (1977) ; Arnall Ins. Agency, Inc. v. Arnall, 196 Ga.App. 414, 416–418, 396 S.E.2d 257 (1990) ; Russell Daniel Irrigation Co. v. Coram, 237 Ga.App. 758, 760, 516 S.E.2d 804 (1999). Moreover, the restriction on acting as a partner, shareholder, or owner of a competitor is overbroad and unenforceable because, by definition, it prohibited activities beyond the scope of those performed for Lapolla by its former employees. Wright v. Power Industry Consultants, Inc., 234 Ga.App. 833, 834–835, 508 S.E.2d 191 (1998), overruled on other grounds, Roadtrac, 250 Ga.App. at 321, 551 S.E.2d 735; Ceramic & Metal Coatings Corp. v. Hizer, 242 Ga.App. 391, 393–394, 529 S.E.2d 160 (2000).

Accordingly, the trial court correctly found that the pleadings show the restrictive covenant set forth in subparagraph (a) was void on its face and unenforceable as a matter of law. Under the non-severability rule, the trial court also correctly found that the restrictive covenant set forth in subparagraph (c), and the covenant restricting solicitation of Lapolla customers (as set forth in a portion of subparagraph (d)) are also unenforceable as a matter of law.⁵ The trial court did

[750 S.E.2d 475]

not separately consider the enforceability of the two restrictive covenants set forth in subparagraph (b), and in the portion of subparagraph (d) dealing with restrictions on disclosure of Lapolla trade secrets and confidential information. As set forth above, these two restrictive covenants do not automatically fail under the non-severability rule, so the trial court erred by applying the non-severability rule to find that these covenants were unenforceable as a matter of law. It follows that the trial court's declaratory judgment order, and partial final judgment on the pleadings, on Count 2 of the complaint is affirmed in part (to the extent it declared that no tortious interference can be alleged for a violation of the three restrictive covenants it correctly found to be non-severable and unenforceable), and reversed

[325 Ga.App. 265]

in part (to the extent it erroneously applied the non-severability rule and declared that no tortious interference can be alleged for a violation of the remaining two restrictive covenants).

In determining the reasonableness of a non-compete clause, we must consider both the interests of the party seeking to enforce the covenant and those of the party restricted by the covenant. Specifically, we must consider how the covenant impacts the restricted [318 Ga.App. 652]party's ability to earn a living and to determine with reasonable certainty both the nature of the activities that are restricted and the geographic area of the restriction. W.R. Grace, 262 Ga. at 465–466(2), 422 S.E.2d 529;Hulcher Svcs. v. R.J. Corman R. Co., 247 Ga.App. 486, 491–492(4), 543 S.E.2d 461 (2000). See also OnBrand Media, 301 Ga.App. at 144(2)(a), 687 S.E.2d 168 (applying mid-level scrutiny and considering both territorial limits and the scope of the activity restricted to determine the enforceability of restrictive covenants); Roberts, 206 Ga.App. at 615, 426 S.E.2d 188. We must then balance these considerations against the company's business interests, including its interest in maintaining existing customer relationships established by the former partner, shareholder, or employee. W.R. Grace, 262 Ga. at 465–466(2), 422 S.E.2d 529. See also Habif, Arogeti & Wynne, 231 Ga.App. at 294(2)(c), 498 S.E.2d 346 (even under mid-level scrutiny “[t]he restricted activities must be reasonably related to the business interests the employer seeks to protect”) (footnote omitted).

Here, the non-compete clause is prima facie unreasonable because by restricting activity in the entire country, it contains no legitimate territorial restriction. Specifically, it fails to limit Carson's restricted activities either to the geographic area in which he served Obor Holding clients or to the geographic area in which Obor Holding does business. See Paramount Tax & Accounting v. H & R Block Eastern Enterprises, 299 Ga.App. 596, 601(1), 683 S.E.2d 141 (2009); Hulcher Svcs., 247 Ga.App. at 491–492(4), 543 S.E.2d 461;New Atlanta Ear, Nose & Throat Assoc., 253 Ga.App. at 687(2), 560 S.E.2d 268;Habif, Arogeti & Wynne, 231 Ga.App. at 293–294(2)(b), 498 S.E.2d 346.

Moreover, the clause is overbroad because it effectively bars Carson from working in any capacity for, owning any interest in, or serving on the board of any competitor of

[734 S.E.2d 484]

Obor Holding. See Uni–Worth Enterprises v. Snider, 244 Ga. 636, 639–640(1), 261 S.E.2d 572 (1979) (restrictive covenants which prohibit a party from engaging in any business or activity that might compete with his former employer are too indefinite to be enforced); Howard Schultz & Assoc. v. Broniec, 239 Ga. 181, 184(2), 236 S.E.2d 265 (1977) (covenants prohibiting an employee from working for “a competitor ‘in any capacity’ impose a greater limitation upon the employee than is necessary for the protection of the employer and therefore is unenforceable”) (citations omitted); Global Link Logistics v. Briles, 296 Ga.App. 175, 178(1)(c), 674 S.E.2d 52 (2009) (“A non-competition covenant which prohibits an employee from working for a competitor in any capacity, that is, a covenant which fails to specify with particularity the activities which the employee is prohibited from performing, is too broad and indefinite to be enforceable”) (citation and punctuation omitted). Put another way, these restrictions are far broader than necessary to [318 Ga.App. 653]protect Obor Holding's legitimate business interests because the company has no legitimate business interest in not having to compete with Carson in any facet of the defense industry anywhere in the United States. Hulcher Svcs., 247 Ga.App. at 492(5), 543 S.E.2d 461.

Given its failure to limit either the scope of activities from which Carson is prohibited in engaging or the territory in which Carson is so restricted, the non-compete clause is unreasonable and therefore unenforceable. See Rash v. Toccoa Clinic Med. Assoc., 253 Ga. 322, 324(1), 320 S.E.2d 170 (1984) (even under mid-level scrutiny, restrictions must be reasonable as to territory); OnBrand Media v.Codex Consulting, 301 Ga.App. 141, 146(2)(a)(ii), 687 S.E.2d 168 (2009) (applying mid-level scrutiny and finding restrictive covenants unenforceable because they contained “no specific territorial limits nor any clear limits on the scope of the prohibited activity”) (footnote omitted).