Noncompete News: Georgia Court uses Restrictive Covenant Act to Blue Pencil Nonsolicit Agreement

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In the first published decision applying Georgia's new Restrictive Covenants Act ("RCA"), the federal district court for the Northern District of Georgia "blue penciled" or modified an otherwise overbroad nonsolicitation of customers provision.

In PointeNorth Insurance Group v. Zander, Zander, an insurance broker, signed a nonsolicit and nondisclosure agreement on May 11, 2011 (ironically, the same day the legislation curing any constitutional defect in the RCA became effective). In September 2011, Zander resigned and created a competing insurance company. When Zander sent an e-mail to people that may have included some of PointeNorth's client, PointeNorth sued.

The nonsolicit at issue stated that Zander, for a 2-year period post employment "will not solicit, accept or attempt to solicit or accept . . . business from any of the Employer's clients . . . with whom Employee had any contact or who were clients of Employer within three months immediately preceding such termination of this Agreement."

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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