Non-Compete Agreements: Am I Banned from Working on Planet Earth?
I was recently fired from my job at Company X. I received a separation notice and a copy of the non-compete agreement that I had signed when I started working for Company X. The non-compete agreement states that I cannot perform the same or similar duties that I performed at Company X for a competitor “anywhere in the world.” Company X is a multi-national company that provides security services. I worked at Company X as an entry-level security officer at an office building in Georgia. Can Company X enforce the non-compete agreement against me?
Not all employees are subject to Georgia’s Restrictive Covenants Act.
Under the Georgia Restrictive Covenants Act (“RCA”), a non-compete clause may generally only be enforced against employees who perform certain job duties. Typically, non-management level employees who do not engage in sales work (i.e., regularly solicit customers or potential customers and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others) are not subject to the RCA.
In this example, the security officer was merely an entry-level employee who did not have any management duties or engage in any sales work. So, the security officer would probably not be subject to the RCA. But, assuming that the security officer is subject to the RCA, the non-compete agreement is probably still not enforceable against him.
Non-compete agreements must have a geographic limitation to be enforceable.
To be enforceable, a non-compete agreement must be “reasonable in time, geographic area, and scope of prohibited activities.” O.C.G.A. § 13-8-53. A geographic area of “anywhere in the world” is not reasonable because it prevents an employee from doing the same or similar work for a competitor anywhere on planet Earth. (I guess there’s always the Moon or Mars!) Recently, the Northern District of Georgia decided that non-compete agreements with this sort of overly broad geographic limitation are void and unenforceable. See Lifebrite Labs., LLC v. Cooksey, 2016 U.S. Dist. LEXIS 181823 (N.D. Ga. Dec. 9, 2016).
Specifically, the Lifebrite court determined that “anywhere in the world” is not a true geographic limitation at all, and therefore the non-compete clause is not enforceable. See Lifebrite at *16. Further, although courts have the authority to “modify” the language in a non-compete clause to make that clause enforceable, the Lifebrite court declined to do so because it would need to insert a reasonable geographic limitation in order to save the non-compete clause—an act that would have gone far beyond the Court’s authority to “modify” (i.e., strike, limit and narrow) overly broad restrictions. See id. at *20. Accordingly, the Lifebrite court determined that the non-compete clause was void. See id.
In this example, the security officer would probably not be bound by the non-compete agreement because it does not have a true geographic limitation and, therefore, is void.
If you have any questions about the enforceability of your non-compete agreement, or need help drafting an enforceable non-compete agreement, please contact us.