In certain types of businesses, it is not unusual for an employee to be asked to sign a covenant not to compete against his or her employer, should he or she choose to terminate his or her employment in the future. An employee who chooses to violate such an agreement may find himself or herself the defendant in an Atlanta breach of contract action to enforce the terms of the employment agreement.
Of course, not every such agreement is enforceable in court. Typically, a covenant not to compete must be reasonable in scope and duration, issues that, ultimately, are up to the court to decide.
Facts of the Case
The plaintiff in a recent state court case was a limited liability company that owned a barbershop in Atlanta. The defendant began working as a master barber for the plaintiff’s barbershop in 2015. At first, the defendant was classified as an independent contractor, but, after two of the plaintiff’s employees left to open competing businesses in close proximity to its barbershop, the defendant was asked to sign an employment contract. This agreement contained several restrictions on the defendant’s post-employment activities, should she choose to terminate her employment with the plaintiff.
After the defendant stopped working at the plaintiff’s barbershop in order to open her own salon nearby, the plaintiff filed suit against the defendant in the Superior Court of Fulton County, claiming that the defendant had violated the terms of the employment contract and seeking monetary damages and injunctive relief. The defendant, in turn, filed a counterclaim alleging violations of the Fair Labor Standards Act and seeking payment for overtime that the plaintiff had allegedly failed to pay her during her employment at the barbershop.
The trial court found that the restrictive covenants contained in the agreement between the parties was reasonable and enforceable, granting the plaintiff’s request for an interlocutory injunction preventing the defendant from operating a competing business within the radius set forth in the agreement (3 miles), soliciting the plaintiff’s customers, and/or recruiting the plaintiff’s employees.
The Court’s Decision
The Court of Appeals of Georgia affirmed the lower tribunal’s order granting injunctive relief to the plaintiff, thereby agreeing with the trial court that the restrictive covenants at issue were reasonable. Although the defendant resisted enforcement of the agreement on, among other things, the financial ruin and probable bankruptcy that she would face if the injunction was upheld, the court of appeals noted that the agreement that the defendant had violated in opening her shop in such close proximity to the plaintiff had provided her fair notice as to the maximum reasonable scope of the agreement. In the appellate court’s opinion, although the harm to the defendant was not insignificant, the plaintiff stood to lose customer relationships and suffer irreparable harm.
Experienced Employment Law Attorney Serving Atlanta
Attorney John L. Mays at the Atlanta law firm of Parks, Chesin & Walbert handles a wide array of employment law cases. If you need to discuss a potential claim that you may have against a current or former employer, call 877-986-5529 to schedule an appointment. Please be mindful that there is a limited amount of time for asserting your legal rights and a delay in taking action could result in dismissal of your case.
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