Georgia: “Key Employee” Clarified Under Restrictive Covenants Act

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March 5, 2019

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The Georgia Restrictive Covenants Act (GRCA) prohibits noncompete agreements with employees unless they “customarily and regularly” solicit customers or make sales, or are a “key employee.” In Blair v. Pantera Enters., Inc., the Georgia Court of Appeals provided clarity on what a key employee is. There, an employee left to work for a competitor and a client followed because of its relationship with the employee. The employee did not solicit customers or make sales, and the employer attempted to enforce the noncompete on the basis of being a key employee.

The GRCA defines “key employee” in two ways:

  • as “an employee who, by reason of the employer’s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors, or other business relationships during the course of the employee’s employment… has gained a high level of notoriety, fame, reputation, or public persona as the employer’s representative or spokesperson….”
  • as “an employee in possession of selective or specialized skills, learning, or abilities or customer contacts or customer information who has obtained such skills, learning, abilities, contacts, or information by reason of having worked for the employer.”

The court stated that both definitions must be met for an employee to be defined as a key employee. Ultimately, the court stated that the employee was not a key employee because his relationship with the client was due to his own personal characteristics rather than the employer’s investment.

Action Items

  1. Have noncompete agreements reviewed by legal counsel for consistency with this ruling.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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