Jackson Lewis: Georgia's Definition of "Modify" Under the Restrictive Covenants Act | Practical Law

Jackson Lewis: Georgia's Definition of "Modify" Under the Restrictive Covenants Act | Practical Law

This Law Firm Publication by Jackson Lewis P.C. addresses LifeBrite Laboratories LLC v. Nina H. Cooksey, a case of first impression, in which the US District Court for the Northern District of Georgia held that "modify" as referenced by Georgia's Restrictive Covenants Act (GRCA), means to remove "unreasonable restrictions" and to narrow "overbroad terms" in non-compete agreements. A non-compete agreement between Cooksey and LifeBrite did not define a specific geographic area. When Cooksey began working for a competitor, LifeBrite sued her for breach of the non-compete. In her motion for declaratory judgment, Cooksey argued that the contract was unenforceable without a geographic restriction. Georgia law deems non-compete covenants enforceable if they are "reasonable in time, geographic area, and scope of prohibited activities." The judge agreed that the lack of geographic limitation made the non-competition covenant unenforceable. Although the GRCA empowers courts to modify unenforceable agreements, the district court found the word "modify" allows a court to remove unreasonable restrictions and narrow overbroad terms, but not to rewrite or supply new terms to make a covenant enforceable.

Jackson Lewis: Georgia's Definition of "Modify" Under the Restrictive Covenants Act

Practical Law Legal Update w-006-8069 (Approx. 3 pages)

Jackson Lewis: Georgia's Definition of "Modify" Under the Restrictive Covenants Act

by Jackson Lewis P.C.
Published on 05 Mar 2017Georgia
This Law Firm Publication by Jackson Lewis P.C. addresses LifeBrite Laboratories LLC v. Nina H. Cooksey, a case of first impression, in which the US District Court for the Northern District of Georgia held that "modify" as referenced by Georgia's Restrictive Covenants Act (GRCA), means to remove "unreasonable restrictions" and to narrow "overbroad terms" in non-compete agreements. A non-compete agreement between Cooksey and LifeBrite did not define a specific geographic area. When Cooksey began working for a competitor, LifeBrite sued her for breach of the non-compete. In her motion for declaratory judgment, Cooksey argued that the contract was unenforceable without a geographic restriction. Georgia law deems non-compete covenants enforceable if they are "reasonable in time, geographic area, and scope of prohibited activities." The judge agreed that the lack of geographic limitation made the non-competition covenant unenforceable. Although the GRCA empowers courts to modify unenforceable agreements, the district court found the word "modify" allows a court to remove unreasonable restrictions and narrow overbroad terms, but not to rewrite or supply new terms to make a covenant enforceable.