Background
Historically, Georgia courts have declined to apply another state's law to determine whether to enforce restrictive covenants against a Georgia employee, regardless of whether the agreement stated that another state's law controlled (choice-of-law provision). So, too, Georgia's law has long distinguished between restrictive covenants that are reasonable (in scope, duration and geographic reach) and those that are unreasonable; the former are enforceable, while the latter are considered "in general restraint of trade." Contracts that are "in general restraint of trade" are "deemed to be contrary to public policy" and "cannot be enforced" in Georgia.(1)
Facts
In Motorsports of Conyers, LLC v Burbach, the Georgia Supreme Court clarified how a court must determine whether to enforce the parties' foreign choice-of-law provision in a noncompete agreement. Burbach, the Chief Operating Officer of two Harley-Davidson dealerships, executed noncompete agreements. Burbach worked in Georgia, but these agreements had a Florida choice of law provision. Among other things, the agreements prohibited him from accepting employment in any capacity with any competitor located in a 120-mile radius of any of the dealerships. When Burbach quit, he began working for another Harley-Davidson dealership within the 120-mile radius. Motorsports sued Burbach in Georgia, argued that the choice-of-law provision mandated that Florida law apply to his agreement and, accordingly, that the...
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