Carpetcare Multiservices, LLC v. Carle. , 347 Ga. App. 497 ( 2018 )

FIFTH DIVISION
MCFADDEN, P. J.,
RAY and RICKMAN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
October 3, 2018
In the Court of Appeals of Georgia
A18A1094. CARPETCARE MULTISERVICES, LLC v. CARLE.
RICKMAN, Judge.
Carpetcare Multiservices, LLC sued former independent contractor Elgin
Thomas Carle for breach of contract due to his alleged violation of a non-compete
covenant. Carle filed a motion for judgment on the pleadings that the trial court
granted. The trial court found that the non-compete covenant was void and
unenforceable because it did not contain a geographic limitation as required by
OCGA § 13-8-53 (a). On appeal, Carpetcare contends that the trial court erred in
finding the non-compete covenant void and unenforceable. For the following reasons,
we affirm.
A motion for judgment on the pleadings is authorized where the
undisputed facts that appear from the pleadings establish that the movant
is entitled to judgment as a matter of law. All well-pleaded facts are to
be accepted as true. However, the trial court is not required to adopt a
party’s legal conclusions based on those facts.
(Citation and punctuation omitted.) Lapolla Industries v. Hess, 325 Ga. App. 256,
258 (2) (750 SE2d 467) (2013).
So viewed, the record shows that Carpetcare provided cleaning, repairing, and
resurfacing services to apartment complexes. Carpetcare primarily utilized
independent contractors for its services, and Carle was one of Carpetcare’s
independent contractors. As a condition of his contract, Carle signed a confidentiality
and non-disclosure agreement (“the Agreement”) which contained a non-compete
covenant.
During Carle’s contractual relationship with Carpetcare, he performed
resurfacing work at several apartment complexes, including Greenhouse Apartments.
After working for Carpetcare for approximately one year and a half, Carle’s
contractual relationship was terminated. Thereafter, Carle continued to provide
resurfacing services to Greenhouse on behalf of his new employer, Carpetcare’s
competitor. Carle also continued to provide resurfacing services at other apartment
complexes he worked at while employed by Carpetcare.
2
The complaint alleged that Carle’s continued work at Greenhouse and the other
apartment complexes breached the non-compete covenant contained in the
Agreement. The non-compete covenant provided, “[Carle] agrees that during the term
of [Carle’s] relationship with [Carpetcare], and for a period of one (1) year after
[Carle’s] last day worked for [Carpetcare], regardless of the reason for [Carle’s]
termination, [Carle] will not provide any service identified herein to any customer
with whom [Carle] had any contact during the term of his employment with
[Carpetcare].”
Carpetcare contends that the trial court erred by granting Carle’s motion for
judgment on the pleadings, holding that the non-compete covenant was void and
unenforceable for failure to contain a geographic limitation as required by OCGA §
13-8-53 (a). We disagree.
Pursuant to OCGA § 13-8-53 (a),”[e]nforcement of contracts that restrict
competition during the term of a restrictive covenant, so long as such restrictions are
reasonable in time, geographic area, and scope of prohibited activities, shall be
permitted.” However, regarding non-solicitation covenants, “[n]o express reference
to geographic area or the types of products or services considered to be competitive
shall be required in order for the restraint to be enforceable.” OCGA § 13-8-53 (b).
3
Here, where the parties agree that the restrictive covenant at issue is a non-
compete as opposed to a non-solicitation, the statute further clarifies what types of
geographic limitation are required. “The phrase ‘the territory where the employee is
working at the time of termination’ or similar language shall be considered sufficient
as a description of geographic areas if the person or entity bound by the restraint can
reasonably determine the maximum reasonable scope of the restraint at the time of
termination.” OCGA § 13-8-53 (c) (2). And certain presumptions regarding what is
reasonable are built into the Code:
In determining the reasonableness of a restrictive covenant that limits or
restricts competition during or after the term of an employment or
business relationship, the court shall make the following presumptions:
. . . A geographic territory which includes the areas in which the
employer does business at any time during the parties’ relationship, even
if not known at the time of entry into the restrictive covenant, is
reasonable provided that: (A) The total distance encompassed by the
provisions of the covenant also is reasonable; (B) The agreement
contains a list of particular competitors as prohibited employers for a
limited period of time after the term of employment or a business or
commercial relationship; or (C) Both subparagraphs (A) and (B) . . .
OCGA § 13-8-56 (2). Additionally, “[a]ny restrictive covenant not in compliance
with [OCGA § 13-8-50 through 13-8-59] is unlawful and is void and unenforceable;
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provided, however, that a court may modify a covenant that is otherwise void and
unenforceable so long as the modification does not render the covenant more
restrictive with regard to the employee than as originally drafted by the parties.”
OCGA § 13-8-53 (d); see also OCGA § 13-18-54 (b).1
“When we consider the meaning of a statute, we must presume that the General
Assembly meant what it said and said what it meant.” (Citation and punctuation
omitted.) Deal v. Coleman, 294 Ga. 170, 172 (1) (a) (751 SE2d 337) (2013). “To that
end, we must afford the statutory text its ‘plain and ordinary meaning,’ we must view
the statutory text in the context in which it appears, and we must read the statutory
text in its most natural and reasonable way, as an ordinary speaker of the English
language would.” (Citations and punctuation omitted.) Id. at 172-173 (1) (a). “[I]f the
statutory text is ‘clear and unambiguous,’ we attribute to the statute its plain meaning,
and our search for statutory meaning is at an end.” Id. at 173 (1) (a).
OCGA § 13-8-53 (a) clearly provides that non-compete covenants are
permitted “so long as such restrictions are reasonable in time, geographic area, and
1
The trial court held that it could not “blue pencil” in a geographic area
without rendering the covenant more restrictive with regard to Carle. Carpetcare does
not challenge the trial court’s failure to “blue pencil” in a geographic area on appeal,
instead focusing its argument on the trial court’s alleged erroneous interpretation of
the term “geographic area.”
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scope of prohibited activities[.]” As shown above, this same geographic restriction
was excluded from OCGA § 13-8-53 (b) pertaining to non-solicitation agreements.
Carpetcare argues that the term “geographic area” should not be interpreted
literally and the limitation as to the type of customer Carle could not have contact
with under the non-compete covenant should satisfy the geographic area requirement.
However, this interpretation is inconsistent with the language in both OCGA §§ 13-8-
53 and 13-8-56 and would not afford the statutory text its “plain and ordinary”
meaning. See Deal, 294 Ga. 172 (1). Because the non-compete covenant did not
contain any reference to a geographic area limitation, it failed to comply with OCGA
§ 13-8-53 (a), and, thus, the trial court correctly determined that it was void and
unenforceable. See OCGA § 13-8-53 (d); see also Mayor v. Harris, 302 Ga. 853, 855
(808 SE2d 806) (2018) (“Because the statutory text of [the statute at issue] is clear
and unambiguous, we attribute to the statute its plain meaning . . . and our search for
statutory meaning is at an end.) (citation and punctuation omitted”); Deal, 294 Ga.
at 173 (1) (a).
Judgment affirmed. McFadden, P. J., concurs. Ray, J., dissents.*
*THIS OPINION IS PHYSICAL PRECEDENT ONLY. COURT OF APPEALS
RULE 33.2(a).
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In the Court of Appeals of Georgia
A18A1094. CARPETCARE MULTISERVICES, LLC v. CARLE.
RAY, Judge, dissenting.
In this case, the central question is whether it is reasonable, and thus legally
enforceable, for an employer to prevent its former employee for a period of one year
after his employment ends from providing similar services to any customer with
whom the employee worked during his time with his former employer, wherever such
customer may be located. The majority finds that the absence of a geographic area
restriction in the non-compete covenant at issue means that such restriction is not
proper. I disagree and, therefore, dissent.
It is true that a restrictive covenant must be reasonable in “time, geographic
area, and scope of prohibited activities” so as to be enforceable. OCGA 13-8-53(a).
And, it is also true that the non-compete covenant in the instant case did not contain
an expressed geographic area restriction. What it did include, however, is a
limitation that the Appellee/Employee could not work (for a limited time) for any of
the Appellant/Employer’s customers with whom he had worked while still employed
with the Appellant. Thus, this covenant by its own terms is inherently and
indisputably reasonable. It protects the Appellants’s interest in its relationship with
its customers; but also, it allows the Appellee to compete with his former employer
anywhere, at any time, and to do anything, so long as it is not for a customer with
whom he had previously served.
The majority believes that statute requires a geographic restriction. It does
not.1 Rather, the statute only requires that any geographic area restriction be
reasonable. Since no geographic restriction exists in this covenant, and it is limited
in that it applies just to customers with whom the Appellee has previously worked,
then the lack of a geographic area restriction is of no consequence.
1
If there needed to be a geographic limitation, then I also believe the trial
court may have erred when it concluded that it did not have the authority to
“bluepencil” or narrow the scope of this non-compete covenant pursuant to OCGA
§ 13-8-54(b), such as to limit the geographic area to the Appellant’s principle
operating area.
2
Consider for the moment the practical effect of the majority’s ruling. The
Appellant could have written the non-compete covenant to prevent the Appellee from
providing similar services in the Appellant’s home of Cobb County to anyone,
regardless whether the Appellee had worked for such customers previously or not,
and such covenant would have been enforceable.2 But, by limiting the restriction
only to the Appellant’s customers for whom the Appellee had actually worked while
employed with the Appellant, wherever they may be, the majority would declare that
such covenant is invalid. I find that such a holding is not supported by the statute or
otherwise a reasonable outcome to this matter.3
2
See Raiford v. Kramer, 231 Ga. 757, 758 (204 SE2d 171) (1974) (holding
that a contract prohibiting a doctor from practicing ophthalmology in the counties of
Fulton, Clayton, Cobb, DeKalb, and Gwinnett for a period of two years was
reasonable as to time and territory); see also McMurray v. Bateman, 221 Ga. 240,
255 (4) (144 SE2d 345) (1965) (holding that a restrictive covenant prohibiting a
doctor from practicing medicine or surgery within a fifty mile radius from his former
medical office was not too broad).
3
I note that the practical effort of the majority’s ruling for these litigants is
minimal as the covenant at issue has now expired by its own terms since more than
a year has elapsed. As to similarly situated litigants in the future, that’s a different
story.
3