FI RST DI VI SI ON

PHI PPS, C. J.

, ELLI NGTON, P. J.

, and M CM ILLI A N, J.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a ls .us /r ule s /

Febr uar y 10, 2015



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 4 A2 14 1 . EARLY et al . v . M IM EDX GROUP, INC.

M C M ILLI A N , J u dg e.

W e g ran t ed t h i s i n terl ocu t o ry ap p eal to d et erm i ne wh et h er a p ro vi s i o n i n a

Co n s u l t in g Ag reem en t t h at req u i res a d es ig n at ed em p l oy ee o f th e Co n s u l t an t to

“ d ev o t e h er fu l l wo rk i n g t i m e” t o t h e p erfo rm an ce o f t he Co n s u l tan t ’ s d u ti es u n d er

t h e Ag reem en t co ns t i t ut es an i l l eg al an d u n en fo rceab l e res t rai nt o f t rad e, an d i f n o t

,

wh et h er t h e p ro v i s i on i s en fo rceab l e ag ai n s t t h e em p l oy ee n am ed in t h e ag reem en t

,

ev en t h ou g h s h e d i d n o t ex p res s l y a g r e e t o b e b o u n d by t h e p ro v i s i o n at i s s u e. W e

an s wer th e fi rs t qu es t i o n i n t he affi rm at i ve a n d t h u s n eed n o t reach t h e s eco n d

q u es ti o n

.Pert i n en t t o t h es e i s s ues

, t h e reco rd s h o ws 1 t h at ap p el l ee Mi M ed x G ro u p

, In c.

(“ M i M ed x ”) dev el o p s

, m a nuf a c tur e s, a nd m a r

ke ts pa t en t p ro t ect ed b io m at eri al -b as ed

p ro d uct s

, i ncl u d i n g b i o i m p l an t s m ad e fro m h u m an am ni o ti c m em

b ran e. Ap p el l an t

Ry an n e Earl y 2 w a s ex p eri en ced i n t h i s fi el d

, an d h ad wo rk ed fo r a “ no w d efu n ct

em erg in g co m

p et i t o r o f Mi M ed x .” So m et i m e aro u nd J an uary 2 0 1 1

, M i M ed x an d

Earl y en t ered i n t o n eg o ti at i o n s ab o u t a p o s s i b l e “ b u si n es s rel at i o ns h i p,” an d l at er t h at

m o nt h M i M ed x an d Earl y

, as fo u n d er an d p res i d en t o f ISE P ro fes s i o n al Tes t i n g &

Co n s u l t in g Serv i ces

, In c. (“ ISE”), en t ered i n t o a “ M u tu al Co n fi d e n t i a l i t y an d

No n d i s cl o su re Ag reem en t ” (“ N o n d i s cl os u re Ag reem en t ”) p ro h i b i t i n g Earl y fro m

d i s cl os i n g t rad e secret s an d co n fi d en t i al in fo rm at io n

, w h i ch m i g h t b e rev eal ed t o h er

d u ri n g n eg o t i at i o ns wi t h M i M ed x

.

1 Th i s cas e co m es t o u s fro m t h e d en i a l o f a m o t i o n fo r ju d g m en t o n t h e

p l ead i n g s

. Acco rd i ng l y

, o u r v i ew o f t h e reco rd i s l im i t ed t o th e p lead i ng s an d ex h i b i t s

t h at h av e p ro p erl y

b een in co rp o rat ed in t o t h e p l ead i n g s

. See Pr i n t i s v. Ba n ker s Li f e

In s . Co

. , 2 5 6 Ga. Ap p. 2 6 6 (5 68 SE2 d 8 5 ) (2 0 02 ).

2 A t t h e t i m e t h e part i es n eg o t i at ed an d e x e c u t ed t h e Co n s u lt i ng Ag reem en t

, Earl y w as k n o wn b y t h e l as t n am e Hern an d ez. Ho wev er, s h e m arri ed i n J an u ary 2 0 1 2,

an d ch an g ed h er n am e to Earl y

. Al t h o u g h t h e Co n s u l t in g Ag reem e nt, ini t i al p l ead i ng s

an d o t h er d o cu m en t s i n t h e reco rd b ear t h e nam e Hern an d ez, t h e n o ti ce o f ap p eal was

fi led un d er t h e nam e Ry an ne Earl y an d t he p art i es refer t o h er a s s u ch

. Th u s

, to

m ai n t ai n cl ari t y an d fo r eas e o f referen ce, we wi l l u s e th e n am e Earl y th ro u gh o u t t h i s

o p i n i o n

.

2A s h o rt t i m e l at er, 3 Mi M ed x an d ISE en t ered i n t o a C o n s ul t i n g A g reem en t

wh ereb y I S E

, as t he n am ed “ Co n su l tan t ,” wo u l d pro v i de pro d u ct

, res earch an d

d ev el o p m en t co n s ul t i n g s erv ices t o M i M ed x r e l a t ed t o i t s am n i o n p ro d u ct s

.

Parag rap h 2 o f th e Co n su l ti n g Ag r e e m e n t n am ed Earl y as t h e ISE em p l o y ee wh o

wo u l d p ro v i d e co n s u l t i n g s erv i ces t o M i M ed x

, an d fu rt h er s p eci fi ed t h at Earl y wo u ld

“ d ev o t e h er fu l l wo r k i n g t i m e (n o t l es s th an fo rt y (4 0 ) h o u rs p er w eek ) t o [t h e]

p erfo rm an ce o f Co ns u l t an t ’ s d u t i es h ereu n d er” (“ fu l l-wo rk i n g -t i m e p ro v i s i o n ”).

M i M ed x t e r m i n at ed t h e Co n s u l ti n g Ag reem en t i n Decem b er 2 0 1 1

, an d

s u b s eq u en t l y fi l ed a v eri fi ed co m p l ai n t ag ai ns t

, i n ter al i a, Earl y an d ISE (co l l ect i v el y

referred to as “ ap p el l an t s ”) s eek i n g d am ag es

, s p eci fi c p erfo rm an ce an d i n ju n ct i v e

rel i ef u n d er t he Co ns u l t in g Ag reem en t an d th e s ep arat e No nd i s cl o s u re Ag reem en t

. 4

Al t h o u g h t h e co m

p l ai n t s et ou t n u m ero u s cau s es of act i o n ag ai n s t b o t h ISE an d Earl y

an d s p eci fi cal l y al l eg ed t h at Earl y h ad fai l ed t o d ev o t e h e r fu ll wo rk i n g t i m e t o t h e

p erfo rm an ce o f t h e co n s u l t in g d u t ies u n d er th e Co n s ul t i n g Ag reem en t

, i t di d n o t s et

o u t a s ep arat e cau s e o f act i o n fo r b reach o f t h at Ag reem en t

.

3 Th e Co n s u l t i n g A g reem en t s t at es i t w as e x e c u t ed Feb ru ary 7

, 2 0 10

, b u t i t

ap p ears u n d is p u t ed t h at i t was ex ecu t ed i n 2 0 1 1 , n ot 2 0 1 0

.

4 Th e Co n s u l t i n g Ag reem en t al s o co n t ai ned co n fi d en t i al i t y p ro v i s i o n s

.

3Ap p el l an t s an s wered an d fi l ed a co u n t ercl ai m s e e k i n g p ay m en t fo r t h e

co n su l t i n g s erv i ces wh i ch were ren d e r e d i n Decem b er 2 0 1 1

. A s h o rt t i m e l at er,

M i M e d x fi l ed an am en d ed co m p l ai n t as sert i n g a cau se o f act i o n ag ai ns t ISE an d

Earl y fo r b reach of t he Co n s ul t i n g Ag reem en t

. A l t ho u g h M i Med x d id n o t s peci fi cal l y

al l eg e w h i ch p ro v i s i o n s o f t he Co n s ul t i n g Ag reem en t h ad b een b reach ed

, t h e

am en d ed co m

pl ai n t ag ai n al l eg ed t h at Earl y h ad fai led to d ev o t e h er fu l l wo rk i n g t i m e

t o t he p erfo rm an ce of t h e co n s u l t i n g d u t i es u n der t h e Co n s u l t i n g Ag reem en t an d h ad

i n s t ead m i s ap p ro p ri at ed M i M ed x ’ s t rad e s ecret an d co n fi d en t i al in fo rm at io n t o s t art

a ri v al co m

p an y

.

Ap p el l an t s s u b s e q u e n t l y fi l ed a m o t i o n fo r ju d g m en t o n t h e p l ead i n g s

, 5

co n ten d in g

, am on g o t h e r t hi n g s

, t h at t h e fu ll -wo rk i n g -t i m e p ro v i s i on 6 o f t h e

Co n s u l t in g Ag reem en t wa s v o i d a n d u n en fo rceab l e as ei t h er a g en eral o r p art i al

5 OCGA § 9 -1 1 -1 2 (c) p ro v i d es t h at “ [a] ft er t h e p l ead in g s are cl o s ed b u t wi t h in

s u ch ti m e as n o t t o d el ay t h e tri al

, an y p art y m ay m o v e fo r ju dg m en t o n t h e

p l ead i n g s .”

6 Ap pel l an ts i n d icat ed at t h e h eari n g o n t h e m o t i o n th at t h ey h ad g lean ed fro m

d i s co v ery t h at M i M ed x’ s cl ai m was t h at ISE an d Earl y had b reach ed t h e fu l l

wo rk i n g -t i m e p ro v i s i o n b y m i s ap p ro p ri at i n g co n fi d en ti al an d p ro p ri et y i n fo rm at i o n

t o s et u p a ri v al co m

p an y w h i le t h e C o ns u lt i ng Ag reem en t rem ai ned i n effect

. As

s t at ed ab o v e, t hi s al l eg at i o n al s o ap pears i n t h e p l ead i n g s

.

4res t rai n t of t rad e. 7 Fo l l o wi n g a h eari n g

, th e t ri al co u rt d en i ed ap p el l an t s ’ m ot i o n fo r

j u d g m en t o n t he p l ead in g s wi t h o u t ex p l an at i on

, an d ap p el l an t s fi l ed an ap p l i cat i o n

s e e k i n g i n t erl o cu to ry rev i ew o f th at o rd er i n t h i s Co u rt

. W e g ran ted ap pel l an t s ’

ap p li cat io n

, an d th i s ap p eal fo l l o wed

. As m ore fu l l y s et fo rt h b el o w, we n ow rev ers e.

It i s wel l s et t l ed t h at

,

[o ] n a m o t i o n fo r ju dg m en t o n t h e p l e a d i n g s

, we t reat al l w el l -p led

m at eri al al leg at i o n s by th e no n m o v an t as t ru e an d al l d en i a l s b y th e

m o v an t as fal s e. Al t h o u g h s u ch m o ti o n i s

, b y d efi n i ti o n

, l im i t ed t o th e

p l ead i n g s

, a t ri al co u rt m ay al s o co n si d er ex h i b i t s t h at h av e b een

i n co rp orat ed i nt o t h e p l ead i n g s

. If, i n rev i ewi n g th es e do cu m en t s

, t h ere

i s a co m pl et e fai l u re b y

t h e p l ai n t i ff t o s t at e a cau s e o f act i o n, t h en th e

d efen d an t i s en t i t l ed t o ju d g m en t as a m at t er o f l aw.

(Fo o tn o tes o m i t ted .) Pr i n t i s v

. B a n ker s Li f e In s

. Co

. , 2 5 6 Ga. Ap p

. 26 6

, 2 6 6 (5 6 8

SE2 d 8 5 ) (2 0 0 2 ). Ho wev er, we are m i n d fu l t h at “ [a] m o t i o n f o r j u d gm en t o n t h e

p l ead i n g s s h ou l d be g ran t ed o n l y i f t h e m o v in g p art y i s cl earl y en t i t l ed to j u d g m en t .”

(Ci t at i o n an d p u n ct u at i o n o m i tt ed .) S h er ma n v. Fu l to n Co u n ty Bo a rd o f As s es s o r

s

,

2 8 8 Ga. 8 8 , 9 0 (7 01 SE2 d 4 7 2 ) (2 0 1 0 ).

7 T h e Ag reem en t d i d n o t co nt ai n ex p li ci t po s t o r i n

- t e rm n on -co m p et i t i o n o r

n o n -s o l i ci t at i o n p ro v i s io n s

.

51

. Befo re t u rn i ng t o t he m eri ts o f t h i s ap p eal

, w e m u s t fi rs t ad d res s Mi M ed x ’ s

co n ten t i o n t h at ap pel l an t s are b arred fro m ch al l en g i n g t h e en fo rceab i li t y o f t h e

Co n s u l t in g Ag reem en t b ecau s e t h ey fai l ed t o rai s e t h i s i s s u e b y way o f a res p o n s i v e

p l ead i n g b el ow, an d b ecau s e ap p el l an t s ad m i tt ed t h at t h e Co n s u l t in g Ag reem en t was

v al i d an d en fo rceab l e i n t h ei r co un t ercl ai m s eek i n g p a ym en t fo r t h e co n s u l t i n g

s erv i ces t h at were ren d ered i n Decem b er 2 0 1 1.

(a) M iM ed x fi rs t as s ert ed i t s cl ai m fo r b reach of th e Co n su l t i n g A g reem en t in

i t s am en d ed co m

p l ai n t

, b u t di d n o t s p eci fy w h i ch p ro v i s i o n o f t h e A g reem en t was

al l eg ed l y b reach ed

. Ap p el l an t s d i d n o t fi l e an an s wer t o t h e am en d ed co m p l ai n t

, b ut

rai s ed t he i s s u e o f t h e en fo rceab i l i t y o f Parag rap h 2 o f t h e Co n s ul t i n g A g reem en t by

way of a m o t i o n fo r ju d g m en t o n t h e p l ead in g s. T h i s was su ffi ci en t. A s w e hav e h el d

o n nu m ero u s o ccas io n s

, a d efen d an t “ i s no t req ui red t o fi l e an an s wer to an am en d ed

co m p l ai n t u n l es s t h e t ri al co u rt h as affi rm at iv el y o rd ered s uch an s wer.” (Ci t at i o n an d

p u n ct u at i o n o m i t t ed

. ) Hi n er Tr a n s po r t

, In c. v. Jet er

, 2 9 3 Ga. Ap p

. 70 4

, 7 0 5 (6 6 7

SE2 d 9 1 9 ) (2 0 0 8 ). See al s o OCGA § 9-1 1 -1 2 (a). “ T h i s i s co n s is t en t wi t h t h e

s t at em en t i n OCGA § 9 -1 1 -8 (d ) t h at av erm en ts i n a pl ead i n g t o wh i ch n o res p o n s i v e

p l ead i n g i s req u i red o r p erm i t t ed s hal l b e t ak en as d en i ed o r av o i ded

. ” (Ci t at i o n s an d

p u n ct u at i o n o m i t t ed .) Na t

. Ci t y Mt g

. v. Po i n t Ct r. Fi n ., In c.

, 3 0 6 Ga. A p p

. 65 5

, 6 5 6

6(7 0 3 SE2 d 1 1 3 ) ( 2 0 1 0 )

. M o reo v er, al t h o u g h M i M ed x ci t es OCGA § 9 -1 1 -8 (c) fo r

t h e p ro p o s i t i o n t h at affi rm at i v e d efen s es s u ch as i l l eg al i t y m u st al way s b e rai s ed by

way of a res p o n s i v e p l ead i n g, o u r p reced en t cl earl y es t ab l i s h es t h at t h i s ru le i s n o t as

i n fl ex i b le as M i M ed x co n t en d s.

Th e p u rp o s e o f t h e req u i rem en t t h at affi rm at i ve defen s es be p l ead ed i s

t o p rev en t s u rp ri s e an d t o g i ve t h e o p po s in g p art y fai r n o t ice o f wh at he

m u s t m eet as a d efen s e. If i t i s n o t p lead ed [,] i t i s g en eral l y h el d th at th e

d efen s e i s w ai ved

, b u t if i t i s rai s ed b y m o t i o n

, o r b y s p eci a l p l e a i n

co n n ect i o n wi th t he an s we r o r b y m o t i o n fo r s u m m ary j u d gm en t t h ere

i s n o wai v er.

Ha r dy v. Ga

. Ba

p t i s t Hea l t h Ca r e S

ys t ems

, In c.

, 2 3 9 Ga. Ap p

. 59 6

, 5 9 6 -5 9 7 (1 ) (5 2 1

SE2 d 6 3 2 ) (1 9 9 9 ), an d ci t es

. Cf. Fi r s t Ba n k of Cl a

yt o n Co u n t

y v. Do l l a r

, 1 5 9 Ga.

Ap p

. 8 1 5

, 8 1 6 -8 17 (3 ) (2 8 5 SE2 d 2 0 3 ) (1 9 8 1 ) (affi rm at i v e d efen s e of i l l eg al i t y

wai v ed w h en it w as n ei t h er i n cl u d ed i n a d efen s iv e p l ead i n g n or rai s ed b y wr i t t en

m o ti o n ).

M o reo v er, b y fai li n g t o rai s e t h i s is s u e i n t h e t ri al co u rt

, M i M ed x i t s el f h as

wai v ed th i s i s s u e o n ap p eal

. See Ph i l l i ps v. S ta t e Fa r m Mu t. A u t o

. In s

. Co

. , 1 2 1 Ga.

Ap p

. 3 4 2

, 3 4 7 (2 ) (b ) (1 73 SE2 d 7 23 ) (1 9 7 0 ) (“ Th e l ack of a p l ead i n g

, i f s u ch t h ere

was

, was n o t r a i s ed i n th e t ri al co u rt an d t h at is s ue is n o t p ro p erl y b efo re u s

. Th e

7q u es ti o n was n o t s u b m i t t ed t o t h e t ri al co u rt

, was n ot p as s ed u p o n b y th at co u rt

, an d

t h u s u n der t h e l a w of t h i s St at e can n o t b e co n s i d ered b y th i s co u rt .”) (ci t at i o n s an d

p u n ct u at i o n o m i t t ed ). Ro b er t s v. Fa r mer

, 12 7 Ga. Ap p

. 23 7

, 2 4 0 -2 4 1 (5 ) (1 9 3 SE2 d

2 1 6 ) (1 97 2 ) (co n t en t i o n n ot m ad e i n t h e t ri al co u rt can n o t b e co n s i d ered on ap p eal ).

(b ) M i M ed x al s o co n t e nds tha t a ppe l la nt s are b arred fro m as s ert i n g th i s d efen s e

b ecau s e t h ey th em s el v es so u g h t t o en fo rce t h e Co n s u l ti n g A g r e e m en t i n t h ei r

co u nt ercl ai m an d s p eci fi cal l y p l ed t h at t h e Ag reem en t w a s v a l i d an d en fo rceab l e.

Ag ai n , h o wev er, M i M ed x h as wai v ed th e ri g ht t o rai s e t h i s co n t en t i on b y fai l i n g t o

rai s e i t b el ow. E .g

., Cr ip

p en v. Ou t b a ck S t ea kh o u s e In t l

. , 3 2 1 G a. Ap p

. 1 6 7

, 1 7 0 (1 )

(7 4 1 SE2 d 2 8 0 ) (2 0 1 3 ).

M o reo v er, th i s co nt en t i o n fai l s o n t h e m eri t s

. Fi rs t

, M i M ed x h ad no t as s ert ed

i t s cl ai m fo r breach o f th e Co n s ul t i n g Ag reem en t at t h e ti m e t h e ap p el l an t s m ad e t h i s

al l eg at i o n in t h ei r co u n t ercl ai m

, an d th u s i t w ou l d b e i n co n g ru o us t o s ay t h at t h ey h ad

ad m i t t ed t o a cl ai m

t h at h ad n o t y et b een p l ed

. 8

8 M i M ed x as s ert ed t h e fo l l o wi n g cl ai m s i n i t s o ri g i n al co m p l ai n t: Co u n t I

-

Act i o n f or S pe c if ic P erfo rm an ce o f t he Co n fi d en t ial i t y Ag reem en t ag ai n s t ISE; Co u nt

II

- Act i o n fo r Sp eci fi c Per f o rm an ce o f th e Co n su l t i n g Ag reem en t ag ai ns t ISE an d

Hern an dez; Co u nt III

- Act i o n fo r In ju n ct i o n t o E nfo rce Co n fi d en t i al it y A g reem en t

ag ai n s t ISE; Co un t IV

- A ct i o n fo r In ju n ct i on t o En fo rce t h e Co n s u l t in g A g reem en t

ag ai n s t ISE an d Earl y ; Co u n t V

- Act io n fo r Dam ag es fo r Breach o f t h e

Co n fi d en t i al i t y Ag reem en t ag ai n st ISE; Co u n t VI - Act i on fo r Dam ag es fo r Breach

8Ad d it i on al l y

, th e Co ns u lt i n g A g reem en t co n t ai n s t h e fo ll o w i n g s ev erab i l i t y

cl au s e: “ [i ] f an y p ro v i s i o n o f t hi s Ag reem en t s hal l b e d ecl ared i n v al id o r il l eg al fo r

an y reas o n wh at s o ev er, t hen n o t wi t h s t an d i n g s u ch i n v a l i d i ty or i l l eg al i t y

, t h e

rem ai n i n g t erm s an d p ro v i s i o n s o f t h i s Ag reem en t s h al l rem ai n in fu l l fo rce an d effect

i n t h e sam e m an n er as if t h e in v al i d o r i l l eg al pro v i s i o n h ad n ot b e e n co n t ai n ed

t h erei n .” It i s wel l set t l ed t h at th e i n t en t of t h e p art i es d et erm i n es wh et her a co n t ract

i s s ev erab l e s u ch t h at t h e rem ai n i n g co n t ract p ro v i s i o n s wi ll s u r v i v e e v e n i f o n e o r

m o re p ro v i s i o n s o f t he co n t ract are v o id

. Ca p r i co rn S ys t ems

, In c. v. Ped

n eka r

, 2 4 8

Ga. Ap p

. 4 2 4

, 4 2 8 (2 ) (d ) (5 4 6 S E 2 d 5 5 4 ) (2 00 1 ). A n d “ [a] s ev erab i li t y cl au s e

i n d i cat es t h e i n t en t o f th e p art i es w h ere t h e rem ai n d er o f t h e co n tract can ex i s t

wi t h o u t th e v oi d p o rt i o n

. ” Id

. A c co rd i ng l y

, “ [v ] o i d res t ri ct i v e co v en an t s

, wh i ch

can n ot b e b l u e-p en ci l ed o u t o f t h e co n t ract

, d o n o t v oi d t h e en t i re co n tract wh en t h e

co n tract co n tai n s a sev erab i l i t y cl au s e

. . . [Ci t s .] [T] h e ot h er co n tract t erm s s u rv i v e

o f th e Co n fi d e n t i al i t y Ag reem en t ag ai n s t ISE an d Earl y ; Co u nt VII

- Act i o n fo r

M i s ap p ro p ri at i o n o f Trad e Secret s ag ai n s t Defen d an t s ; Co u n t V III

- Act i o n fo r Frau d

i n t h e In du cem en t ag ai n s t Earl y an d ISE; Co u n t IX

- Act i o n fo r Frau d ag ai n st ISE an d

Earl y ; Co u n t X

- Act i on fo r Frau d u l en t Bu s i n es s Ex p en s es ag ai ns t ISE an d Earl y ;

Co u n t XI

- To rt i o u s I n t erferen ce wi t h Co n t ract u al Rel at i o n s ag ai ns t Defen d an t s ;

Co u n t XII

- To rt io u s In t erferen ce wi t h Bu s i n es s Rel at i o n s ag ai n s t Defen d an t s ; Co u nt

XIII

- Co n v ers i o n ag ai n s t E arl y an d ISE; Co un t XIV

- U n j u s t E n ri ch m en t ag ai n s t

Earl y an d ISE; an d Co u n t XV

- Act i on a g a i n s t a l l D efen d an t s fo r Im p o s i t i o n o f a

Co n s t ru ct i v e Tru s t

.

9t h e v oi d t erm s

, p ro v i d ed t h at t h e co n t ract i s s ev erab l e.” 9 Id

. Ap pl y i n g t h es e p ri n ci p l es

h ere, we fi n d t hat ap p el l an t s w ere n o t fo recl o s ed fro m s eek i ng to en fo rce p art s o f t h e

Co n s u l t in g Ag reem en t wh i l e ch al l en g i n g o t h er s ev erab l e p art s o f t hat Ag reem en t as

u n en fo rceab l e.

2

. W e n o w t u rn t o t h e p ri m ary i s s ue o n ap p eal

– wh et h er t he fu l l -wo rk i n g -t i m e

p ro v is i o n i s en fo rceab le

– an d b eg i n o u r an al y s i s wi t h Parag rap h 2 o f t h e Co n s u l t i n g

Ag reem en t wh i ch p ro v i d es :

Du t i es

. In co n

j u n c t i o n w i t h des i g nat ed M iM ed x s t aff an d u n d er th e

d i rect i on an d co n t ro l o f J o h n Dan i el

, t h e Co n s u l t a n t s h al l p ro v id e

co n s u l ti n g s erv i ces t o M i M ed x

. T h e n at ure an d s co p e o f t h e co n su l t i n g

s erv ic e s rel at e t o p ro d uct an d res earch an d dev el o pm en t m an ag em en t

rel at ed t o am

n io n p ro d u ct s

. Rya n ne [ Ea r l y] s ha l l d

evo t e h er fu l l

wo r ki n g t i m e (n o t les s t h a n f o rt y (4 0 ) h o u r s p er week) t o [

t h e]

p er f or ma n ce o

f Co n s u l t a n t ’s d

ut i es h er eu n d

er

.

(Em p h as i s s u p p li ed .)

9 W e n ot e t h at i n 2 01 1

, o u r Gen eral As s em b l y am en d e d O C G A § 13 -8 -5 3 to

p erm i t b l u e-p en ci li ng

, p ro v id ed t h at “ t h e m o d i fi cat i o n d o es n o t ren d er th e co v en an t

m o re res tri ct i v e wi th reg ard t o t h e em p l oy ee th an as o ri g i nal l y draft ed b y t h e p art i es .”

OCGA § 1 3-8 -5 3 (d ). Ho wev er, t h e am en d m en t ap p l ies t o co nt ract s en t ered i n t o o n

o r aft er May 1 1

, 2 01 1

. Mu r ph r ee v. Y

a ncey Br o s

. Co

. , 3 1 1 Ga. Ap p

. 7 4 4

, 7 47

, n

. 1 0

(7 1 6 SE2 d 8 2 4 ) (2 0 1 1 ).

10Ap p el l an t s co n t en d t hat t h e fu l l -wo rk i n g -t i m e p ro v is i on p ro hi b i t s Earl y fro m

p erfo rm i n g a n y k i n d of w o rk d u ri n g t h e term o f t h e ag reem en t o t her t h an fo r

M i M ed x

, an d th us i s an i l leg al res t rai n t o f t rad e. M i M ed x

, o n t h e o t her h an d

, as s ert s

t h at t h i s i s s i m

p le b reach o f co n t ract act i o n i n t h at t h ey pai d ISE fo r 1 0 0 p ercen t o f

Earl y ’ s w o rk i ng t im e a n d t h at ISE (an d Earl y ) breach ed t he Co n su l t i n g A g reem en t

b y fai l i n g t o d e l i v e r wh at t h ey h ad p ro m i sed

. M o reo v er, M i M ed x arg u es t h at t h e

p ro v is i o n i s n o d i fferen t fro m l o y al t y o r b es t effo rt p ro v i s io n s req u i ri n g an em p l o y ee

t o d ev ot e h er t im e o n t h e jo b t o h er em p l o y er’ s b u s i n es s

.

W e m u s t b eg i n o u r an al y si s b y co n st ru in g t h e fu l l -wo rk i ng -t i m e pro v is i o n an d

wh at i s req u i red t herei n

. Th at an al y s i s h as b een ai d ed i n t h i s cas e b ecau s e t he p art i es

es s en t i al l y ag ree o n w h at t h e cl au s e m ean s

– ISE co n t ract ed t h at Earl y w o u l d d ev o t e

an y wo rk i n g t i m e t o M i M ed x ’ s b u s i n es s, wh et h er o r n o t t h at wo rk i ng t i m e was

rel at ed i n an y

way t o th e ty

p e o f en t e r p r i s e i n wh i ch M i M ed x i s en g ag ed

. 1 0 W e s ee

n o reas o n t o co n s t ru e t h e co nt ract i n a d ifferen t o r n arro wer w ay g iv en t h at t he p art i es

ag ree o n i t s t erm s

. See H

ea d v. Sca n l i n

, 2 5 8 Ga. 2 1 2

, 2 1 4 (1 ) (3 67 SE2 d 5 4 6 ) (1 9 8 8 ).

1 0 Fo r ex am

p l e, at o ral arg u m en t an d i n t h e t ri al co u rt

, M i M e d x as s ert ed t h at

Earl y wo u l d b e pro hi b i t ed fro m b ab y s i t t i n g o n t h e week en d s or wo rk i n g i n a

b o o k s t o re.

11Nex t

, we tu rn to t h e q u es t i o n o f wh et h er a co n t ract b et ween a co m p an y an d i t s

cu s t o m er t h at req u i res an em p l oy ee to s pen d al l h er wo rk i n g t i m e o n th e cu s t o m er’ s

b u s i n es s i s an i l l eg al res t rai n t o f t rad e o r m erel y a l o y al t y p ro v i s i o n. At l a n t a Br ea d

Co

. In t l

., In c. v. Lu

p t o n -S mi t h

, 2 8 5 Ga. 58 7

, 5 89 (2 ) (6 7 9 SE2 d 7 2 2 ) (2 0 0 9 ) (“ At l a n ta

Br ea d Co

. II

”), i s part i cu l arl y i ns t ru ct iv e. In th at cas e, o u r Su p rem e Co u rt co n s i d ered

wh et h er an i n -t erm co v en an t i n a fran ch i s e ag reem en t pro h i bi t i n g t h e fran ch i s ee fro m

o p erat i n g co m

p et i n g s t o res was a l o y al t y pro v i si o n o r res t rai n t o f t rad e, an d h el d t h at

“ [a] p l ai n read i n g o f t h e cl au se s h o ws t h at i t p ro h ib i t s t h e [co n t ract o r] fro m en g ag i n g

i n a cert ai n t y

p e o f b us i nes s d u ri n g t he t erm s o f t h e p art i es ’ ag reem en t an d

, t h u s

, i t

i s a p art ial res t rai n t o f t rad e d es i g n ed t o l es s en co m p et it i on .” Id . at 5 8 9 (2 ).

Here, t h e fu l l-wo rk i n g -t i m e p ro v i si on i s i n on e s en s e b ro ad er t h an t he cl au s e

i n At l a n t a Br ea d Co

. II i n t h at E a r l y i s p ro h i b it ed fro m d o i n g an y wo rk wh et h er in

co m p et i t i o n w i t h M i M ed x o r n o t

, an d y et i s n arro wer in t h at an y o t her ISE em p l o y ee

co u ld p erfo rm wo rk d irect l y i n co m p et it i o n wi t h Mi M ed x

. Bu t M i M ed x ’ s b reach o f

co n tract cl ai m

, as p l ed

, i s n o t s eek i n g to pro h i bi t o t h e r ISE em p l o y ees fro m

co m p et i n g ; rat h er, M i M ed x i s s eek i ng d am ag es fro m ISE fo r n o t req u i ri ng Earl y t o

co n fo rm t o t h e t erm s o f t h e co nt ract . Th u s

, o u r an al y si s m u s t fo cu s o n wh et h er ISE

can en fo rce t h e fu l l -wo rk i n g -t i m e pro v i s io n ag ai n s t Earl y b ecau s e i f ISE i s pr o h i b i t ed

12fro m req u i ri n g Earl y t o sp en d an y an d al l wo rk i n g t i m e o n co n su l t i n g fo r M i M ed x,

we fai l to s ee h o w M i M ed x can b as e a b reach o f co nt ract cl ai m o n t h e s am e co n d u ct

.

See Do u g h er t

y, M cKi n n o n & Lu b

y, P.C. v. Gr een wa l d

, Den zi k & Da vi s

, P .C.

, 2 1 3

Ga. Ap p

. 8 9 1

, 89 2 (1 ) (4 4 7 SE2 d 9 4 ) (1 9 9 4 ) (“ [I] t i s t he l eg al effect o f a co n t ract u al

p r o v i s i o n

, n o t t h e p art i es ’ s peci fi ed m an n er o f en fo rcem en t o f t h e p ro v i s i o n

, t h at

d et erm i n es en fo rceab i l i t y vel n o n o f a co n t ract

. ”) (ci t at i o n an d p u n ct u at i o n o m i t t ed );

OCGA § 1 3 -8 -2 (a) (2 ) (co n tract s wh i ch are d eem ed co n t rary t o p u b l i c p o l i cy

,

i n cl u d i n g co n t ract s i n g en eral res t rai n t o f t rad e, are u nen fo rceab l e).

W h en v iewed in th at l ig ht

, i t i s cl ear t h at u n d er At l a n t a B r ea d Co

. II

, t h e fu l l

wo rk i n g -t i m e p ro v i s i o n is a res t rai n t o f t rad e, rat h er t h an a l o y al t y p ro v i s i o n

.

Al t h o u g h M i M ed x ci t es s ev eral cas es t h at i t co n t en d s dem o n s t rat e t h at t h i s Co u rt

ro u t i nel y rev i ews an d u p h o l d s b es t e f f o r t

, fu l l -t i m e, o r s i m i l ar “ lo y al t y ” p ro v i s i on s

wi t h o u t reg ard t o th ei r an t i -co m p et i t i v e effect

, i t ap p ears t h at in n o n e o f t h o s e cas es

was t h i s Co u rt co nfro n t ed wi t h t h e i s su e p res en t ed h e r e

. I t i s wel l s et t l ed t h at

“ [q ] u es t i o n s nei t h er b ro u g h t to t h e at t en t io n o f t h e Co u rt no r ru l ed u p o n wi l l n o t b e

co n si d ered as p reced en t .” BIK As s o cs

. v. Tr ou p Co u n t y, 2 3 6 Ga. Ap p . 7 34 , 7 3 8 (4 )

(5 1 3 SE2 d 2 8 3 ) (1 9 99 ). As o u r ap p el l at e co u r t s “ r e pe a te dly cau t i o n ed [,] o u r d eci s i on s

s t an d o n ly fo r t h e p o i n t s rai s ed b y t h e p ar t i e s an d d eci d ed b y t h e co u rt

. Qu es t i on s

13wh i ch m erel y l u rk i n t h e reco rd

, n ei t h er b ro u g h t t o t h e at t en t i o n o f t h e co u rt no r ru l ed

u p o n

, are n o t t o b e co n s i d ered as h av i n g b een s o d eci d ed as t o co n s ti t ut e preced en t s .”

( C i t at io n s an d p u n ct u at i o n o m i t t ed .) H o l t o n v. Ph

ys i ci a n O nco l o g

y S vcs

., 2 9 2 Ga

.

864, 86 9 -8 7 0 (2 ) (7 4 2 SE2 d 7 0 2 ) (2 0 1 3 ). 1 1 Acco rd i ng l y

, we ag ree w i t h ap p el l an t s tha t

n o n e o f th es e cas es p recl u de u s fro m an al y zi n g t h e fu l l -t i m e-wo rk i n g p ro v i s i o n as a

res t ri ct i v e co v en an t wh en t he t erm s o f t h e p ro v i s i o n, as ag reed b y t h e p art i es

, wo u ld

p recl u d e Earl y fro m e n g a g i ng i n an y wo rk ap art fro m th e co n tract wi t h M i M ed x,

1 1 Fo r ex am

p le, i n Cr i p p en v.Ou t b a ck S t ea kh o us e In t l

., t h e em p l o y ee s i g n ed an

em pl o y m en t ag reem en t wh i ch co n t ai n ed a t rad i ti o n al n o n-co m p et e p ro v i s i o n t h at

p re v e n t ed h i m fro m h o ld i n g an own ers h i p i n t eres t i n an y o t h er res t au ran t

. Th e

ag reem en t al s o co n tai n ed a p ro v i s i o n v ery s i m il ar t o t h e o n e at i s s u e h ere, p u rs u an t

t o wh i ch t h e em

p l o y ee p ro m i s ed t o “ ‘ d ev o t e o n e hu n dred p ercen t (1 0 0 %) o f (h i s ) fu l l

b u s i n es s t i m e, at ten t i o n, en erg i es

, an d effo rt t o t h e b u si n es s affai rs o f t h e Co m p an y .’ ”

3 2 1 Ga. Ap p

. at 1 6 9 (1 ). Bu t we d i d n o t ad d res s wh et h er t h e res t ri ct iv e co v en an t was

i l leg al

, fi n d i n g t h at t he em pl o y ee h ad wai v ed t h i s co nt en t i o n by fai li n g t o r a i s e i t

b el o w. Id

. at 1 6 9

- 1 7 0 ( 1 ). See al s o Co f f ee S ys

. o f At l a n t a v. Fo x

, 2 2 6 Ga. 5 9 3

, 5 9 4

(1 7 6 S E 2 d 7 1 ) (1 9 7 0 ) (al t h o u g h fact u al reci tat i o n referred to co n t ract p ro v i s i o n

r e q u i r i ng em

p l o y ee to “ ‘ u s e h i s b es t effo rt s t o t he ex cl u s i o n o f al l o t h e r

em pl o y m en t ,’ ” t h e Su p rem e Co u rt d i d n o t an al y ze t h e p ro v is io n

, n o r d o es it ap p ear

t h at th e em

p l o y ee ch al l en g ed i t); McMu r r a y v. Ba t ema n

, 2 21 Ga. 2 4 0 (1 4 4 SE2 d 3 4 5 )

(1 9 6 5) (v i o l at io n of a p o s t -em p l o y m en t res t ri ct i v e co v en an t

, an d n o t th e “ d ev o t e y o u r

fu l l t im e” p ro v i s i o n ); S

h a w

, Jr

., In c. v. Reyn o ld

s

, 2 21 Ga. A p p

. 5 4 8 (4 7 2 SE2 d 1 2 5 )

(1 9 9 6) (ap p e a l i n a wro ng fu l t erm i n at i o n cas e wh ere t h e o nl y i s s ue co n cern ed

wh et h er cert ai n ev i d en ce h ad b een pro p erl y ex cl u d ed ); Ni ka s v. Hi n dl ey

, 9 9 Ga. Ap p.

1 9 4

, 1 9 6 -1 9 7 (1 0 8 SE2 d 9 8 ) (1 9 5 9 ) (wro n g fu l t erm i n at i o n i n wh i ch t h ere was n o

co n ten t i o n t h at th e em

p l o y ee h ad v i o l at ed t h e fu l l -t i m e p ro v i s i o n an d t h at p ro v i s i o n

was m en t i o n ed i n t he co nt ex t o f wh et h er t h e co n t ract l ack ed m u t u al i t y ).

14wh i ch res t ri ct i on wo u ld cl earl y h av e an an t i -co m p et i t i v e effect

. See Do u g her t y

, 2 1 3

Ga. Ap p

. at 89 2 -8 9 3 (1 ) (an al y zi n g l i q u i d at e d d a m ag es p ro v i s i o n as a res t ri ct i v e

co v en an t d u e t o i ts an t i -co m p et i t i v e effect ).

In an al y zi n g res tri ct i v e co v en an t s

, Geo rg i a co u rt s h av e d i s t in g u i s h ed b et ween

g en eral an d p art i al res trai n t s o f t rad e. See W

. R. Gr a ce & Co

. v. Mo u

ya l

, 2 6 2 Ga. 4 6 4,

4 6 5 (1 ) (4 22 SE2 d 5 2 9 ) (1 9 9 2 ); At l a n t a Br ea d Co

. II

, 2 8 5 Ga. at 58 8 (1 ). W h i l e

“ co n t ract s t h at g en eral l y res t rai n t rad e are v oi d ag ai n s t p ub l i c p o l i cy ,” i d

., co v en an t s

i n p art i al res t rai n t o f t rad e are u p h el d “ i f th e r e s t rai n t i m po s ed i s n ot u n reas o n ab l e,

i s fo u n ded o n v al u ab l e co n s i d erat i o n, an d i s r e as o n ab l y neces s ary t o p ro t ect t h e

i n t eres t o f t h e p art y i n wh o s e fav o r i t i s i m p o sed

, an d d o es n o t u n d u l y p reju d i ce t h e

i n t eres t s o f t h e p u bl i c.” (Ci t at i on o m i tt ed .) W . R. Gr ace & Co

., 2 6 2 Ga. at 4 6 5 (1 ).

Ap p el l an t s arg u e t h at b ecau s e t h e fu l l -wo rk i n g -t i m e p ro v i s i o n i s d es i g n ed t o

co m p l et el y p ro h i b i t Earl y

fro m wo rk i n g i n an y

m ark et p l ace, i t s h o ul d b e v iewed as

a g en eral res t rai n t o f t rad e an d d ecl ared v o id wi t h o u t fu rt h er an al y s i s

. Pret erm i t t i n g

wh et h er t h e p ro v i s i o n i s a g en eral o r p art i al res t rai n t o f t rad e, we fi n d t h at ev en i f

v i ewed as a p art i al res trai n t o f t rad e, t h e p ro v i s io n wo u ld b e u n en fo rceab l e. A p art i al

res t rai n t o f t rad e i s en fo rceab le o n ly i f i t is reas o n ab l e as t o t im e, t erri t o ry an d s co pe.

Mu r p h ree v. Y

a ncey Br o s

. Co

. , 3 1 1 Ga. Ap p. 7 4 4

, 7 4 7 (7 1 6 SE2 d 8 2 4 ) (2 0 1 1 ). In

15m ak i n g t h i s d et erm i n at io n

, “ ‘ a co u rt m ay co n s i d er t h e n at u re an d ex t en t o f t h e

b u s i n es s

, t he s i t u at i o n of t h e part i es

, an d al l o th er rel ev an t ci rcu m s t an ces .’ [Ci t .] Th e

reas on ab l en es s o f t h e res t r a i n t s i m p o s ed i s a qu es t i o n o f l aw.” Id

. at 7 4 7 (1 ). In

ad d it i o n

, Geo rg ia co u rt s h av e ap p l i ed d i fferen t l ev el s o f s cru t i ny bas ed o n t h e t y p e

o f ag reem en t t hat co n t ai ns t h e res t ri ct i v e co v en an t. S wa r tz In ves t men t

s

, LLC v. Vi o n

Ph a rma ceu t i ca l

s, In c.

, 2 5 2 Ga. Ap p

. 3 6 5

, 3 6 8 -3 69 (2 ) (5 5 6 SE2 d 4 6 0) (2 0 0 1 ). An d

i t i s i m p ort an t t o n o te t hat al t h o u g h cas es d is t in g u i s h po s t-t erm res t ri ct i v e co v en an t s

fro m i n -t erm res t ri ct i ve co ven an t s

, at l eas t fact u al ly

, co urt s “ h av e m ad e n o d i st i n ct i o n

as t o t h e l ev el o f scr u t i n y a p p l i e d b as ed o n wh et h er t h e res t rai n t occu rs d u ri n g t h e

t erm o f t h e ag reem en t o r aft er t h e ag reem en t h as b een t erm i n at ed .” 1 2 At l a n t a Br ea d

Co

. II

, 2 8 5 Ga. at 5 9 0 (3 ). See al s o At l a n t a Br ea d Co

. In t l

. v. Lu p t o n -S mi t h

, 2 9 2 Ga.

Ap p . 1 4 , 1 7 -1 8 (1 ) (6 6 3 SE2 d 7 4 3 ) (2 0 0 8 ) (“ At l a n t a Br ea d

Co . I ”).

Gi v en t h e p ro ced u ral p o s t u re, we l ack t h e i n fo rm at i o n n eces s ary to d et erm i n e

t h e p reci s e lev el o f s cru t i n y wh i ch s h o u l d b e ap p l i ed i n th i s cas e; b u t i t i s n ot

n eces sary fo r u s t o m ak e t h at d et erm in at i on

, becau s e th e fu l l -wo rk i n g -t i m e p ro v i s i o n,

1 2 W e fu rt h er n o te t h at ev en i f we v i ew t h i s co n t ract as o n e fo r s erv i ces b y an

i n d ep e n d en t co n t ract or i n s t ead o f an em p l o y ee, “ ‘ co nt ract s fo r serv i ces by

i n d ep en den t co n t ract o rs ’ s h o u l d b e t reat ed li k e ‘ em p l o y ee co v e n a n t s an ci l l ary to

em pl o y m en t co n t ract s.’ ” (Ci t at io n o m i t t ed .) Pa r a g o n Tech nologie s, In c. v. In f o S ma r t

Tech n o l og i es , In c.

, 3 1 2 Ga. Ap p . 4 6 5 , 4 67 (7 1 8 SE2 d 3 5 7 ) (2 0 11 ).

16wh i ch co n tai n s n o l i m i t a t i o n at al l co n cern i n g ei t h er s co pe or t erri to ry

, fai l s as a

m at t er o f l aw u n d er an y

l ev el o f s cru t i n y . See At l an t a Br ea d Co

. I

, 29 2 Ga. Ap p

. at

1 8 -1 9 (2 ) (i n -t erm p ro v is i on t h at wo u l d p rev en t fran ch i s ee fro m wo rk i n g i n an y

cap aci t y i n t h e d el i / b ak ery b u s i n es s

, ev en as a j a n i t o r, was u n reas o nab l e an d

o v erb ro ad ). See al s o Ho wa r d S ch u l t z & A s s o c. v. Br o n iec

, 2 3 9 Ga. 1 8 1, 1 8 4 (2 ) (2 3 6

SE2 d 2 6 5 ) (1 9 7 7) (p o s t

- t e r m co v en an t t h at res t ri ct s an em p l o y ee fro m

en g ag i n g in

em pl o y m en t “ i n an y cap aci t y ,” i s u n reas o n ab l e an d u n en fo rceab l e); Un i -W o r th

En t er p ri s es

, In c. v. W

i l s o n

, 2 44 Ga. 6 3 6, 6 39 (1 ) (2 6 1 SE2 d 5 7 2 ) (1 9 7 9 ) (res t ri ct i v e

co v en an t t h at fai l s t o sp eci fy t h e b u s i n es s act i v i t i es t h e em p l o y ee is fo rb i d d en to

en g ag e i n aft er h i s em

pl o y m en t i s u n reas o n ab l e an d u n en fo rceab l e). At l a n ta B r ea d

Co

. I I

, 2 8 5 G a

. a t 5 9 1 (3 ) (a co v en an t t h at i s n o t li m i ted as t o t erri to ry wi l l b e

i n v al i d at ed ).

Acco rd i ng l y

, we fi n d th at t h e t ri al co u rt erred i n d en y i n g ap p el l an t s ’ m o t i o n

fo r ju d g m en t o n t he pl ead i ng s o n t h e b reach o f co n t ract cl ai m b as ed o n a n a l l e g ed

v i o l at i o n o f Parag rap h 2 o f t h e Co ns u l t i n g Ag reem en t

. 1 3

1 3 In s o ru l i n g

, we em

ph as i ze t hat we d o n o t ex p res s an y o p i n i on as t o t h e o t h er

rem ai n i n g cl ai m s i n t h e cas e, wh i ch are n o t t h e s ub ject o f t h is ap p eal

.

173

. Bas ed o n t he fo reg oi n g

, i t is un n e c e s s ary fo r u s t o co n s i d er ap p el l an t s ’

rem ai n i n g co nt en t i o n t h at th e p ro v i s i o n i s u nen fo rceab l e ag ai n s t Earl y as t h e al t er eg o

o f ISE.

Ju d g men t r ever sed . Ph i p p s , C. J., a n d El l in g t o n , P. J., co n cu r

.

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