Court Opinion

ID: 5141402
Source: CourtListenerOpinion
Date Created: 2021-12-29 19:03:22.250355+00
Date Added: 2024-06-11T08:24:28.962336
License: Public Domain

FIFTH DIVISION
                          RICKMAN, C. J.,
      MCFADDEN, P. J., and SENIOR APPELLATE JUDGE PHIPPS

                   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.
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                                                                 December 29, 2021

In the Court of Appeals of Georgia
 A21A1644. AMERICAN ANESTHESIOLOGY OF GEORGIA,
     LLC v. NORTHSIDE HOSPITAL, INC.

      PHIPPS, Senior Appellate Judge.

      In this action for a declaratory judgment concerning the enforceability of

restrictive covenants, defendant American Anesthesiology of Georgia, LLC (“AAG”)

appeals from the trial court’s order granting the plaintiff’s motion for a judgment on

the pleadings as to Counts One and Two of its complaint.1 AAG contends that the

trial court erred when it ruled that the restrictive covenants at issue here are

unenforceable. For the reasons that follow, we agree and reverse.

      1
         Although the trial court’s order addressed only Counts One and Two of the
plaintiff’s three-count complaint, the court expressly directed the entry of a final
judgment and determined that there is no just reason for delay as to its rulings on
Counts One and Two. See OCGA § 9-11-54 (b).
      AAG is the successor-in-interest to Gwinnett Anesthesia Services, P.C., while

plaintiff Northside Hospital, Inc. d/b/a Northside Hospital Gwinnett and Northside

Hospital Duluth is the successor-in-interest to Gwinnett Hospital System, Inc. For

purposes of this appeal, AAG and its predecessors will be referred to collectively as

“AAG,” and Northside Hospital and its predecessors will be referred to collectively

as “Northside.”

      At issue in this appeal is a 2003 “Professional Services Agreement for

Anesthesia and Pain Management Services” (the “Services Agreement” or

“Agreement”) entered into between AAG and Northside. Under the Services

Agreement, AAG agreed to provide Northside with the services of anesthesiologists

(designated as “Specialists” in the Agreement) and physician assistants, certified

registered nurse anesthetists, and other advanced practice nurses and nurse clinicians

engaged in the specialty of anesthesiology (collectively designated as “Physician

Extenders” in the Agreement) during the initial term and any renewal term of the

Agreement. In return, Northside agreed to grant AAG the exclusive right to perform

the services rendered by the Specialists and Physician Extenders for Northside’s

patients while the Agreement remained in effect.

                                          2
      By its express terms, the Services Agreement did not establish an employer-

employee relationship between Northside (defined in the Agreement as the “System”)

and either AAG (defined as the “Practice”) or its Specialists or Physician Extenders.

In that regard, the Services Agreement states:

      The relation of the Practice, the Specialists, and the Physician Extenders
      with the System shall be that of independent contractors practicing their
      respective professions as medical specialists, and the Practice, the
      Specialists, and the Physician Extenders will at all times be considered
      independent contractors and not employees, agents or partners of the
      System.

      The Services Agreement provisions primarily at issue in this appeal appear in

Sections 9 (a) (“Offers by the Practice”), 9 (b) (“Offers by the System”), and 15 (c)

(“Non-competition and Non-solicitation Covenants”). Section 9 (b) — the

enforceability of which is at issue here — provides, in relevant part:

      Recognizing the special nature of the relationship existing, or that will
      exist, between the Practice and the Specialists and Physician Extenders
      whom it employs or retains in the Practice, and that the recruiting and
      training of Specialists and Physician Extenders by the Practice is a
      costly and time consuming endeavor, the System agrees that it will not,
      without the written consent of the Practice, [while the Agreement is in
      effect and for one year after its termination], directly or indirectly,
      through any manner or means, impair or initiate any attempt to impair

                                          3
      the relationship which exists between the Practice and any Specialists
      or Physician Extenders through offers of employment or offers of
      contracts for services to be rendered by such Specialists or Physician
      Extenders or otherwise.

The parties refer to the above provision as the “no-impairment clause.” Section 9 (b)

further provides that, while the Agreement is in effect and for one year after its

termination, Northside “will not employ or contract with or otherwise permit any

Physician Extender to provide services at the Hospitals[2] without the prior written

consent of the Practice.” The parties refer to this provision as the “no-hire clause.”

      Section 9 (a) similarly provides, in relevant part:

      Recognizing the special nature of the relationship existing, or that will
      exist, between the System and the Department Personnel whom it
      employs or retains in the Department,[3] and that the recruiting and
      training of Department Personnel for the Department by the System is
      a costly and time consuming endeavor, the Practice agrees that it will
      not, without the written consent of the Hospital, [while the Agreement

      2
       The Services Agreement defines “Hospitals” as several specifically identified
medical facilities “and any other facility which is now or in the future may be owned
or operated by [Northside], or any affiliate thereof.”
      3
        In relevant part, the Services Agreement defines (i) “Department” as “the
Anesthesia Department and Pain Management Service of [Northside]”; and
(ii) “Department Personnel” as “the non-physician . . . personnel employed by
[Northside] and assigned to perform services or functions for the Department.”

                                          4
is in effect and for one year after its termination], directly or indirectly,
through any manner or means, impair or initiate any attempt to impair
the relationship which exists between the System and any Department
Personnel through offers of employment or offers of contracts for
services to be rendered by such Department Personnel or otherwise.

A related provision, Section 15 (c), in turn, provides:

Non-competition and Non-solicitation Covenants. The Practice
covenants and agrees that [while the Agreement is in effect and for one
year after its termination] by the System with cause or by the Practice
without cause, the Practice shall not, on its own behalf or on behalf of
any person[ or entity] (“Person”):

       (i) engage in the practice of professional anesthesiology services
       within the Service Area [defined as “Gwinnett County, Georgia”]
       (except with respect to those obligations to which the System has
       expressly consented in writing . . .). The Practice acknowledges
       and agrees that: (A) this covenant is intended to protect the
       investment the System has made and will continue to make in
       establishing the Department, the role of the Practice and the
       Specialists in the Department[ and] the System, and (B) the
       restrictions contained herein are reasonable in terms of duration,
       scope and geographic area; [or]

       (ii) solicit, recruit, or induce any employee or independent
       contractor of the System who is actively employed or otherwise
       engaged by [the] System and who was employed by or otherwise

                                     5
             engaged by [the] System at any time during the initial term or any
             renewal term of this Agreement to sever his or her relationship
             with [the] System or to be employed or otherwise engaged in any
             capacity by any other Person conducting a business of practicing
             medicine.

      By its terms, the Services Agreement automatically renewed each year until

AAG’s parent company gave notice in August 2020 that it intended to terminate the

Agreement on December 4, 2020. In November 2020, Northside filed this action

seeking a judgment declaring that the no-impairment and no-hire clauses in the

Services Agreement are unenforceable and therefore do not bar Northside from

seeking to employ medical providers who have rendered services to Northside

(through AAG) under the Agreement. Northside attached a copy of the Agreement

to its complaint.

      The case proceeded to a bifurcated bench trial, in which the parties first

addressed Counts One and Two of Northside’s complaint, which challenged the

enforceability of the no-impairment and no-hire clauses, respectively. After Northside

rested on Counts One and Two, it moved for a judgment on the pleadings as to those

                                          6
counts.4 In its order granting Northside’s motion, the trial court first concluded that

it was required to apply “strict scrutiny” to the no-impairment and no-hire clauses.5

The court further determined that the no-hire clause is unenforceable because it bars

Northside from even unsolicited contact with AAG personnel. On that basis, the court

ruled that the no-impairment clause likewise is unenforceable. Finally, the court

concluded that both covenants failed even if they were subject only to “mid-level

scrutiny.” This appeal followed.

      We review de novo a trial court’s ruling on a motion for a judgment on the

pleadings, accepting all well-pled material allegations of the opposing party’s

pleading as true, and taking all allegations of the moving party which have been

denied as false. See Polo Golf & Country Club Homeowners Assn. v. Cunard, 306

Ga. 788, 791-792 (2) (833 SE2d 505) (2019). A judgment on the pleadings should be

granted “only where there is a complete failure to state a cause of action or defense.”

Pressley v. Maxwell, 242 Ga. 360, 360 (249 SE2d 49) (1978). “[I]n considering a

motion for judgment on the pleadings, a trial court may consider exhibits attached to

      4
        It is unclear on the current record why Northside did not seek a judgment on
the pleadings before trial. AAG also made an oral motion to dismiss Counts One and
Two, which the trial court denied.
      5
          The concept of “scrutiny” in this context is addressed later in this opinion.

                                            7
and incorporated into the pleadings, including exhibits attached to the complaint or

the answer.” BCM Constr. Group v. Williams, 353 Ga. App. 811, 812 (840 SE2d 51)

(2020) (citation and punctuation omitted).

      The enforceability of a restrictive covenant is a question of law that we also

review de novo, Holland Ins. Group v. Senior Life Ins. Co., 329 Ga. App. 834, 837

(1) (766 SE2d 187) (2014), “looking solely to the language of the restrictive

covenant.” Uni-Worth Enterprises v. Wilson, 244 Ga. 636, 641 (2) (261 SE2d 572)

(1979). We review the enforceability of restrictive covenants entered into before May

11, 2011 (as is the case here), based on the law as it stood at that time, before the

enactment of Georgia’s Restrictive Covenants Act, OCGA § 13-8-50 et seq. Burson

v. Milton Hall Surgical Assoc., 343 Ga. App. 159, 160-161 (806 SE2d 239) (2017);

see Ga. L. 2011, pp. 399, 409 § 5. Before that date, Georgia law disfavored restrictive

covenants, and the Georgia Constitution forbade the General Assembly from

authorizing them. Burson, 343 Ga. App. at 161; see also Rash v. Toccoa Clinic Med.

Assoc., 253 Ga. 322, 323 (1) (320 SE2d 170) (1984) (observing, under the former

law, that contracts in general restraint of trade are unenforceable as contrary to public

policy).

                                           8
      Nevertheless, while a restrictive covenant may be unenforceable as an

impermissible restraint on trade, it will be upheld “if the restraint imposed is not

unreasonable, is founded on a valuable consideration, . . . is reasonably necessary to

protect the interest of the party in whose favor it is imposed, and does not unduly

prejudice the interests of the public.” West Coast Cambridge v. Rice, 262 Ga. App.

106, 108 (1) (584 SE2d 696) (2003) (citation and punctuation omitted); accord Habif,

Arogeti & Wynne, P.C. v. Baggett, 231 Ga. App. 289, 292 (2) (498 SE2d 346) (1998)

(a restrictive covenant in an employment contract, such as a non-solicit or non-

compete covenant, “is considered in partial restraint of trade and will be enforced if

reasonable”). To determine whether a restraint affecting employment is reasonable,

a court must consider “the nature and extent of the trade or business, the situation of

the parties, and all the other circumstances. A three-element test of duration,

territorial coverage, and scope of activity has evolved as a helpful tool in examining

the reasonableness of the particular factual setting to which it is applied.” Habif,

Arogeti & Wynne, 231 Ga. App. at 292 (2) (citation and punctuation omitted).

      In assessing reasonableness, Georgia courts apply three levels of scrutiny to

restrictive covenants: (i) covenants ancillary to employment contracts receive strict

scrutiny; (ii) covenants found in professional partnership agreements receive a middle

                                          9
level of scrutiny; and (iii) covenants ancillary to the sale of a business receive much

less scrutiny. Swartz Investments v. Vion Pharmaceuticals, 252 Ga. App. 365, 368 (2)

(556 SE2d 460) (2001); accord West Coast Cambridge, 262 Ga. App. at 108 (1). Not

every contract, however, neatly fits into one of these three categories. Swartz

Investments, 252 Ga. App. at 368 (2). And the type of contract does not automatically

determine the level of scrutiny. Id.

             Rather, we must look to the purposes behind the varying levels of
      scrutiny to determine which level is most appropriate for the contract
      before us. One starting point is the relative bargaining power of the
      parties: [t]he rationale behind the distinction in analyzing covenants not
      to compete is that a contract of employment inherently involves parties
      of unequal bargaining power to the extent that the result is often a
      contract of adhesion. On the other hand, a contract for the sale of a
      business interest is far more likely to be one entered into by parties on
      equal footing. The unequal bargaining power in the employment context
      is one reason covenants in employment agreements are given increased
      scrutiny.

Id. at 368-369 (2) (citations and punctuation omitted); see also Rash, 253 Ga. at 325

(2) (while an employee enters into an employment agreement “at a great bargaining

disadvantage,” that “would not be expected to be the case in a professional

partnership arrangement”).

                                          10
      Another relevant factor is “whether there is independent consideration for the

restrictive covenant itself.” Swartz Investments, 252 Ga. App. at 369 (2). In that

regard, in an employment agreement,

      an employee generally receives no consideration separate from his
      employment for a restrictive covenant . . . . On the other hand, in a
      partnership agreement a partner has not only restricted himself, but he
      has also exacted from each of the other contracting parties a like
      restriction. The lack of consideration for an employee’s restrictive
      covenant is an additional justification for subjecting employment
      agreements to heightened scrutiny.

Id. (citation and punctuation omitted); accord Rash, 253 Ga. at 325-326 (2).

      Thus, even where a contract is denominated an “employment contract,” it may

be treated as a partnership agreement for purposes of determining the level of scrutiny

to be applied where the parties have relatively equal bargaining power and extract

similar, mutual restrictions from each other, with attendant mutual advantages. See

Pittman v. Harbin Clinic Professional Assn., 210 Ga. App. 767, 769-770 (1) (437

SE2d 619) (1993). And where these factors are present, they “weigh in favor of the

enforceability of restrictive covenants.” Physician Specialists in Anesthesia, P.C. v.

MacNeill, 246 Ga. App. 398, 402 (2) (a) (539 SE2d 216) (2000). With this

background, we turn to AAG’s claims on appeal.

                                          11
       1. AAG first challenges the trial court’s determination that strict scrutiny

applies here. The trial court based its ruling in this regard entirely on the fact that the

Services Agreement designates AAG as an “independent contractor” of Northside

and therefore must be treated as an employment agreement. The decisions on which

the trial court relied, however, do not support its conclusion on this issue.

       The first case cited by the trial court — Paragon Technologies v. InfoSmart

Technologies, 312 Ga. App. 465 (718 SE2d 357) (2011) — involved an “independent

contractor agreement” pursuant to which InfoSmart provided staffing to a Paragon

client. Id. at 465-466. The agreement at issue included a restrictive covenant that

barred InfoSmart from interfering with Paragon’s relationship with its client and from

accepting an offer to provide services directly to the client during the term of the

agreement and for one year thereafter. Id. at 466. When InfoSmart began providing

services directly to Paragon’s client, litigation ensued, and Paragon sought to enforce

the restrictive covenant. See id. In affirming the grant of summary judgment in favor

of InfoSmart, this Court concluded that: (i) the restrictive covenant was subject to

strict scrutiny because it “was included in an independent contractor agreement,”

which generally is treated like an employment contract for such purposes; and (ii) the

covenant was unenforceable because it “precluded InfoSmart from accepting

                                            12
unsolicited work from Paragon’s former client.” Id. at 467. Importantly, this Court

highlighted that the application of strict scrutiny also was supported by “[a] lack of

evidence showing any consideration for the restrictive covenant, as well as the

one-sided nature of the contract,” which gave Paragon ownership of all intellectual

property created under the agreement, included indemnity and hold harmless

provisions in Paragon’s favor, and appeared to have been drafted by Paragon. See id.

at 466, 467, n. 1.

      Contrary to the trial court’s ruling here, Paragon Technologies does not stand

for the proposition that the designation of an agreement as an “independent contractor

agreement” — without more — automatically requires the application of strict

scrutiny. Rather, the decision in Paragon Technologies must be read as limited by its

facts, under which multiple factors supported the application of strict scrutiny. See

312 Ga. App. at 466-467 & n. 1; see also Cline Drive Land Trust v. Wells Fargo

Bank, N. A., 339 Ga. App. 342, 345 (793 SE2d 550) (2016) (“A decision’s holding

is limited to the factual context of the case being decided and the issues that context

necessarily raises. Language that sounds like a holding — but actually exceeds the

scope of the case’s factual context — is not a holding no matter how much it sounds

like one.”) (citation and punctuation omitted). Our conclusion in that regard is in

                                          13
accord with the proposition that it is the substance of a contract and the parties’

relationships — rather than any names given to them — that determine the level of

scrutiny to be applied. See Pittman, 210 Ga. App. at 769-770 (1).

       The second case cited by the trial court in support of its application of strict

scrutiny — Jenkins v. Jenkins Irrigation, 244 Ga. 95 (259 SE2d 47) (1979) —

involved neither an employment contract nor an independent contractor agreement,

but rather addressed a covenant not to compete in the sale of business assets, and thus

has no application here. Id. at 99 (2).

       The last case cited by the trial court — Anesthesia Healthcare Partners v.

Anesthesia Healthcare Solutions of North Florida, No. 3:11cv149/MCR/EMT, 2012

WL 13024036 (N.D. Fla. Sept. 19, 2012) (“AHP”) — also does not support the

court’s ruling that strict scrutiny applies here, for two reasons. First, after finding that

the case before it involved an independent contractor agreement, the federal district

court in AHP summarily concluded that strict scrutiny applied solely in reliance on

Paragon Technologies, 312 Ga. App. 465. AHP, 2012 WL 13024036 at *4 (B) (1).

As stated above, however, the holding in Paragon Technologies does not reach that

far. Second, the AHP court also found that the covenant not to compete at issue in that

case was unenforceable because, among other reasons, it conferred no benefit on the

                                            14
party seeking to enforce the covenant. 2012 WL 13024036 at *6. Here, however, the

Agreement explicitly identifies the benefits each party seeks to protect via the mutual

covenants: protection of the “special . . . relationship[s]” each party has with its own

personnel, the “recruiting and training” of whom are “costly and time consuming

endeavor[s].”

      As discussed above, the level of scrutiny to be applied does not “automatically”

depend on the “type of contract,” but rather depends on the “purposes behind the

varying levels of scrutiny.” Swartz Investments, 252 Ga. App. at 368-369 (2). And

two starting points for making that determination are “the relative bargaining power

of the parties” and “whether there is independent consideration for the restrictive

covenant itself.” Id. at 369 (2). Here, both factors weigh in favor of treating the

Agreement as a partnership agreement and applying mid-level scrutiny.

      First, Northside points to nothing in the record suggesting that it and AAG did

not possess relatively equal bargaining power when each business entity, represented

by counsel, entered into the Agreement. In fact, the plain text of the Agreement —

which extracts mutual considerations from each party — is indicative of equal

bargaining power. In addition, the face of the Agreement contains no indication that

it was drafted primarily by either party, and neither party suggests that was the case.

                                          15
      Second, the existence of mutual concessions also establishes independent

consideration for the restrictive covenants: in return for Northside’s agreement not

to poach AAG personnel for one year after termination of the Agreement, AAG

agreed not to poach Northside personnel or engage in the practice of anesthesiology

in Gwinnett County during that time.6 See Celtic Maintenance Svcs. v. Garrett

Aviation Svcs., No. CV 106-177, 2007 WL 4557775, at *3 (II) (S.D. Ga. Dec. 21,

2007) (concluding that a non-recruitment provision in a maintenance service

agreement was subject only to intermediate scrutiny because there was no issue of

unequal bargaining power, and the agreement “bound both [parties] not to pirate each

other’s employees”); see also generally Dougherty, McKinnon & Luby, P.C. v.

Greenwald, Denzik & Davis, P.C., 213 Ga. App. 891, 894 (2) (a) (447 SE2d 94)

(1994) (recognizing that a business has a “legitimate need to protect itself from the

risk” that a former employee may take advantage of confidences and rapport with

      6
         Northside’s passing, conclusory assertion that there is no independent
consideration for the no-hire clause because only the no-impairment clause applies
to both parties splits one hair too many. While each clause is directed toward slightly
different conduct, both, at their core, prohibit employee-poaching for the same period
of time and apply equally to both parties. Regardless, any potential imbalance (in
AAG’s favor) between Section 9 (a) and Section 9 (b) in that regard is re-balanced
by Section 15 (c), which bars AAG from practicing anesthesiology in Gwinnett
County and inducing any Northside personnel to leave Northside to practice medicine
elsewhere for one year following the termination of the Agreement.

                                          16
clients obtained during his employment “to appropriate or ‘pirate’ such clients for

[his] own benefit”).

      In light of the above, neither party here bears any resemblance to an individual

independent contractor with no bargaining power subject to an employment

agreement in which the only benefit to the individual is a job. See Rash, 253 Ga. at

325-326 (2); id. at 326 (2) (“[I]nequality of bargaining power is a determining factor

in judging the reasonableness of a restrictive covenant . . . .”); Swartz Investments,

252 Ga. App. at 368-369 (2); Celtic Maintenance Svcs., 2007 WL 4557775, at *3 (II).

Consequently, the Agreement’s designation of AAG as an “independent contractor[]”

weighs little in our analysis. Moreover, given the parties’ relatively equal bargaining

positions and the mutual considerations in the Agreement — including the mutual and

independent considerations with respect to the restrictive covenants — we hold that

the Agreement is more akin to a partnership agreement than an employment contract,

thereby subjecting its restrictive covenants to mid-level scrutiny. See Rash, 253 Ga.

at 325-326 (2); Swartz Investments, 252 Ga. App. at 368 (2); accord Habif, Arogeti

& Wynne, 231 Ga. App. at 290-291 (1) (applying mid-level scrutiny to an

employment agreement of an accountant who “was in a bargaining position

equivalent to that of” his former employer, where all parties to the agreement were

                                          17
subject to “identical restrictive covenants”); Pittman, 210 Ga. App. at 769-770 (1)

(concluding that the employment contracts at issue were “more usefully viewed as

. . . partnership agreements,” given the parties’ equal bargaining power and the fact

that the agreements extracted mutual restrictions on all parties, with attendant mutual

benefits); Roberts v. Tifton Med. Clinic, P.C., 206 Ga. App. 612, 612-613, 616-617

(426 SE2d 188) (1992) (holding that an employment agreement executed by a clinic’s

physician-shareholder was more analogous to a partnership agreement, and upholding

a restrictive covenant in that agreement barring the physician from practicing

medicine within twenty-five miles of a clinic facility for two years after termination

of employment); Celtic Maintenance Svcs., 2007 WL 4557775, at *3 (II). The trial

court therefore erred when it applied strict scrutiny here.

      2. AAG next challenges the trial court’s conclusion that the no-hire clause is

unenforceable. The trial court concluded that this provision is invalid for the sole

reason that “it bars [Northside] from even unsolicited contact with AAG’s

employees.” We conclude that the trial also erred in this ruling.

      (a) Applying mid-level scrutiny, in a whole-court decision, we upheld the

validity of a restrictive covenant barring a former shareholder and officer in an

accounting firm from rendering accounting services in a seven-county area for a

                                          18
period of two years following his departure from the firm. See Habif, Arogeti &

Wynne, 231 Ga. App. at 291-297 (2). Critically, in that decision, we expressly

rejected the former shareholder’s claim that the covenant was unreasonable because

it barred him from accepting unsolicited business. Id. at 295-297 (2) (c).

      Similarly, and also applying mid-level scrutiny, the Supreme Court of Georgia

upheld the validity of a restrictive covenant barring a party from practicing medicine

within twenty-five miles of a city, for a period of three years after termination of his

employment. See Rash, 253 Ga. at 322-323, 325-326 (2). This Court likewise found

that a restrictive covenant that barred a physician from practicing medicine within

twenty-five miles of a facility operated by his former employer, for two years after

termination of his employment, was enforceable under mid-level scrutiny. See

Roberts, 206 Ga. App. at 612-613, 616-617. And in Pittman, 210 Ga. App. at 769-770

(1), we upheld a covenant barring two physicians from practicing medicine within a

thirty-mile radius of a clinic in Rome, for a period of one year after leaving

employment at the clinic, also applying mid-level scrutiny.7 Notably, each of these

      7
         Although our decision in Pittman did not explicitly identify the scrutiny we
applied as “mid-level,” we implicitly did so when we recognized that: (i) the
employment contracts at issue were more properly viewed as partnership agreements;
and (ii) consideration of the differences between professional partnership agreements
and employment contracts “weighs in favor of the enforceability of restrictive

                                          19
decisions upheld broad bans on “practicing medicine,” without regard to whether any

potential future patients covered by the bans unilaterally sought out medical care

without prior solicitation by the physicians.8

      Nevertheless, in Carson v. Obor Holding Co., 318 Ga. App. 645 (734 SE2d

477) (2012), this Court found that a restrictive covenant barring a former employee

from accepting business from any of his former employee’s clients was unenforceable

even under mid-level scrutiny because: (i) “it contain[ed] no territorial restriction, a

fatal flaw”; and (ii) the prohibition on accepting unsolicited business “violates

covenants in the former, and against their enforceability in the latter.” 210 Ga. App.
at 769 (1).
      8
         In Delli-Gatti v. Mansfield, 223 Ga. App. 76, 77-81 (1)-(3) (477 SE2d 134)
(1996), we similarly upheld a covenant barring a physician from providing medical
care within a single county for one year following the termination of a medical
services agreement. Our decision in Delli-Gatti did not explicitly identify the level
of scrutiny applied, although we highlighted that the employment contract at issue
included a “future option to form a partnership.” 223 Ga. App. at 77 (1). And in
McAlpin v. Coweta Fayette Surgical Assoc. P.C., 217 Ga. App. 669, 670, 673 (2)
(458 SE2d 499) (1995), we upheld a covenant barring a physician from “engag[ing]
in the practice of medicine” within a ten-county area for a period of two years
following the termination of his employment contract, which contemplated a future
partnership. (Punctuation omitted.) While we also did not explicitly identify the level
of scrutiny applied in McAlpin, we highlighted the “distinction between consideration
of restrictive covenants in employer/employee situations as opposed to a partnership
situation, with the former requiring a stricter scrutiny in determining the
reasonableness of the restrictions.” 217 Ga. App. at 672 (2).

                                          20
Georgia public policy because it unreasonably impacts the restricted party’s ability

to make a living and the public’s ability to choose the business or professional it

prefers to contract with.” Id. at 650-651 (1) (b) (citation and punctuation omitted).

When viewed in context with the decisions in Rash, 253 Ga. 322, Habif, Arogeti &

Wynne, 231 Ga. App. 289, Pittman, 210 Ga. App. 767, and Roberts, 206 Ga. App.

612, we read the holding in Carson as limited to its specific factual context. See Cline

Drive Land Trust, 339 Ga. App. at 345. And so viewed, the ruling in Carson that

prohibitions on unsolicited conduct do not survive mid-level scrutiny must be read

in conjunction with the absence of territorial limits in that case and in the context of

accepting unsolicited business from a former employer’s clients. Accord OnBrand

Media v. Codex Consulting, 301 Ga. App. 141, 146 (2) (a) (ii) (687 SE2d 168) (2009)

(holding that, under mid-level scrutiny, a covenant not to compete was unenforceable

because it contained “no specific territorial limits [or] any clear limits on the scope

of the prohibited activity”).

      Unlike in Carson, the covenants at issue here address employee-poaching, and

not client- or business-poaching. This distinction is critical. Territorial limits

necessarily play a role in balancing the interests of an employer in protecting the

                                          21
territory in which it conducts business against a former employee’s interests in being

able to support herself. That is because

      [t]he goal of a non-competition covenant is to balance two competing
      rights: first, the employee’s right to earn a living and his ability to
      determine with certainty the prohibited territory; second, the employer’s
      interest in customer relationships created or furthered by its former
      employee on its behalf and its right to protect itself from the former
      employee’s possible unfair appropriation of contacts developed while
      working for the employer. Under this analysis, an employer is permitted
      to include in such a covenant the territory in which the employee has in
      fact performed work.

Habif, Arogeti & Wynne, 231 Ga. App. at 292-293 (2) (b) (citation and punctuation

omitted).

      In the context of employee-poaching, however, it matters not whether one’s

employee is hired away to work across the street or across the globe — the harm to

the employer is the same in either case, as is implicitly recognized in the Agreement

provisions to the effect that recruiting and training of each party’s personnel “is a

costly and time consuming endeavor.” See Harrison v. Sarah Coventry, Inc., 228 Ga.

169, 170-172 (1) (184 SE2d 448) (1971) (upholding a covenant barring the appellants

from “solicit[ing] or in any manner attempt[ing] to induce [their former employer]’s

                                           22
salespeople or employees to leave the company,” even absent a territorial limitation)

(punctuation omitted); Sanford v. RDA Consultants, 244 Ga. App. 308, 309, 311 (2)

(535 SE2d 321) (2000) (upholding a covenant barring the appellant from

“attempt[ing] to employ or assist any other person in employing or soliciting for

employment” any of his prior employer’s employees for one year after his

employment ended, despite the absence of a territorial limitation); Celtic Maintenance

Svcs., 2007 WL 4557775, at *4-5 (II) (concluding that an agreement between two

entities not to poach each other’s employees was enforceable under Georgia law,

despite the absence of a territorial limitation); see also Chaichimansour v. Pets Are

People Too, No. 2, 226 Ga. App. 69, 71 (1) (485 SE2d 248) (1997) (observing that

“if the scope of prohibited behavior is narrow enough . . . , the covenant may be

reasonable even if it has no territorial limitation”); see also generally Habif, Arogeti

& Wynne, 231 Ga. App. at 295 (2) (c) (recognizing that “[a] covenant not to compete

. . . is designed primarily to protect the employer’s investment of time and money in

developing the employee’s skills”). This distinction is even more critical given the

facts of this case, which does not involve an employer and employee, but rather

concerns two employers who have mutually agreed not to “pirate” each other’s

personnel for a limited period of time. For this reason, a territorial limit would be

                                          23
largely (if not entirely) superfluous, as the very nature of the covenants at issue here

— which bar only the two parties to the Services Agreement from hiring only each

other’s personnel — is necessarily narrowly limited in a manner that would be largely

analogous to a territorial limitation.9 Consequently, territorial limits play no role in

our analysis on the particular facts presented here, and the decision in Carson does

not control the outcome of this case.10

      Notably, neither party has cited, and research has not revealed, any Georgia

appellate decisions other than Carson in which bans on unsolicited contact were

determinative under mid-level scrutiny.11 And for the reasons stated above, when

      9
          Regardless, the covenants here necessarily (although implicitly) are
territorially limited. Given that Northside operates only in Gwinnett County , the
covenants at issue here — which prohibit AAG from operating in Gwinnett County
within one year of the Agreement’s expiration — bar Northside from hiring AAG
personnel only in Gwinnett County and similarly bar AAG from poaching Northside
employees only out of Gwinnett County.
      10
         As a result, Northside’s passing, conclusory suggestion that the territory here
is insufficiently limited because Northside potentially could acquire or “expand to
new,” unidentified “locations” (presumably outside of Gwinnett County) at some
unidentified point in the future — which assumes what it seeks to establish — is
irrelevant to our analysis.
      11
         Each of the decisions on which the trial court relied in concluding that the
ban on unsolicited contact renders the covenants here unenforceable applied strict
scrutiny and thus do not apply here, for the reasons stated in Division 1, above. See
Burson, 343 Ga. App. at 165 (1) (b); Paragon Technologies, 312 Ga. App. at 467;

                                          24
Carson is properly read in the context of its facts and in conjunction with the

decisions in Rash, 253 Ga. 322, Habif, Arogeti & Wynne, 231 Ga. App. 289, Pittman,

210 Ga. App. 767, and Roberts, 206 Ga. App. 612, the decision in Carson does not

support the trial court’s ruling here that the bans on unsolicited contact with each

party’s former employees, standing alone, render the covenants unenforceable under

mid-level scrutiny. Given the particular interests at issue in the employee-poaching

context presented in this case, we hold that the ban on unsolicited contact does not

render the no-hire clause unenforceable under mid-level scrutiny.12 See Rash, 253 Ga.

Cox v. Altus Healthcare & Hospice, 308 Ga. App. 28, 31 (2) (a) (706 SE2d 660)
(2011). While American Gen. Life & Acc. Ins. Co. v. Fisher, 208 Ga. App. 282 (430
SE2d 166) (1993) (physical precedent only), also cited by the trial court, did not
explicitly refer to the level of scrutiny applied, it implicitly applied strict scrutiny
when it held that the invalidity of one non-competition clause rendered the whole
agreement invalid. Id. at 284 (2); see also Swartz Investments, 252 Ga. App. at 368
(2) (covenants subject to strict scrutiny cannot be “blue-penciled”).
      12
         On a related note, the covenants at issue here are more properly viewed as
analogous to covenants not to compete — “which [are] designed primarily to protect
the employer’s investment of time and money in developing the employee’s skills”
— rather than covenants not to solicit — “which [are] designed primarily to protect
the employer’s investment of time and money in developing customer relationships.”
See Habif, Arogeti & Wynne, 231 Ga. App. at 295 (2) (c) (citation and punctuation
omitted). And a covenant not to compete “may preclude the employee from accepting
related business (whether solicited or not) from any clients (whether previously
contacted by him or not) if the employee is officed in, or is to perform the restricted
activities in, the forbidden territory.” Id.; accord Chaichimansour, 226 Ga. App. at
70-72 (holding valid a covenant not to compete barring an employee from working

                                          25
at 322-323, 325-326 (2); Habif, Arogeti & Wynne, 231 Ga. App. at 291-297 (2);

Pittman, 210 Ga. App. at 769-770 (1); Roberts, 206 Ga. App. at 612-613, 616-617.

      (b) It appears that the trial court found no need to engage in further analysis in

light of its conclusion that bans on unsolicited contact (under the “scope of activity”

prong of the three-part test identified in Habif, Arogeti & Wynne, 231 Ga. App. at 292

(2)) disposed of the enforceability of the no-hire clause. Aside from the bans on

unsolicited contact, the trial court did not find any further problems with the scope

of prohibited conduct, and Northside identifies no other issues concerning the scope

of prohibited conduct in the covenants at issue here. Because the material facts are

undisputed, and in the interest of judicial economy, we exercise our discretion to

decide the remaining issues, rather than directing the trial court to address them in the

first instance on remand. See J. M. High Co. v. Arrington, 45 Ga. App. 392, 392 (3)

(165 SE 151) (1932) (where the material facts are undisputed and the issue on appeal

is a question of law, “it is unnecessary to send the case back for another hearing in the

trial court”); accord Ingraham v. Marr, 246 Ga. App. 445, 447 (2) (540 SE2d 652)

(2000).

as a veterinarian in a limited territory, even though the covenant necessarily
prevented the employee from accepting unsolicited business).

                                           26
      As we have already determined that territorial limits play no role in our

analysis on the particular facts of this case, we are left only to address whether the

duration of the covenants is reasonable. As discussed above, both the Supreme Court

and this Court have approved of two- and three-year prohibitions on practicing

medicine. See Rash, 253 Ga. at 322-323, 325-326 (2); Habif, Arogeti & Wynne, 231

Ga. App. at 292 (2) (a); Roberts, 206 Ga. App. at 612-613, 616-617. And neither

party has cited any authority indicating that these time limits would not be equally

reasonable in the employee-poaching context. We therefore conclude that the one-

year limitation at issue here is reasonable. See Rash, 253 Ga. at 322-323, 325-326 (2);

Habif, Arogeti & Wynne, 231 Ga. App. at 292 (2) (a); Roberts, 206 Ga. App. at 612-

613, 616-617.

      (c) We now turn to Northside’s contention that the no-hire clause is

unenforceable because it does not protect a legitimate business interest of AAG. See

Habif, Arogeti & Wynne, 231 Ga. App. at 294 (2) (c) (“The restricted activities must

be reasonably related to the business interests the employer seeks to protect.”).

Northside’s claim in this regard relies on the proposition that, because the Agreement

prohibits AAG from engaging in the practice of anesthesiology in Gwinnett County

for one year following the termination of the Agreement, AAG has no legitimate

                                          27
interest in keeping its personnel from working in Gwinnett County during that time.

Contrary to Northside’s argument, however, the interest AAG seeks to protect

concerns the considerable resources it has expended to recruit and train personnel that

it does not want poached — by its very nature, that interest is not limited to Gwinnett

County. And Northside’s reliance on decisions in which enforcement of a covenant

would benefit only one party also is misplaced, as the Agreement here equally

benefits Northside by preventing AAG from poaching Northside employees during

the same time period.

      (d) Finally, Northside contends that the no-hire clause is unenforceable because

it “unduly prejudices the interests of the public.” In that regard, Northside maintains

that “[t]he community” would suffer unidentified negative effects were Northside to

lose all of its current anesthesiology staff. As observed by the Supreme Court,

however, one community’s temporary loss is another community’s gain when medical

professionals are subject to bargained-for contractual restrictions on practicing in a

certain area. In that vein, the Court highlighted in Rash, 253 Ga. at 326 (3), that,

while enforcing a covenant restricting medical professionals’ ability to practice in one

area would limit the right of potential patients in that area to avail themselves of the

professionals’ services, it also “would afford countless other people in other areas,

                                          28
both in and outside of the state, the opportunity to have [such professionals] in their

areas.” On that basis, the Court found that there was no reason to conclude that the

need for a certain professional’s services in a certain area was “sufficient to outweigh

the law’s interest in upholding and protecting freedom to contract and to enforce

contractual rights and obligations.” Id. On a related note, “Georgia case law, as well

as that of other jurisdictions, has established that covenants such as the ones in issue”

— i.e., in medical professional partnership agreements — “do not conflict with

medical ethical principles or Georgia law requiring informed consent or injure the

public in general.” Pittman, 210 Ga. App. at 770 (3).

      To the extent that Northside contends that the particular factual context

presented here weighs against enforcing the covenants — e.g., that Northside will be

unable to replace its anesthesiology staff without hiring AAG employees, or that, for

any other similar reason, Gwinnett County in particular will suffer undue harm by

enforcement of the no-hire clause at this particular time — any such issues are not

relevant to the trial court’s ruling or our analysis in the context of a motion for a

judgment on the pleadings, as our review is limited to the pleadings (and exhibits

attached thereto) and the language of the restrictive covenants at issue. See

Uni-Worth Enterprises, 244 Ga. at 641 (2); BCM Constr. Group, 353 Ga. App. at

                                           29
812. And on a similar note, Northside’s conclusory assertion that AAG’s personnel

will be “unable to make a living if AAG prevail[s]” also raises a factual issue that

plays no role in our analysis on the current procedural posture.13 See Uni-Worth

Enterprises, 244 Ga. at 641 (2); BCM Constr. Group, 353 Ga. App. at 812. For each

of the above reasons, the trial court erred when it concluded that the no-hire provision

is unenforceable and granted a judgment on the pleadings to Northside on that basis.

      13
         We take this opportunity to highlight that we are not asked here to address
agreements between any individual practitioners, on the one hand, and Northside or
AAG, on the other hand, and we express no opinion on the extent to which our
analysis in this decision would be relevant to any such agreements. We likewise
express no opinion on the potential merits of any challenge that an individual
practitioner may raise to the Services Agreement. We rather address only the ability
of AAG to enforce the Agreement with respect to Northside in this declaratory
judgment proceeding. See Celtic Maintenance Svcs., 2007 WL 4557775, at *4 (II)
(highlighting that the purpose of the non-recruitment provision then at issue before
the court “was not to foreclose [the plaintiff’s] employees from competing or
practicing their chosen trade or profession, but to prevent [the defendant] from
poaching [the plaintiff]’s workers and thereby rendering [the plaintiff] an involuntary
and unpaid employment agency”) (citation and punctuation omitted). Moreover,
because we are not tasked with addressing the interests of any individual
practitioners, we also express no opinion on (a) what type of relief — if any — may
be available to either party for any potential breach of the Agreement by the other or
(b) the merits of any potential challenge that AAG or Northside personnel may have
to the Agreement or to any agreement that individual practitioners may have with
either party. Indeed, Northside itself urges us to “disregard . . . matters outside the
pleadings.”

                                          30
      3. Given our rulings in Division 2, the trial court necessarily erred when it

found that the no-impairment clause may not be enforced based entirely on the court’s

finding that the no-hire clause is unenforceable. And Northside does not elaborate any

arguments as to (a) how the no-impairment clause differs materially from the no-hire

clause for purposes of the analysis in this decision or (b) why we should find the no-

impairment clause unenforceable on its own terms.14 We therefore reverse the trial

court’s ruling on this issue

as well, and remand this case to the trial court for further proceedings consistent with

this opinion.

      Judgment reversed and case remanded. Rickman, C. J., and McFadden, P. J.,

concur.

      14
         Notably, as discussed above, while each clause is directed toward slightly
different conduct, both, at their core, prohibit employee-poaching for the same period
of time, and we see no reason why the no-impairment clause would not be subject to
the same analysis as the no-hire clause. See note 6, above. Northside essentially
concurs in this assessment by contending that “[t]he no-impairment provision
operates the same as the no-hire provision; it would prohibit Northside from making
any offers of employment or offers of contracts to AAG’s employees, even if
Northside did not recruit them” and that the “same rationale” applies to the question
of whether each clause is enforceable. (Punctuation omitted.)

                                          31