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Coffee Sys. of Atlanta v. Fox - 226 Ga. 593, 176 S.E.2d 71 (1970)

Rule:

In determining whether a restrictive covenant is reasonable, courts consider the restraint in the activity of the employee, or former employee, imposed by the contract; the territorial or geographic restraint; and the length of time during which the covenant seeks to impose the restraint.

Facts:

Plaintiff Coffee System of Atlanta brought an action to enforce the terms of restrictive covenant in employment agreement restraining defendants Fox and Intercontinental Coffee Service Plan from engaging in competitive activities during the term and for one year following Fox's employment with Coffee System. The superior court dismissed the complaint, and plaintiff Coffee System appealed.

Issue:

Is the restrictive covenant in defendant’s employment agreement reasonable and enforceable?

Answer:

Yes.

Conclusion:

The court reversed and found that the complaint sufficiently stated a cause of action, concluding that the time limitation within which defendant Fox, a former employee, could not engage in a competitive employment or enterprise was reasonable and did not render the contract void. The contract did not restrict Fox from accepting employment with a competitor, so long as such employment did not involve the direct or indirect solicitation of plaintiff's customers. The restraint imposed was no more than reasonably necessary to afford protection to the plaintiff's interests and was not unduly oppressive of the defendant.

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