Prior to the enactment of Georgia’s Restrictive Covenant Act (GRCA), Georgia courts uniformly struck down noncompete provisions that used “in any capacity language”, i.e., a noncompete that prohibited an employee from working for a competitor in any capacity and not limited to the services that the employee performed for his former employer. In the past year, Georgia’s Court of Appeals has rendered differing decisions concerning the enforcement of “in any capacity” noncompetes.
- In All States AG Parts, LLC v. Herzig (February 2025), the Georgia Court of Appeals followed the pre-GRCA rationale and struck down what it deemed to be an overbroad noncompete. The provision at issue prohibited the employee from “directly or indirectly, alone or in association with any other person, firm, corporation or other business organization be employed by, perform services for, or otherwise associate with in any capacity (including without limitation, as investor, owner, lender, consultant, contractor, joint venturer or partner) with [sic] any person that is engaged in a business that is the same or substantially similar to or in competition with that of the ASAP Business.” The Court held “that non-compete clauses that ‘do not list specific limits on the type of activity, and effectively bar former employees from working in any capacity for competitors’ are unreasonable and overbroad.” It cited the Court of Appeal’s decision Burbach v. Motorsports of Conyers, which was vacated by the Georgia Supreme Court but not on the decision that an “in any capacity” noncompete is unenforceable.
- In Falcon Ridge v. Leon (August 2025), on the other hand, the Court of Appeals addressed a noncompete where the employee was not allowed to “engage in, or own or control an interest in, or act as a principal, director or officer of, or consultant to any firm or corporation engaged in . . . a business substantially similar to that of the Employer.” In other words, the employee was prohibited from working for a competitor “in any capacity,” even though the restriction did not say in any capacity. The Court of Appeals determined that it did not fail as a matter of law because, “under OCGA §13-8-53, the non-compete clause sufficiently and specifically provided a good faith estimate of the scope of the prohibited activities . . . .”