Convergys Corp. v. Keener

582 S.E.2d 84, 276 Ga. 808, 2003 Fulton County D. Rep. 1561, 19 I.E.R. Cas. (BNA) 1778, 2003 Ga. LEXIS 484
CourtSupreme Court of Georgia
DecidedMay 19, 2003
DocketS03Q0400
StatusPublished
Cited by50 cases

This text of 582 S.E.2d 84 (Convergys Corp. v. Keener) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Convergys Corp. v. Keener, 582 S.E.2d 84, 276 Ga. 808, 2003 Fulton County D. Rep. 1561, 19 I.E.R. Cas. (BNA) 1778, 2003 Ga. LEXIS 484 (Ga. 2003).

Opinions

Thompson, Justice.

James A. Keener sued his former employer, Convergys Corporation (Convergys) in a diversity action in the United States District Court for the Southern District of Georgia. Keener sought a declaratory judgment that a nondisclosure and noncompetition agreement he had executed with Convergys was overbroad and unenforceable under Georgia law; an injunction preventing Convergys from enforcing the agreement; and damages for tortious interference with his employment at one of Convergys’ competitors. Convergys counterclaimed for an injunction enforcing the agreement; alternatively, for restitution of the consideration paid to Keener; and for attorney fees. Although the agreement contained a choice of law selection clause declaring that it be governed by the law of the state of Ohio, the district court refused to give effect to that provision on the basis that the application of Ohio law would contravene the public policy of Georgia. Concluding that the agreement is unenforceable under Georgia law, the district court granted Keener summary judgment, permanently enjoined Convergys from enforcing the agreement, and dismissed Convergys’ counterclaim.

Convergys appealed to the United States Court of Appeals for the Eleventh Circuit, which certified the following question of Geor[809]*809gia law to this Court:

Whether a court applying Georgia conflicts of laws rules [must] follow the language of Restatement (Second) of Conflict of Laws § 187 (2) and, therefore, first must ascertain whether Georgia has a “materially greater interest” in applying Georgia law, rather than the contractually selected forum’s law, before it elects to apply Georgia law to invalidate a non-compete agreement as contrary to Georgia public policy.

Because the Restatement (Second) of Conflict of Laws has never been adopted in Georgia, and because we continue to refuse to enforce contractual rights which contravene the policy of Georgia, we answer in the negative.

In 1984 Keener began working for Convergys’ predecessor company Cincinnati Bell Information Systems (CBIS), an Ohio corporation, and remained employed with CBIS through its evolvement into what is now Convergys. In 1995 Keener executed the nondisclosure and noncompetition agreement with CBIS as a condition of his continued employment, and he was granted stock options as consideration for the agreement. The agreement contained time, subject matter and geographic restrictions, as follows:

Employee agrees for two years following termination of employment for any reason (or if this period is unenforceable by law, then for such period as shall be enforceable), not to engage in any business offering services related to the business of the Company at the time of termination in any capacity which requires or utilizes the skill, training or knowledge acquired by Employee while employed by the Company, whether such capacity be as a principal, partner, joint venturer, agent, employee, salesperson, consultant, director or officer, where such position would involve Employee in any business activity in competition with the Company or in any business that provides billing and/or customer care systems to third parties engaged in the communication business (including wireless, wireline and cable communication businesses). This restriction will be limited to the geographical area where the Company is doing business at the termination of employment or to such other geographical area as a court shall find reasonably necessary to protect the goodwill and business of the Company.

In 2001 Keener voluntarily left Convergys and relocated to Georgia to accept a position with H.O. Systems, a competitor of Con[810]*810vergys, located in Savannah. Later that year, while Keener was making a sales call for H.O. Systems, he happened to cross paths with a Convergys salesperson. That day, Keener received a call from Convergys’ legal department reminding him of the noncompetition agreement. Subsequently, both Keener and H.O. Systems received letters demanding that Keener cease his employment with H.O. Systems. Eventually, Keener and H.O. Systems terminated their employment relationship by mutual agreement.

The issue presented by this appeal was squarely before this Court in Nasco, Inc. v. Gimbert, 239 Ga. 675 (2) (238 SE2d 368) (1977). There, an employer brought suit in Georgia, seeking injunctions and damages against a former employee based upon noncompetition, nonsolicitation, and nondisclosure covenants in an employment agreement. The agreement specified that it would be construed according to Tennessee law. However, the trial court applied the law of Georgia and refused to enforce the covenants, granting summary judgment to the employee defendant. An appeal was taken to this Court. After first ascertaining that there were significant contacts with the State of Georgia, such that the choice of our law was neither arbitrary nor constitutionally impermissible, see Allstate Ins. Co. v. Hague, 449 U. S. 302 (101 SC 633, 66 LE2d 521) (1981), this Court affirmed, holding that:

The law of the jurisdiction chosen by parties to a contract to govern their contractual rights will not be applied by Georgia courts where application of the chosen law would contravene the policy of, or would be prejudicial to the interests of, this state. [Cits.] Covenants against disclosure, like covenants against competition, affect the interests of this state, namely the flow of information needed for competition among businesses, and hence their validity is determined by the public policy of this state. [Cits.]

Nasco, supra at 676 (2).

The rationale for this decision was shown to be former Georgia Code § 102-110 (now OCGA § 1-3-9) (“courts shall enforce [the comity of states], unless restrained by the General Assembly, so long as its enforcement is not contrary to the policy or prejudicial to the interests of this state”), and this Court’s holding in Ulman &c. Woolen Co. v. Magill, 155 Ga. 555 (117 SE 657) (1923). The Ulman decision simply applied the foregoing Code section in reaching the conclusion that Georgia would not enforce a Missouri contract that violated public policy in this state. On this principle, the cases are legion. E.g., Hulcher Sues. v. J. Carman R. Co., 247 Ga. App. 486 (2) (543 SE2d 461) (2000) (selection of choice of Texas law will not be followed [811]*811where it flagrantly contravenes the public policy of Georgia); Federal Ins. Co. v. Nat. Distributing Co., 203 Ga. App. 763 (1) (417 SE2d 671) (1992) (Restatement approach has been rejected in Georgia and the traditional method retained); Enron Capital &c. v. Pokalsky, 227 Ga. App. 727 (3) (490 SE2d 136) (1997) (although the parties may have chosen the law of a foreign jurisdiction to govern, a Georgia court will not enforce the contract if it is “particularly distasteful”); Merrill Lynch, Pierce, Fenner & Smith v. Stidham, 658 F2d 1098, 1100 fn. 5 (5th Cir. 1981); Barnes Group v. Harper, 653 F2d 175, 178 fn. 4 (5th Cir. Unit B 1981); Marketing and Research Counselors v. Booth, 601 FSupp. 615 (N.D. Ga. 1985).

We reaffirmed our commitment to the traditional choice of law rules in General Tel. Co. &c. v. Trimm, 252 Ga. 95 (311 SE2d 460) (1984).

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582 S.E.2d 84, 276 Ga. 808, 2003 Fulton County D. Rep. 1561, 19 I.E.R. Cas. (BNA) 1778, 2003 Ga. LEXIS 484, Counsel Stack Legal Research, https://law.counselstack.com/opinion/convergys-corp-v-keener-ga-2003.