NORTH AMERICAN SENIOR BENEFITS, LLC v. WIMMER

906 S.E.2d 373, 319 Ga. 641

• Court: Supreme Court of Georgia
• Decided: September 4, 2024
• Docket: S23G1146
• Status: Published

Opinion

319 Ga. 641 FINAL COPY

S23G1146. NORTH AMERICAN SENIOR BENEFITS, LLC v. WIMMER et al.

BETHEL, Justice.

The Georgia Restrictive Covenants Act (the “GRCA”), OCGA §

13-8-50 et seq., governs the enforceability of restrictive covenants in

Georgia. The GRCA authorizes the “enforcement of contracts that

restrict competition during the term of a restrictive covenant, so long

as such restrictions are reasonable in time, geographic area, and

scope of prohibited activities.” OCGA § 13-8-53 (a). In this case, we

focus on the requirement of geographic reasonableness. The

petitioner — a Georgia corporation seeking to enforce a restrictive

covenant against two former employees — asks us to review the

conclusion reached by the Court of Appeals that, to be deemed

geographically reasonable under OCGA § 13-8-53 (a), a restrictive

covenant must contain an express geographic term. In light of the

statutory text and context of the GRCA, we conclude that the Court of Appeals erred, so we reverse and remand this case for further

proceedings.

1. Facts and Procedural History

In 2018, North American Senior Benefits, LLC (“NASB”), an

insurance marketing organization that contracts with independent

insurance agents, entered into employment contracts with Ryan and

Alisha Wimmer that each contained an identical restrictive

covenant prohibiting the Wimmers from, among other things, hiring

or otherwise interfering with the ongoing employment relationship

of any of NASB’s employees for two years following the termination

of the Wimmers’ employment relationship with NASB (the “non-

recruitment provision”).1 The Wimmers and NASB severed ties in

1 Specifically, the non-recruitment provision prohibited the Wimmers from “directly or indirectly” engaging in the following activities: (a) solicit[ing] for the provision [of] services or employment any employee, agent or independent contractor of NASB, (b) advis[ing] or recommend[ing] to any other person that they employ or solicit for provision of services any employee or independent contractor for NASB, (c) encourag[ing] or advis[ing] such employees, agents or independent contractors to sever, discontinue or not renew any agreement or relationship to NASB, or (d) otherwise establish[ing] or seek[ing] to establish any business relationship with any such employee, agent or independent contractor relating to the sale of insurance products. 2 2021. Asserting that the Wimmers had established a competing

business that violated the provisions of the restrictive covenant,

NASB filed suit against them to enforce the restrictive covenant,

including the non-recruitment provision. The non-recruitment

provision, however, does not contain an express description of the

geographic area in which the provision applies, an omission the

Wimmers argue dooms NASB’s claims. The State-wide Business

Court agreed and granted in part the Wimmers’ motion for judgment

on the pleadings on this basis.

The Court of Appeals affirmed, concluding that, in order to be

deemed reasonable under OCGA § 13-8-53 (a), a restrictive covenant

must include an express geographic term, though one judge

dissented.2 See North American Senior Benefits v. Wimmer, 368 Ga.

2 The non-recruitment provision also applied to the Wimmers’ conduct

before the termination of their employment contracts with NASB, and NASB alleges that the Wimmers’ conduct during their employment violated the non- recruitment provision. However, the Business Court and the Court of Appeals both limited their analysis of the non-recruitment provision’s enforceability to the Wimmers’ conduct after the termination of their contracts. Our analysis is likewise so limited. We further note that the Business Court granted the Wimmers’ requests for a declaratory judgment that the non-recruitment provision was

3 App. 124 (889 SE2d 361) (2023); id. at 133 (Markle, J., dissenting).

In reaching this conclusion, the Wimmer majority looked to the

Court of Appeals’ prior decision in CarpetCare Multiservices v. Carle,

347 Ga. App. 497 (819 SE2d 894) (2018),3 which held that a

restrictive covenant must contain an express geographic term in

order to comply with OCGA § 13-8-53 (a). See Wimmer, 368 Ga. App.

at 127 (2). Finding CarpetCare’s reasoning “persuasive,” the

Wimmer majority adopted its holding. Id. at 128 (2).

CarpetCare concerned the enforceability of a restrictive

covenant against a former independent contractor. The geographic

scope of the restrictive covenant in that case, like the one at issue

unenforceable as to the Wimmers’ post-termination conduct and a permanent injunction precluding NASB from attempting to enforce the non-recruitment provision as to post-termination conduct. The non-recruitment provision’s two- year term expired in June 2023, however, so any issue regarding the propriety of declaratory relief or the injunction is now moot. See Babies Right Start v. Ga. Dept. of Pub. Health, 293 Ga. 553, 555 (2) (a) (748 SE2d 404) (2013); Holton v. Physician Oncology Svcs., 292 Ga. 864, 866 (1) (742 SE2d 702) (2013). 3 The Wimmer majority considered CarpetCare not binding under the

Court of Appeals’ own rules. See Court of Appeals Rule 33.2 (a) (2) (for appeals decided by a division of the Court of Appeals prior to August 1, 2020, “[a]n opinion is physical precedent only (citable as persuasive, but not binding, authority) . . . with respect to any portion of the published opinion in which any of the panel judges . . . dissent”). 4 here, was not stated in express terms. Instead, the covenant

prohibited the contractor, for a period of one year after the

termination of his employment relationship with CarpetCare, from

“provid[ing] any service identified [by the covenant] to any customer

with whom [the independent contractor] had any contact during the

term of his employment.” CarpetCare, 347 Ga. App. at 497-498. The

trial court found that the restrictive covenant was “void and

unenforceable because it did not contain a geographic limitation as

required by OCGA § 13-8-53 (a).” Id. at 497. The sole issue on appeal

was whether the trial court erred by reaching that determination.

Id.

In affirming the trial court’s judgment, the CarpetCare panel

majority narrowly focused its analysis on the phrase “geographic

area,” which appears in subsections (a), (b), (c), and (e) of the statute.

Pointing to subsection (b),4 which is applicable only to customer non-

4 OCGA § 13-8-53 (b) states in relevant part:

[A]n employee may agree in writing for the benefit of an employer to refrain, for a stated period of time following termination, from soliciting, or attempting to solicit, directly or by

5 solicitation provisions, the CarpetCare majority observed that

subsection (b) states that “[n]o express reference to geographic

area . . . shall be required” for the restraint to be enforceable.

CarpetCare, 347 Ga. App. at 498 (citation and punctuation omitted).

But, the panel majority noted, the parties agreed that the restrictive

covenant was not a non-solicitation provision and, thus, was

governed by subsection (a), not subsection (b). Id. As to subsection

(a), the CarpetCare majority noted the absence of any similar

language foreclosing a requirement of an express geographic

reference. Finding that distinction between subsections (a) and (b)

dispositive of the issue on appeal, the CarpetCare majority

concluded that a “non-compete covenant [that] did not contain any

reference to a geographic area limitation . . . failed to comply with

OCGA § 13-8-53 (a), and, thus, . . . was void and unenforceable.” Id.

assisting others, any business from any of such employer’s customers, including actively seeking prospective customers, with whom the employee had material contact during his or her employment for purposes of providing products or services that are competitive with those provided by the employer’s business. No express reference to geographic area or the types of products or services considered to be competitive shall be required in order for the restraint to be enforceable. 6 at 499-500. In other words, the CarpetCare majority reasoned that,

because subsection (b) expressly authorizes enforcement of customer

non-solicitation provisions that do not contain an “express reference

to geographic area,” subsection (a) must implicitly forbid

enforcement of all other restrictive covenants in the event they lack

such a delineation.

In adopting CarpetCare’s holding, the Wimmer majority also

sought to bolster its analysis by pointing to other provisions of the

GRCA as well as decisions of federal district courts in Georgia that

it said supported reading into subsection (a) a requirement for an

express geographic term. See Wimmer, 368 Ga. App. at 128-129 (2).

In rejecting this conclusion, the Wimmer dissent first noted that pre-

GRCA decisional law “frequently upheld non-recruitment provisions

that did not include an express geographic limitation,” recognizing

that “in the context of employee-poaching . . . 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.” Id. at 134-135

(Markle, J., dissenting) (citation and punctuation omitted). In the

7 dissenting opinion’s view, the GRCA reflects this rationale,

providing in OCGA § 13-8-53 (c) (1) that “[w]henever a description

of . . . geographic areas is required . . . any description that provides

fair notice of the maximum reasonable scope of the restraint shall

satisfy such requirement.” Wimmer, 368 Ga. App. at 135 (Markle,

J., dissenting) (punctuation omitted; emphasis in original). And the

dissenting opinion concluded that the non-recruitment provision

here satisfies that requirement and is enforceable. Id. at 135.

Thereafter, we granted NASB’s petition for a writ of certiorari to

determine whether the Court of Appeals properly construed OCGA

§ 13-8-53 (a).

2. Analysis

Our review of this issue of statutory construction — a question

of law — is de novo. See Junior v. Graham, 313 Ga. 420, 423 (2) (870

SE2d 378) (2022). In our search for statutory meaning, “we must

give the text its plain and ordinary meaning, view it in the context

in which it appears, and read it in its most natural and reasonable

way.” State v. Cook, 317 Ga. 659, 660 (1) (893 SE2d 670) (2023)

8 (citation and punctuation omitted). And though our focus here is on

the meaning of OCGA § 13-8-53 (a), “[w]e do not limit our

consideration to the words of [that subsection] alone.” West v. City of

Albany, 300 Ga. 743, 745 (797 SE2d 809) (2017) (citation and

punctuation omitted). Instead, we apply the “basic rule of

construction that a statute should be construed to make all its parts

harmonize and to give a sensible and intelligent effect to each part,

as it is not presumed that the legislature intended that any part

would be without meaning.” McIver v. State, 314 Ga. 109, 120 (2) (b)

(875 SE2d 810) (2022) (citation and punctuation omitted).

This case turns on the meaning of the first sentence of OCGA

§ 13-8-53 (a), which provides that “enforcement of contracts that

restrict competition during the term of a restrictive covenant, so long

as such restrictions are reasonable in time, geographic area, and

scope of prohibited activities, shall be permitted.” In construing this

text, the Court of Appeals, both in CarpetCare and in Wimmer,

centered its analysis on the narrow phrase “geographic area” but

looked elsewhere in the GRCA to conclude that the inclusion of that

9 phrase in subsection (a) requires that all restrictive covenants

contain an express geographic term.5 However, as we have explained

before, statutory text is not properly read in a vacuum but, instead,

must be considered in light of the surrounding text and the statute’s

broader context because “context is a primary determinant of

meaning.” May v. State, 295 Ga. 388, 391 (761 SE2d 38) (2014)

(citation and punctuation omitted). See also Duke v. State, 311 Ga.

135, 140 (2) (a) (856 SE2d 250) (2021) (“[W]e must consider the

meaning of [a] phrase [contained in a statute] in conjunction with

the rest of the sentence” in which it appears.); Cook, 317 Ga. at 660

5 In its analysis, the CarpetCare majority appears to operate under the

implicit assumption that restrictive covenants must comply with either subsection (a) or subsection (b), see CarpetCare, 347 Ga. App. at 498, an assumption the Wimmer majority echoes, see Wimmer, 368 Ga. App. at 127 (2). Both the Business Court and the Wimmers likewise appear to subscribe to this view of OCGA § 13-8-53. Subsection (b) inarguably does not apply to the restrictive covenant at issue in this case, so we need not address the interplay between subsections (a) and (b) to resolve this appeal. We are nevertheless dubious that subsection (a)’s reasonableness standard does not apply to all restrictive covenants, particularly in light of the settled principle that only reasonable restrictive covenants are enforceable in Georgia. See generally Motorsports of Conyers v. Burbach, 317 Ga. 206, 211-212 (2) (b) (892 SE2d 719) (2023) (“[I]n Georgia, the line between unreasonable restrictive covenants and reasonable ones has long been drawn by public policy: unreasonable restrictive covenants are contracts in general restraint of trade that are against public policy, while reasonable restrictive covenants are valid and enforceable.”). 10 (1) (“For context, we may look to other provisions of the same

statute, the structure and history of the whole statute, and the other

law — constitutional, statutory, and common law alike — that forms

the legal background of the statutory provision in question.”

(citation and punctuation omitted)). Considering both the statutory

text and context, we conclude that the Court of Appeals erred in its

construction of subsection (a).

We turn first to subsection (a)’s plain text, which, as always,

must be the north star of our analysis. Read as a whole, subsection

(a) establishes a general standard of enforceability for “contracts

that restrict competition during the term of a restrictive covenant”

and specifically requires that “such restrictions” be “reasonable in

time, geographic area, and scope of prohibited activities.” OCGA §

13-8-53 (a). From the use of the conjunctive “and,” it is clear that a

restrictive covenant must comply with all three statutory bases in

order to be enforceable. See Reliance Equities v. Lanier 5, 299 Ga.

891, 893 (1) (792 SE2d 680) (2016). As to geographic reasonableness

in particular, nothing in the text of subsection (a) mandates that a

11 restrictive covenant contain an explicit geographic term, nor does

subsection (a) prohibit a covenant’s geographic area from being

expressed in implied terms. In short, the plain text of subsection (a)

requires with respect to geographic restrictions on competition that

any such restriction be reasonable, regardless of whether the

restriction is expressly stated or implied. To conclude otherwise

would require us to read into subsection (a) language that the

legislature did not include. See West, 300 Ga. at 746 (“The General

Assembly did not draft the language of the statute in this manner,

and we will not construe the statute as if it did.”); Deal v. Coleman,

294 Ga. 170, 172 (1) (a) (751 SE2d 337) (2013) (“When we consider

the meaning of a statute, we must presume that the General

Assembly meant what it said and said what it meant.” (citation and

punctuation omitted; emphasis supplied)).

Several contextual considerations underscore this conclusion.

First, other provisions of the GRCA separately address how

restrictions contained in restrictive covenants should be described.

12 Specifically, OCGA § 13-8-53 (c)6 sets forth guidelines for

descriptions contained in restrictive covenants, stating that the

description must provide “fair notice of the maximum reasonable

scope of the restraint,” even if the description “is generalized or

could possibly be stated more narrowly to exclude extraneous

matters.” OCGA § 13-8-53 (c) (1). Subsection (c) goes on to establish

standards for determining whether “activities, products, or services”

6 Subsection (c) provides in relevant part:

(1) Activities, products, or services that are competitive with the activities, products, or services of an employer shall include activities, products, or services that are the same as or similar to the activities, products, or services of the employer. Whenever a description of activities, products, or services, or geographic areas, is required by this Code section, any description that provides fair notice of the maximum reasonable scope of the restraint shall satisfy such requirement, even if the description is generalized or could possibly be stated more narrowly to exclude extraneous matters. . . . (2) Activities, products, or services shall be considered sufficiently described if a reference to the activities, products, or services is provided and qualified by the phrase “of the type conducted, authorized, offered, or provided within two years prior to termination” or similar language containing the same or a lesser time period. The phrase “the territory where the employee is working at the time of termination” or similar language shall be considered sufficient as a description of geographic areas if the person or entity bound by the restraint can reasonably determine the maximum reasonable scope of the restraint at the time of termination. 13 or “geographic areas” are “sufficiently described,” providing

exemplar phrasing while also indicating that “similar language”

may be sufficient. See OCGA § 13-8-53 (c) (2). Importantly, the

statute is clear that a “description” of a restrictive covenant’s

“geographic area” is not always required. Subsection (c)’s guidelines

apply “[w]henever a description of activities, products, or services,

or geographic areas is required by this Code section.”7 OCGA § 13-8-

53 (c) (1). Thus, by referring to a subset of circumstances in which a

description of geographic area is required, the statute necessarily

implies that there are times when one is not required. By construing

7 Echoing the reasoning of the majority opinion below, the Wimmers

assert that the inclusion of this language in subsection (c) necessarily means that subsection (a) mandates a geographic description in all cases. See Wimmer, 368 Ga. App. at 128 (2) (“Paragraph (c) (1) must be read to indicate that a description of geographic areas is required of restrictive covenants governed by OCGA § 13-8-53 (a).”). As we have already discussed, however, subsection (a), by its plain language, imposes no such requirement, and we cannot read into subsection (a) language that is not there, regardless of what another subsection of the statute might imply. It may be that subsection (c) prompts the question of when a description is “required by this Code section.” But that is not the question at hand. Instead, this case is before us on certiorari on the limited question of whether subsection (a) imposes a requirement for an express geographic term. It does not. And while the provisions of statutes are always read in context and concert, we do not read the provisions of subsection (c) as creating a requirement in the silence of subsection (a). 14 subsection (a) to require an express geographic description in all

circumstances, the Court of Appeals imposed a stricter standard

than that imposed both by the plain text of subsection (a) and in the

context of subsection (c).

Looking to the broader statutory context, the GRCA plainly

contemplates that a restrictive covenant’s geographic scope can be

described in ways that do not involve geographic terms. For

example, under OCGA § 13-8-56 (2), the geographic scope of a

restrictive covenant is presumed reasonable if, among other things,

it “includes the areas in which the employer does business at any

time during the parties’ relationship” and “contains a list of

particular competitors as prohibited employers for a limited period

of time.” The restrictive covenant here does something similar.

Instead of listing employers that the Wimmers may not work for, it

names the employer — NASB — that the Wimmers may not recruit

employees from, and it confines that restriction to a limited period

of time — two years — after the employment relationship between

NASB and the Wimmers ended. It would be oddly incongruous to

15 conclude that the non-recruitment provision, though stated in

similarly narrow terms as covenants deemed presumptively

reasonable in geographic area under OCGA § 13-8-56, is

categorically unreasonable because it lacks an express geographic

term.

Our reading of OCGA § 13-8-53 (a) likewise comports with the

GRCA’s “more permissive and flexible approach to restrictive

covenants.” Motorsports of Conyers v. Burbach, 317 Ga. 206, 214 (2)

(c) (ii) (892 SE2d 719) (2023). See also Mullally v. CU Capital Market

Solutions, 368 Ga. App. 602, 606 (3) (890 SE2d 494) (2023)

(observing that “the authority and latitude given to the courts to

interpret and modify restrictive covenants so that they conform both

to the will of the parties and the strictures of the GRCA rebut any

notion that an imprecise or imperfectly drafted restrictive covenant

— such as the ones here — is perforce invalid”). And our rejection of

the requirement read into the statute by the Court of Appeals is

consistent with the GRCA’s stated purpose “to provide statutory

guidance so that all parties to [restrictive covenants] may be certain

16 of the validity and enforceability of such provisions and may know

their rights and duties according to such provisions.” OCGA § 13-8-

50.

Finally, our reading of the statute accords with the decisional

law that is the backdrop of the GRCA, pursuant to which a

restrictive covenant’s reasonableness was assessed in light of its

duration, territorial coverage, and scope of activity and which

recognized that “[r]equiring an express geographic territorial

description in all cases is not in keeping with the reality of the

modern business world in which an employee’s ‘territory’ knows no

geographic bounds.” W. R. Grace & Co. v. Mouyal, 262 Ga. 464, 467

(2) (422 SE2d 529) (1992). See also Motorsports of Conyers, 317 Ga.

at 206-207 (noting that (“[o]ur decisional law has long distinguished

between restrictive covenants that are reasonable (in scope,

duration, and geographic reach) and those that are unreasonable”);

May, 295 Ga. at 397-398 (“The General Assembly properly can, of

course, enact legislation that departs from the common law, but to

the extent that statutory text can be as reasonably understood to

17 conform to the common law as to depart from it, the courts usually

presume that the legislature meant to adhere to the common

law. . . . [S]tatutes will not be interpreted as changing the common

law unless they effect the change with clarity.” (citations and

punctuation omitted)).

Of course, by omitting any express geographic description

entirely, the implied provision in question here could be read in one

of two ways. NASB suggests that, because it is an employee non-

recruitment provision, it should be considered to have a geographic

scope aligned with the current homes and places of employment of

the covered employees. Alternatively, the absence of any described

geographic boundary could be understood to give the provision

global or universal effect with respect to geographic application.

This sort of distinction is irrelevant because, in any event, the

analysis remains the same under OCGA § 13-8-53 (a). The trial court

must assess whether the provision’s geographic scope is reasonable

in light of the totality of the circumstances including, but not limited

to, the total geographic area encompassed by the provision, the

18 business interests justifying the restrictive covenant, the nature of

the business involved, and the time and scope limitations of the

covenant. See OCGA § 13-8-55 (“The person seeking enforcement of

a restrictive covenant shall plead and prove the existence of one or

more legitimate business interests justifying the restrictive

covenant.”); Mouyal, 262 Ga. at 466 (2) (at common law, “the

reasonableness of the [territorial] restriction is more dependent

upon the facts and circumstances surrounding the case than on the

geographic size of the territory”). And here, that question boils down

to whether, in light of all the circumstances, it was reasonable to

prohibit the Wimmers from recruiting for employment any NASB

employee regardless of the employee’s location for the term of the

covenant.

In sum, OCGA § 13-8-53 (a) means what it says — to be

enforceable, a restrictive covenant must be “reasonable in time,

geographic area, and scope of prohibited activities.” Whether a given

covenant is reasonable in geographic area under subsection (a) is not

dependent on whether its geographic scope is expressly stated but,

19 rather, on the facts and circumstances of the case, as measured by

the requirements of the GRCA. Accordingly, we reverse the

judgment below and remand this case to the Court of Appeals. On

remand, the Court of Appeals is directed to reverse the Business

Court’s judgment and remand the case to that court, so that it may

in the first instance assess whether the restrictions of the non-

recruitment provision are “reasonable” under subsection (a).8

Judgment reversed and case remanded. All the Justices concur.

8 To the extent CarpetCare, 347 Ga. App. at 497-500, is inconsistent with

this opinion, we hereby disapprove it. 20 Decided September 4, 2024.

Certiorari to the Court of Appeals of Georgia — 368 Ga. App.

124.

King & Spalding, Thaddeus D. Wilson, Valentin Leppert, for

appellant.

Elarbee Thompson Sapp & Wilson, Justin B. Connell;

FordHarrison, Jeffrey D. Mokotoff, Leslie B. Hartnett, Laura T.

Yellig, for appellees.

Meagan M. Hanson; Gilbert Harrell Sumerford & Martin,

Judson H. Turner; Kilpatrick Townsend & Stockton, John P. Jett, K.

Bradford Sears, amici curiae.