Carson v. Obor Holding Co.
318 Ga. App. 645
Ga. Ct. App.2012Background
- Carson, a Georgia resident, was a former Obor Holding Management Committee member and Obor Digital employee.
- Operating Agreement includes forum-selection clause: any disputes shall be litigated in Orange County, Florida, and Florida law governs.
- Carson challenged enforcement of the forum clause, arguing it would violate Georgia public policy on restraints of trade.
- Trial court dismissed the suit based on the forum clause; appellate review is de novo for such a dismissal.
- Court analyzes enforceability of the forum clause under Georgia law, considering Georgia public policy and potential Florida enforcement.
- Covenants at issue include nondisclosure, nonsolicitation, and a broad noncompete; Georgia law scrutiny applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause is enforceable against Carson. | Carson argues enforceability would violate Georgia public policy on restraints of trade. | Obor Holding contends clause is prima facie valid and should be enforced. | Forum clause unenforceable due to Georgia public policy. |
| Whether the covenants (nondisclosure, nonsolicitation, noncompete) are reasonable under Georgia law. | The covenants are overly broad/ambiguous and violate Georgia public policy on restraints. | Covenants are reasonable protections for the company’s interests. | All three covenants are unenforceable under Georgia law. |
| If unenforceable in Georgia, would Florida law likely enforce them, given the choice-of-law and blue-penciling concepts? | Florida enforcement would conflict with Georgia public policy and thus not apply. | Florida would enforce or blue-pencil covenants to make them enforceable. | Florida would likely enforce and blue-pencil; Georgia policy would be violated, so reversal follows. |
Key Cases Cited
- The Houseboat Store v. Chris-Craft Corp., 302 Ga.App. 795 (2010) (de novo review of forum-selection clause on appeal)
- OFC Capital v. Colonial Distrib., 285 Ga. App. 815 (2007) (forum-clause prima facie valid; compelling reason to avoid)
- The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses presumptively enforceable)
- W. R. Grace & Co. v. Mouyal, 262 Ga. 464 (1992) (reasonableness of restraints; three-part test)
- Bunker Hill Intl. v. NationsBuilder Ins. Svcs., 309 Ga. App. 503 (2011) (public policy as a compelling reason to avoid forum clause)
- OnBrand Media v. Codex Consulting, 301 Ga. App. 141 (2009) (mid-level scrutiny; territorial and scope considerations)
- Paramount Tax & Accounting v. H&R Block Eastern Enterprises, 299 Ga. App. 596 (2009) (territory limits in nonsolicitation covenants)
- Roberts v. Tifton Med. Clinic, 206 Ga. App. 612 (1992) (reasonableness in restraints; mid-level scrutiny guidance)
- Habif, Arogeti & Wynne, P.C. v. Baggett, 231 Ga. App. 289 (1998) (mid-level scrutiny; territorial or client-specific limits required)
- New Atlanta Ear, Nose & Throat Assoc. v. Pratt, 253 Ga. App. 681 (2002) (territorial limits and scope in restrictive covenants)