869 S.E.2d 111
Ga. Ct. App.2022Background:
- Parties are lawyers/former colleagues who executed a settlement agreement containing a mutual non-disparagement clause: LLW and LLW PC agreed not to disparage WGW.
- Appellees sued to enforce fees under the settlement after Appellants (L. Lin Wood and his firm) allegedly called Appellees "extortionists," "crooks," and made similar public/social-media statements accusing them of a shakedown.
- Before filing, Appellees showed a draft complaint to Appellants; after filing, Appellants continued public statements; Appellees moved for a preliminary (interlocutory) injunction enforcing the non-disparagement clause.
- Trial court granted a preliminary injunction prohibiting disparaging statements in any medium but expressly allowed truthful statements in court proceedings, responses to subpoenas, or government investigations.
- Appellants appealed, arguing the injunction is an unconstitutional prior restraint and that the court misinterpreted the clause and erred in applying injunction standards; the Court of Appeals affirmed.
Issues:
| Issue | Plaintiff's Argument (Wade et al.) | Defendant's Argument (Wood et al.) | Held |
|---|---|---|---|
| 1. Whether an interlocutory injunction enforcing a contractual non-disparagement clause is an impermissible prior restraint on speech | Contracting parties may waive speech rights; enforcement of the private agreement is permissible | Injunction is a prior restraint that impermissibly restricts content-based speech | Court: Not an impermissible prior restraint; private parties can waive speech rights and courts may enforce such contracts |
| 2. Proper construction of the non-disparagement clause (whether litigation pendency permits public disparagement) | Clause allows truthful statements only in response to orders/subpoenas or during governmental proceedings; it does not authorize broad public disparagement during the lawsuit | The clause permits commentary (including disparaging statements) during the pendency of litigation | Court: "during" means in the course of/responding to orders or government proceedings; Appellants’ broad reading would render clause meaningless and is rejected |
| 3. Whether injunctive relief is an available remedy under the settlement agreement | Section 4F preserves enforcement remedies; injunctions may be used to enforce the agreement | Because injunctive relief is specified elsewhere only for releases, the non-disparagement clause lacks an injunction remedy | Court: Section 4F makes remedies to enforce the agreement available; injunction is available |
| 4. Whether interlocutory-injunction factors are met (irreparable harm, adequacy of legal remedy, public interest) | Public disparagement causes reputational harm to fiduciary practitioners that is irreparable; money damages are inadequate; enforcement promotes public policy favoring settlements | No irreparable harm; damages suffice; injunction harms public interest in hearing about the litigation and may impede client communications | Court: Some evidence supports irreparable reputational harm, money damages inadequate, and enforcement of contracts serves public interest; injunction proper |
Key Cases Cited
- Cohen v. Cowles Media Co., 501 U.S. 663 (1991) (First Amendment does not bar state-law enforcement of promises made to the press)
- Pierce v. St. Vrain Valley Sch. Dist. RE-1J, 981 P.2d 600 (Colo. 1999) (breach of non-disparagement clause not barred by First Amendment)
- Perricone v. Perricone, 292 Conn. 187 (2009) (enforcing confidentiality restraints does not necessarily violate the First Amendment)
- Kneebinding, Inc. v. Howell, 208 Vt. 578 (2018) (private parties may waive free-speech rights by contract and courts may enforce them)
- Bryan v. MBC Partners, L.P., 246 Ga. App. 549 (2000) (party may waive constitutional rights by contract; injunction enforcing covenant did not violate public policy)
- WXIA-TV v. State of Ga., 303 Ga. 428 (2018) (prior restraints are among the most serious infringements on speech)
- Reed v. Town of Gilbert, 576 U.S. 155 (2015) (content-based restrictions on speech are presumptively unconstitutional)
- SRB Inv. Svcs., LLLP v. Branch Banking & Trust Co., 289 Ga. 1 (2011) (standards and deference for interlocutory injunction review)
- Kinard v. Ryman Farm Homeowners’ Assn., 278 Ga. 149 (2004) (interlocutory injunctions preserve the status quo and balance conveniences of parties)