ORDER
I. INTRODUCTION
Insisting that his non-compete agreement (NCA) with defendant Convergys Corporation is unenforceably overbroad and violates public policy, plaintiff James A. Keener filed this action seeking injunc-tive relief against, and various damages from, Convergys. Doc. ## 1, 3. Keener is pursuing a judgment declaring the NCA unenforceable, preventing Convergys from enforcing it. Doc. # 1, Counts One & Two; doc. # 4.
Plaintiff also raises a tortious interference with contract claim and seeks O.C.G.A. § 13-6-11 attorney fees. Doc. # 1, Counts 3-4. Convergys counterclaims for an injunction enforcing the NCA’s substance, if not restitution of the consideration paid to Keener, and for attorney fees/costs. Doc. # 11 at 6-12.
Following Keener’s F.R.Civ.P. 65(b) notice, doc. # 5, the parties entered into a time-extension Consent Order and a confidentiality stipulation, doc. ## 9, 19, then undertook discovery. Doc. #31 ¶ 5. Over Convergys’s opposition, doc. #29, Keener now moves for summary judgment. Doc. #23.
II. SUMMARY JUDGMENT STANDARDS
This Court applies the summary judgment principles explained in
Mize v. Jefferson City Bd. of Educ.,
Thus, a party may not simply “deny” or “controvert” an opposing party’s eviden-tially supported S.D.GA.LOC.R. 56.1 statement.
See, e.g., Tapley v. Collins,
Therefore, where Convergys has failed to rebut Keener’s factual statements by either (a) showing them to be evidentially unsupported; or (b) rebutting them with competent evidence, those facts will be established. This includes statements like Keener Fact Statement #2 — Convergys *1376 has not rebutted it but simply points to other facts.
III. BACKGROUND
Providers of wireless communications like wireless telephones use a computer-driven interface to provide their services. That requires constantly evolving computer hardware and software. 1 Companies like Convergys employ “knowledge workers” like Keener to construct and maintain such interfaces. 2
The interface technology itself requires substantial resources to develop. Companies like Convergys point to that fact when competing for wireless providers’ business. 3 Convergys, in fact, claims it is “the world’s largest provider of integrated customer care and billing services.” www.con-vergys.com/cc.html (site as of 2/20/02).
Knowledge of the interface technology naturally winds up in the minds of knowledge workers to whom competitors are naturally attracted. See supra note 2. Employers therefore employ trade-secret protection measures like NCAs to deter competitors. When an employee jumps to a competitor’s ship, the original employer sometimes need only remind his competitor of the NCA to cause “jumper-termination” under the implied if not actual threat of litigation.
That’s essentially what happened here. Keener, while employed by a Convergys predecessor, signed a 1995 NCA which granted him stock options. Doc. # 29 exh. A; see also doc. # 26 ¶ 4. At that time, he worked first in an Ohio Convergys facility, but in 7/96 moved to an Illinois office to fill a “development management role” for a major Convergys client. Doc. # 35 at 31-32.
There, Convergys contends, Keener was “responsible for the development of enhancements and product support of a large volume customer care billing system.... ” Doc. # 29 at 5. Keener says that in 1999 he followed an organizational split wherein he “took over [system] performance enhancements — that’s like making the system run better, more efficient — and the architecture team, which is a lot of estimating.” Doc. # 35 at 47.
Until Keener resigned in 2001, his work basically was “related to the software product .... [the] running of it, either changing the schedules or just some form of improvement of the overall performance.” Id. at 48. He concedes he became privy to confidential, proprietary information after 2/95, id. at 45, so he ob *1377 viously can be presumed to have retained at least some of it when he joined “H.O. Systems, Inc.” (H.O.) in 2001. See doc. # 25 at 7-8. And, he concedes that Con-vergys was, as of 2/95, reaching a national market. Doc. # 35 at 40.
Keener disputes that H.O. is a “true” competitor of Convergys. Doc. # 25 at 6-7; # 35 at 143 (“They’re [in] totally different leagues....”). No material fact dispute exists on that score. H.O. is a competitor, just a very small one. See doc. # 35 at 144 (“I mean, you’re talking single A versus Major Leagues here, and there’s a big difference”); id. at 126-27 (Keener admits he signed an H.O. NCA that specifically references Convergys as its competitor, and that he understood that to mean if he left H.O. he could not go back to work for Convergys); doc. # 34 at 30, 47-48; www.hosystems.com/welcome/company. htm (site as of 2/20/02) (“H.O. Systems currently has client coverage in over 2/3rds of the United States and plans to not only encompass the entire country but to also spread internationally”).
Keener disclosed Convergys’s NCA to H.O. prior to joining it. Doc. #35 at 93-94. He exercised his NCA-related stock options just prior to leaving Convergys. Doc. # 35 at 11112. Convergys contacted H.O. after it hired Keener. Doc. # 35 at 140-41. H.O. thereafter terminated Keener but paid him severance. Id. at 145^16. Keener continues to reside in Georgia, where he intends to remain if he prevails here. Id. at 149-50; see also id. at 149 (“Well, I could go back to H.O. potentially”). H.O., a Delaware-registered corporation, is located and transacts business in Savannah, Georgia. Doc. # 29 exh. B-C.
IV. ANALYSIS
The NCA contains time, subject-matter and geographic restrictions, see doc. #29 exh. A, all of which Keener argues are unenforceably overbroad under Georgia law. Doc. ## 25, 30. Convergys says the parties agreed that Ohio law applies and under it the NCA is enforceable. Doc. # 29 at 14, 22-25.
A, Choice of Law
Ohio law applies, Convergys contends, because the NCA selects it. Doc. # 29 at 14. Pointing out that this Court is sitting in diversity, Convergys cites
Bryan v. Hall Chemical Company,
The NCA states that “[t]his Agreement shall be governed by the laws of the State of Ohio.” Doc. # 29 exh. A at 3 ¶ 8. “Generally, Georgia will follow a forum selection clause in an employment contract. However, [the Convergys/Keener] contract involves not a forum selection clause, but a
choice of law selection clause
and requires a different legal analysis.”
Hulcher Services, Inc. v. R.J. Gorman R.R. Co., L.L.C.,
That different analysis is applicable here: “Georgia conflicts of law will not follow' a contractual selection of law of a foreign state where such chosen law would contravene the public policy of Georgia against certain unlawful covenants not to compete.”
Id.
at 489,
The
Hulcher
employer sought,
inter alia,
to prevent its employee from working “in any capacity, either directly or indirectly, and from owning, managing, operating, controlling, being employed or connected with in any capacity” any similar business.
*1378
So, Georgia courts faced with this sort of case first apply Georgia law to determine whether an NCA violates Georgia’s public policy.
Id; see also Salsbury Laboratories, Inc. v. Merieux Laboratories, Inc.,
Convergys insists
Hulcher
does not apply because the ex-employer there sought to apply Texas law to an ex-employee who had never worked in Texas and, although the employment contract had been executed there, he had never performed on it in that State. Doc. # 29 at 21-22. And, Con-vergys points out, the ex-employee had been a Georgia, resident the last time he’d worked for his ex-employer.
Id.; see also Hulcher,
These are all valid points but they do not carry the day. First, for most of the contractual period (i.e., mid-1996-2001), Keener performed on the Ohio-executed contract in Illinois. Second, it is undisputed that when Keener jumped ship to H.O., he became and remains a Georgia resident invoking, as is his undisputed right, the protection of Georgia law.
Third, Georgia law for some time has applied the public policy protections embodied in
Nasco, Inc. v. Gimbert,
the Nasco trial court applied the law of Georgia [and the Georgia Supreme Court found] no error. 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. 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 [i:e., Georgia],
Id.
at 676,
Keener was not a Georgia .citizen when the instant contract was formed, and it was not to be performed in Georgia. But no distinguishing facts of that sort were illuminated in
Marketing and Research Counselors, Inc. v. Booth,
In
Booth,
the employee signed a non-solicitation/disclosure agreement (NSA) prohibiting him from soliciting, either directly or indirectly, his employer’s clients.
This Court agrees with Booth’s reasoning. Georgia’s free-competition policy is embedded within its constitution and statutes. 4 Recent Georgia cases cited supra continue to vigorously apply Nasco to invalidate NCAs such as the agreement at issue here. This may wind up encouraging non-Georgia employees to “flee to Georgia” to shed their NCAs. The aches and pains of federalism (pro-marriage advocates in some States have decried other States’ “quickie-divorce” laws), however, have long formed part of the American legal fabric.
Nordson,
which applied Ohio law to uphold an NCA otherwise unenforceable under Georgia law,
On top of that, Nordson’s reasoning itself is questionable.
See Booth,
While the ex-employees in Stidham and Harper evidently were Georgia residents working in Georgia when they entered into their respective contracts, neither of those courts cited those factors in applying Nas-co. On balance, Nasco’s rationale applies here because Keener is, and would like to remain, a Georgia resident.
Finally,
Bryan,
which preceded later Georgia cases that have more vigorously applied Nasco’s public-policy doctrine, provides little support for Convergys — if only because the court there did not explore the issue in any detail.
See Bryan,
Convergys insists that it “does not, in this action, seek to enforce the non-compete agreement signed by Plaintiff Keener.” Doc. #28 at 1. Count Two of its Counterclaim, however, says otherwise. See doc. # 11 at 7-12; see also id. ¶ 20 (“Unless restrained from working for H.O. Systems, Keener’s employment with [it] will cause Convergys irreparable harm....”). Convergys is thus attempting to enforce its NCA in Georgia against a Georgia resident. Under Georgia law, its NCA therefore must be carried over Georgia’s public policy threshold.
B. “Blue Penciling”
If an employment-based NCA contains an overbroad restriction, the entire NCA will fail.
Advance,
Under the instant NCA, Keener is barred from working for
any business offering services related to the business of [Convergys] at the time of termination in any capacity which requires or utilizes the skill, training, or knowledge acquired by [Keener] while employed by [Convergys], whether such position would involve [Keener] in any business activity in competition with [Convergys] or in any business that provides billing and/or customer care systems to third parties engaged in the communications business (including wireless, wireline and cable communication businesses).
Doc. # 29 exh. A ¶ 2 (emphasis added). On its face this provision is overbroad.
See Ken’s Stereo-Video Junction, Inc. v. Plotner,
(a) its territorial reach is overbroad, which renders the NCA unenforceable outright since it cannot be “blue-penciled,” doc. # 25 at 11-12,14-15;
(b) the scope of its employment restriction is overbroad (ie., it extends to Keener’s employment with “any company anywhere in the world that provides billing services to the wireless industry, regardless of the software or hardware used to provide the services, and regardless of the other billing provider’s target market,” doc. # 25 at 12); and
(c) it contains no time limit. Id. at 15.
Convergys, of course, disagrees. Doc. #29.
In that wireless telecommunications is a global business, Convergys must necessarily concede that its NCA geographically reaches nationwide, if not worldwide. See doc. # 26 ¶ 6 (“Convergys considers as a competitor any company anywhere in the United States, and for that matter, anywhere in the world, that provides billing services for wireless companies”) (quotes and cite omitted).
Yet, therein lies the NCA’s fatal flaw. If its geographic reach cannot be determined with reasonable certainty until the employee is terminated, it is unenforceable because Georgia courts “invalidare] territorial restrictions that change and expand during the course of the agreement.”
New Atlanta Ear, Nose & Throat Associates, P.C. v. Pratt,
Convergys’s NCA states: “This restriction will be limited to the geographical area where [Convergys] is doing business at the termination of employment or to such other geographical area such as a court shall find necessary to protect the goodwill and business of [Convergys].” Doc. # 29 exh. A. ¶ 2. Convergys does not dispute that its business reaches nationwide, if not “anywhere in the world.” Doc. # 26 ¶ 6.
The NCA therefore is unenforceable because the scope of the restriction could not be known until termination, cannot be blue-penciled, and overreaches.
See Enron Capital v. Pokalsky,
Similarly, the NCA’s non-solicitation component, see doc # 29 exh. A ¶ 3 (barring contact for two years “with any person, firm, association, corporation or other entity”), is likewise unenforceable:
The nonsolicitation of customers covered any and all customers of the plaintiff, regardless of whether defendant had ever worked for them or had any relationship established during employment anywhere. Therefore, such provision was void as overly broad and unreasonable in territory and in absence of relationships needing protection, because the relationships were developed during the employment. Further, such restrictive covenant had no definite geographic area limitations as to competition, solicitation of clients, or recruiting of employees, which also renders the covenant 'unenforceable for being overbroad.
Capricorn,
C. Convergys’s Counterclaim
Keener seeks complete summary judgment, including dismissal of defendant’s counterclaim. Doc. # 25 at 16; # 30 at 4. Convergys has not raised any argument on its “restitution” counterclaim, doc. # 11 at 6 (“First Count”), something that was analogously reached in
Liautaud v. Liautaud,
Convergys’s restitution claim is therefore abandoned.
Head Start Family Educ. Program, Inc. v. Cooperative Educ. Serv. Agency 11,
V. CONCLUSION
Plaintiff James A. Keener’s motion for summary judgment' (doc. # 23) against defendant Convergys Corporation is GRANTED. The parties’ NCA, as described supra, is unenforceable. Keener’s F.R.Civ.P. 65 Motion for a Preliminary Injunction against Convergys (doc. # 3), construed as a motion for permanent injunction, is GRANTED.
Accordingly, Convergys is permanently enjoined from enforcing the NCA against Keener in any court worldwide. This Order is binding on Convergys within the scope set forth in Rule 65(d) — hence, its officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise.
The parties’ “Consent Motion and Memorandum for Protective Order” (doc. # 8) is GRANTED. Keener’s Request for Oral Argument (doc. # 32) is DENIED. Plaintiff has not sought summary judgment on his remaining claims (ie., tortious interference with contract and O.C.G.A. § 13-6-11 attorney fees, doc. # 1, Counts 3-4), *1383 though Convergys has just moved for same on “Count Three” (tortious interference with contract). Doc. # 42.
The parties therefore shall confer within ten days of the date this Order is served and attempt settlement, short of which plaintiff shall, within ten days thereafter, respond to defendant’s summary judgment motion. In the event of settlement, Keener’s counsel shall promptly present a consented-to final judgment closing this case.
Although the result reached here is required by Georgia law, it nevertheless presents an unfortunate clash between the core values enshrined in fundamental contract law 6 versus judicial and legislative choices governing the free flow of commerce. Restrictive covenants have been around for ages. They offer intellectual property owners protection against theft and dilution by others. They encourage investment and expand business opportunities. Society is served by the expansion of commerce and the prosperity it brings.
As noted, Keener admits he became privy to confidential information. But a fair reading of recent Georgia appellate decisions leads to the conclusion that employers within and without this State are, in many respects, powerless to protect business secrets. Judges are not endowed with business acumen, and a lot of the line drawing required in this field necessitates same. Whether and when a better line should be drawn in cases like this is perhaps best left to legislators, not judges.
Notes
. Consider wireless communication provider H.O. Systems, Inc.’s web-site description of its
core product, speedSUITE, [which is] a highly flexible, integrated, end-to-end billing and Customer Relationship Management service designed to assist wireless carriers by targeting and supporting each stage of the subscriber cycle from initiation through retention.
www. hosystems. com/welcome/database/press asp?id=60 (site as of 2/20/02).
. H.O. Systems, Inc., notes that its
exponential growth has been supported by an influx of highly qualified employees from Georgia and beyond Active recruitment of specialized employees has been accomplished through metropolitan newspapers, trade journals, placement services, and web-based organizations. This has proven to be highly successful with personnel doubling in the past year to the now nearly 300 employees.
www.hosystems.com/welcome/company.htm (site as of 2/20/02).
.Convergys claims to have invested
nearly $100 million over the past three years [into its] component-based, next-generation frameworkf, which] supports the creation of billing and customer care solutions ranging from a single module to a complete, end-to-end product,
www.convergys com/billing.html (site as of 2/20/02).
. As one Georgia justice explained:
"It is a part of the public policy of this State to suppress monopolies and to encourage competition, and to this end restrictions on the right of any person, firm, or corporation to engage in its business and to do business with those members of the public who choose to partake of its services are not favored. [1983 Ga. Const, Art. Ill, Sec VI, Par. V; OCGA § 13-8-2]” (Emphasis supplied.) Troup County Electric Membership Corp. v. Georgia Power Co., 229 Ga. 348, 351,191 S.E.2d 33 (1972).
Shankman v. Coastal Psychiatric Assoc.,
. All Unit B, Fifth Circuit opinions are binding on this Court.
See Stein v. Reynolds Securities, Inc.,
. See U.S. Constitution Art. I, § 10, cl. I (“No State shall ... pass any ... Law impairing the Obligation of Contracts.... ”).
