Appellant appeals from a permanent injunction issued by the Superior Court of Decatur County restraining him from engaging in certain competitive activities in violation of an employment contract.
Appellant and appellee entered into an employment contract on April 27,1974, whereby appellant was to sell
In January 1975 National promoted the appellant to the position of district manager of the southwest quadrant of Georgia. No new employment contract was entered into at that time. Appellant was dismissed by appellee without prior notice on September 20, 1975. He was employed by American Auto Club in October 1975 as its general manager. In that position appellant was responsible for managing the sales of American’s automobile insurance throughout Georgia. As a result of appellant’s employment with the American Auto Club, appellee brought suit to enforce appellant’s employment contract with National Motor Club. Appellant admits that in his new position he has solicited National’s salesmen and members and that he has sold automobile insurance in the same territory in which he worked for National. He defends his actions on the theory that he was terminated without cause and without the required fifteen-day written notice, or in the alternative, that the covenant of noncompetition is void as against public policy. The trial court found that the appellant was validly discharged without prior notice and that the noncompetition provision is valid and enforceable. The court enjoined appellant from violating the contract terms for a period of three years in the area identified by appellant as his managerial territory.
1. Appellant contends that the admitted failure of appellee to give him fifteen days written notice prior to the termination of his employment is a breach of the
The evidence supports the trial court’s findings that appellant violated the terms of the agreement. His employment was therefore properly terminated without notice under the contract.
2. Georgia law provides that contracts in restraint of trade or tending to lessen competition are against public policy and are therefore void. Code Ann. § 20-504; Georgia Constitution, Art. IV, Sec. IV, Par. I (Code Ann. § 2-2701). Covenants against competition in employment contracts are considered in partial restraint of trade and are to be tolerated only if "strictly limited in time and territorial éffect and [are] otherwise reasonable considering the business interest of the employer sought to be protected and the effect on the employee.”
Orkin Exterminating Co. v. Pelfrey,
The noncompetition covenant under consideration in this case provides in pertinent part: "Employee hereby expressly covenants and agrees that at no time during the course of his employment, or for a period of three (3) years immediately following termination of this employment (regardless of whether said termination is voluntary or involuntary), in any territory in which he has worked, will he,... call upon any member of said Company for the purpose of soliciting and/or selling to any of the members of National Motor Club, any membership in another motor club or similar organization, nor will he in any way
We find this restrictive covenant unenforceable for the following reasons. While it might have been reasonable for the appellee to prohibit an employee from selling or soliciting memberships in other motor clubs in territories in which he had worked for a period of three years following termination, it was unreasonable to prohibit an employee from engaging in the motor club or automobile association business without restricting the employee as to the kind and character of activity in which he could not engage. Under this clause of the contract the employee is in effect prohibited from working in any capacity for a competitor, even in positions unrelated to solicitation and sales. See
Whitaker,
supra, at 814-815;
Dixie Bearings, Inc. v. Walker,
The noncompetition covenant and its provisions are made applicable to any new territory within or without the State of Georgia to which an employee might be assigned in the future. Under this court’s recent decision in Orkin Exterminating Co. v. Pelfrey, supra, at 285, provisions of an employment contract which allow the employer to assign the employee to new territory, with the restrictive covenants following him wherever he might be assigned, are too indefinite to be enforced.
For the foregoing reasons the noncompetition paragraph of the contract in question is unenforceable, even though the contract contained a severability clause.
1
Judgment reversed.
Notes
The severability clause provides: "This Agreement