Eleventh Circuit’s Limitation on Enforceability of Non-Recruitment Covenants

April 3, 2015

Restrictive covenants seek to restrict a former employee’s ability to compete (non-compete covenants), to solicit customers or patients (non-solicitation covenants), to solicit co-workers (non-recruitment covenants), or to use or disclose confidential information (non-disclosure covenants). A non-recruitment covenant requires employees to covenant that they will not solicit or hire away employees of the employer. This protects the employer’s investment in the development of its employees. In a recent case discussing the enforceability of a non-recruitment covenant under Georgia common law, the Eleventh Circuit affirmed the trial court’s finding that the non-recruitment covenant was unenforceable.

In Wetherington, M.D., v. AmeriPath, Inc., a former employee brought a wrongful termination suit against his former employer who counterclaimed, alleging that the former employee breached the non-recruitment clause and tortiously interfered with its employment relationship with a current employee. 566 F. App’x 850 (11th Cir. 2014). The non-recruitment covenant barred Plaintiff not only from soliciting current employees but also former employees of AmeriPath who had no confidential information and who resigned voluntarily a year ago. The covenant also included former employees with whom Plaintiff had no relationship during his employment with the company. The Eleventh Circuit found these last two provisions particularly troublesome and agreed with the district court that they were overly broad and reached beyond the “legitimate interest of the Company in protecting its investment in its employees.” Accordingly, the Court affirmed the district court’s finding that the non-recruitment covenant was unenforceable noting that Georgia law forbids blue-penciling.

The Court also agreed with the district court that Plaintiff did not tortiously interfere with AmeriPath’s relationship with its former employee, Dr. Stevens, who went to work for the same company as Plaintiff. The Court found that there was no evidence that Plaintiff either personally participated in or specifically directed anyone at his new employer to contract Dr. Stevens. In light of this lack of evidence the Court found that Plaintiff could not be held vicariously liable for his new employer’s recruitment of Dr. Stevens.

Practice Point: If you are an employer or employee who has questions about the enforceability of your non-compete, non-solicitation, non-recruitment or non-disclosure covenants please contact our firm immediately at 877-986-5529 or firm@pcwlawfirm.com.

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